How BUA plans to cut Nige­ria’s im­por­ta­tion of sugar, steel

Business Day (Nigeria) - - REAL SECTOR WATCH - Sto­ries by ODINAKA ANUDU

BUA Group is ready to bol­ster lo­cal pro­duc­tion of sugar and steel to en­sure that Africa’s most pop­u­lous coun­try re­duces its de­pen­dence on im­ports.

Of­fi­cial data show that Nige­ria im­ports steel val­ued at $3.3 bil­lion ev­ery year. On the other hand, the coun­try spent $459.4 mil­lion in 2017 on sugar im­ports and $516.16 mil­lion the pre­vi­ous year, ac­cord­ing to the Na­tional Sugar De­vel­op­ment Coun­cil (NSDC). The coun­try im­ports mainly/ white sugar and re­fines it lo­cally.

Ab­dul Sa­mad Rabiu, chair­man of BUA Group, plans to re­duce the coun­try’s de­pen­dence on sugar and steel through his in­te­grated in­vest­ments in these sec­tors.

“Sugar is some­thing that we should be pro­duc­ing lo­cally,” he told a se­lect group of jour­nal­ists in La­gos.

“What­ever it is that we can pro­duce in Nige­ria, let us do it, be­cause that is the only way we can grow.”

Rabiu ex­pects that he will be able to pro­duce white sugar lo­cally by 2020.

BUA ac­quired about 15,000 hectares for sugar plan­ta­tions in Lafi­agi. It ac­quired Lafi­agi Sugar Com­pany, which had been a joint ven­ture be­tween Me­hta Group of In­dia and the Fed­eral Gov­ern­ment of Nige­ria, in 2008.

On steel, Rabiu be­lieves Nige­ria should not be im­port­ing steel worth over $3 bil­lion at this point.

He said the coun­try uses mainly scraps and bil­lets in pro­duc­ing steel even when it should be able to utilise lo­cally avail­able ores to pro­duce high-grade prod­ucts.

BUA is like­wise a big player in the ce­ment in­dus­try. It re­cently com­mis­sioned a $350m plant with 1.5mil­lion met­ric tonnes per an­num (mtpa) Kalam­baina Ce­ment Plant in Sokoto State. It also an­nounced com­ple­tion of its new­est Obu plant in Edo State, which has a ca­pac­ity to churn out three mil­lion mtpa of ce­ment an­nu­ally.

This brings the to­tal ca­pac­ity of BUA Obu ce­ment op­er­a­tions to six mil­lion tonnes and moves the en­tire group’s in­stalled ca­pac­ity to eight mil­lion mtpa.

The ul­tra­mod­ern plant in Sokoto is blessed with huge lime­stone de­posits and is prox­i­mate to Niger Repub­lic, which en­hances its ex­port po­ten­tial.

Rabiu said that 30 per­cent of what BUA pro­duces in Sokoto is ex­ported to Niger Repub­lic, which brings in for­eign ex­change into the econ­omy and cre­ates jobs.

The ce­ment plant in Sokoto has a 32 megawatts multi- fuel cap­tive power plant and a coal mill and will be gen­er­at­ing more power than is cur­rently gen­er­ated by the en­tire Sokoto State.

Rabiu had said dur­ing the com­mis­sion­ing of the Sokoto plant that it would run on coal, heavy oils or a mix­ture of both. The use of coal is ex­pected to save over 70 per­cent of en­ergy costs, com­pared with 15 mil­lion litres of fuel oil per month or 40 tonnes or even 20 trucks of fuel that could have been used per day.

He had also said that about 2,000 di­rect and 10,000 in­di­rect jobs were re­quired to get the plant run­ning.

“Imag­ine hav­ing to im­port ce­ment through the ports with all the chal­lenges,” he said while ad­dress­ing jour­nal­ists last week in La­gos.

“You have to trans­port it to Sokoto or Jos. Due to the pro­duc­tion of ce­ment in Nige­ria, the price of ce­ment to­day in Sokoto is the same as that of La­gos be­cause we have the raw ma­te­ri­als lo­cally,” he said.

He called on in­ter­na­tional fund­ing in­sti­tu­tions such as African De­vel­op­ment Bank (AFDB) to sup­port Nige­rian en­trepreneurs and in­dus­tries to en­able them fuel Africa’s in­dus­tri­al­i­sa­tion.

“They have a lot of money. They need to sup­port us be­cause Nige­ria still im­ports things like steel, which it should be pro­duc­ing lo­cally,” he said, adding that the ma­jor chal­lenge is lack of funds to set up com­pa­nies that would do­mes­ti­cate pro­duc­tion of im­ported prod­ucts.

BUA Obu Ce­ment II

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