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BUA CEMENT PLC

(BUACEMENT)
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End-of-day quote Nigerian Stock Exchange  -  2022-08-16
54.60 NGN    0.00%
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How Govt's Policies Saw Bua Cement Produced 11m Tonnes in 7 Years

06/09/2022 | 10:06am EDT

The Minister of Information and Culture, Alhaji Lai Mohammed, penultimate week, said that BUA Cement has recorded a 300 per cent increase in production from 2015 to date.

Mr Mohammed said this during a tour of the BUA Cement plant in Sokoto State.

The minister, who attributed the growth in production to the conducive business environment created by the Muhammadu Buhari administration, said, "It is interesting to note that the conditions that have made BUA Cement to flourish, especially since 2015 when this administration assumed office, include the fact that BUA was granted pioneer status, the ban on importation of cement, government's divestment from the cement industry and of course backward integration policy.

"Thanks to these conditions, BUA Cement has recorded a 300 per cent increase in production between 2015 and now. That's from 3.5 million tonnes per annum in 2015 to 11 million tonnes per annum now. For its part, the Sokoto plant is operating at over 90 per cent of installed capacity."

The minister, who said the visit to the plant was in continuation of his tour of public and private sector projects impacting positively on Nigerians, praised the commitment of BUA Chairman, Alhaji Abdulsamad Rabiu, to growing the nation's economy and creating jobs.

According to him, "There is no better indication of BUA's support for the government's economic diversification and job creation agenda than the company's massive investments in Nigeria. In the last five years BUA has completed four new cement plants of similar capacity in different parts of the country and is set to complete two more plants soon. It is expected that total production of BUA Cement will amount to 17 million tonnes per annum by 2023."

He added that, "In 2020, the BUA Group consolidated its cement operations and listed BUA Cement Plc on the Nigerian Stock Exchange with a total combined installed capacity of eight million tonnes per annum and a market capitalisation of N2.5tn, making it the second largest cement producer in Nigeria, with 25 per cent of the market; the largest cement producer in the North West, South South and South East of the country and the largest private employer of labour in the North West. BUA Cement (Sokoto plant) is primarily engaged in the business of quarrying, extracting, processing and dealing in limestone, as well as the manufacture and supply of cement."

While lauding the management for upholding global standards in its operations, the minister said, "The three million tonnes per annum line (IV) of the BUA Cement facility that we have just visited takes the combined installed capacity of the factory's Lines 2,3 and 4 to 5 million tonnes per annum. This is one of the most modern cement plants anywhere. It has gas analysers used in regulating carbon emissions released into the atmosphere; air purifying mechanisms set up to enhance the quality of air released from the cement manufacturing process.

"In fact, the plant has filters capable of capturing 99.9 per cent of dust in order to make the environment healthy and conducive for workers and customers alike. The plant is the first cement plant in Nigeria to use Liquefied Natural Gas to generate 50MW of power, thereby replacing coal in its kiln. This has made the plant environmentally friendly to also curb climate change.

"I am sure when the AKK gas pipeline project is completed, it will drastically reduce the time and cost of transporting gas, which is currently being trucked from Port Harcourt to the plant. At least 20 trucks of LNG are brought here daily from Port Harcourt. Imagine the costs and the logistic challenges involved in this."

Dissecting the Sokoto cement plant

The Managing Director of BUA Cement Plc, Yusuf Binji, during a question and answer session, said the Sokoto plant was one of the most modern cement plants anywhere, with gas analysers used in regulating carbon emissions released into the atmosphere.

Binji said the plant had an air purifying mechanism set up to enhance the quality of air released from the cement manufacturing process and filters that were capable of capturing 99.9 per cent of dust in order to make the environment healthy and conducive for the workers and customers alike.

The plant is the first cement plant in Nigeria to use Liquefied Natural Gas (LNG) to generate power, thereby replacing coal in its kiln, and in the same vein, the plant generates 50MW of electricity to power its production machinery.

This, Binji said, had made the plant environmentally friendly to also curb climate change, noting that, "I am sure when the AKK gas pipeline project is completed, it will drastically reduce the time and cost of transporting gas, which is currently being trucked from Port Harcourt to the plant.

"At least 20 trucks of LNG are brought here daily from Port Harcourt. Imagine the costs and the logistic challenges involved in this. The beauty of it all is that the Sokoto plant is operating at over 90 per cent of its installed capacity and loading between 250 and 270 trucks per day. The plant has a total of 700 trucks for cement distribution."

BUA Cement, as is listed on the Nigerian Stock Exchange (NSE), with a market capitalisation of N2.5tn, is the fourth largest company on the NSE; the second largest cement producer in Nigeria with 25 per cent of the market and the largest cement producer in the country's North West, South South and South East.

BUA's commitment to CSR

Binji said BUA Cement had also invested heavily in Corporate Social Responsibility (CSR), and that the company was involved in the provision of health services, scholarships, provision of housing, roads and electricity for its host communities.

He said, "As a responsible organisation, we are fully aware of the responsibilities and obligations attached with becoming market leaders in the construction sector. We have been harnessing local resources, investing in human capital development, setting up efficient industries and giving back to communities through various social impact/intervention programmes.

"We foresee a great Africa driven by determination and disruptive innovation in delivering quality products and services, hence our investments in strategic ultra-modern eco-friendly cement plants to lay the foundation for growth and a supply network to reach our customers with ease. While constructing our ultra-modern cement producing facilities, we have taken the following proactive measures against CO2 emissions, noise and dust pollution. Our facilities come with carbon emission gas analszers monitored by our operators. Dust collectors installed around the cement facilities purify the air quality. Our product, Portland Limestone Cement, is also environmentally friendly. Less fossil fuel is expended in the production of Portland Limestone Cement than the conventional Portland Cement."

Copyright Daily Trust. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English

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Financials
Sales 2022 334 B 794 M 794 M
Net income 2022 108 B 256 M 256 M
Net cash 2022 736 M 1,75 M 1,75 M
P/E ratio 2022 17,2x
Yield 2022 4,21%
Capitalization 1 849 B 4 403 M 4 403 M
EV / Sales 2022 5,54x
EV / Sales 2023 4,93x
Nbr of Employees 1 091
Free-Float 58,0%
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Mean consensus SELL
Number of Analysts 3
Last Close Price 54,60 NGN
Average target price 43,91 NGN
Spread / Average Target -19,6%
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Managers and Directors
Yusuf Haliru Binji Chief Executive Officer, MD & Director
Jacques Piekarski Chief Financial Officer & Executive Director
Chikezie Ajaero Finance Director
Abdul-Samad Isyaku Rabiu Chairman
Khairat AbdulRazaq-Gwadabe Independent Non-Executive Director
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