There are no defensive postures here. Regardless of the possibility of collapsing demand for commodities such as sugar and cement, induced by a pandemic, Nigerian billionaire Abdul Samad Rabiu sees an option, especially in agriculture, especially in Nigeria.
Not only is agribusiness undeniable in terms of business models, but there is an urgent desire to save compulsory currencies and bring employment to life,” he says.
Rabiu’s main one is to advertise more production and processing to meet domestic demand and make more profit for its BUA Group conglomerate.
BUA registered its subsidiary BUA Cement in January to raise capital for commercial projects in the glass, metal and oil sectors, increasing the rigour and “control” of the procedure to “reduce” Nigerian opportunities for domestic and foreign investors.
“Opportunities are there,” says the group’s president and CEO excitedly at our video convention in May, a portrait of former South African President Nelson Mandela smiling over his shoulder [note; this interview took place before the announcement of BUA’s refining agreement in September]
This was not the case for the boy from Lagos Danfo, to name a phrase: the city’s buses were limited by measures contrary to the transmission of COVID-19.
Most Nigerians are still recovering from the economic effect of the pandemic: traders have ceased operations, farmers have disposed of their products due to lack of transport, and companies have suspended investment projects.
READ ALSO Nigeria: Poverty Pandemic in the Post-COVID Future
Most of BUA Group’s program remains intact. CHIEF Rabiu unveiled plans for 3 million tons consistent with the year (mtpa) of cement capacity and 50 MW of electricity in Adamawa state in July.
However, it postponed the announcement of a glass production commission scheduled for the France-Africa summit postponed in June. While COVID-19 has upset maximum companies, greater automation in BUA Group’s agribusiness and cement plants allows them to operate at approximately 40-50% of their overall capacity. “We are lucky that we are at 50%. Many others couldn’t paint at all,” Rabiu says.
BUA Cement achieved a first quarter forged in 2020, with a profit of approximately $60 million.
The ban on travel between Nigerian states was the biggest challenge, “and is emerging now. “He argues that “the effect on [the coronavirus] is going to be with us for some time” and that “industry-wide business models are going to have to change. “
Learning from the operation of his family business circle when he was young, Rabiu built his empire slowly but safely. The BUA Group has gone from a commercial commodity loading company to a production plant for agri-food and construction materials. sugar and cement projects, the organization also operates a marine oil terminal in the city of Port Harcourt and has a portfolio of genuine real estate.
Cement remains the commercial star.
BUA Cement achieved a first quarter forged in 2020, with a profit of nearly $60 million, meaning, according to Rabiu, that it can slow down from April to June and have year-end effects that may simply be “better than those of 2019”.
This is something that many other Nigerian corporations predict. It is positive given the year the corporation had in 2019; a 47. 5% increase in sales, with a profit of almost 70%.
He attributes the jump to the launch of a moment line at the Obu plant in March 2019, adding 3 mtpa to BUA production, and the first full year of operation of the Kalambaina plant’s moment line. Cement expansion stops; while BUA Cement has lately a capacity of 8 mtpa, Rabiu points to 14 mtpa in the coming years.
Analysts make a percentage of Rabiu’s optimism about the sector in the short term. “We hope that deteriorating macroeconomic situations – caused by the COVID-19 outbreak, which caused a sharp drop in oil costs – will hamper the activities of the structured sector, as fiscal spending on investment projects weakens,” CSL Stockbrokers of Nigeria wrote.
The scars will remain for some time for the Nigerian economy as a whole, Rabiu says, the damage will strike the poorest first. “The value of goods has increased, especially for food products,” he says, partly due to the naira devaluation but also because the virus has affected port logistics, making it difficult for imports to be transparency.
We own 60% of the world’s arable land. We have the other people [to grow up]”.
This can be seen as an opportunity to accentuate Nigeria’s wonderful drive for food production, which President Muhammadu Buhari’s government has edited for rice in particular.
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As a component of Nigeria’s COVID-19 Coalition, an organization of personal sector operators that join the budget for relief efforts, BUA invested cash in food systems in Lagos and other cities to cushion the pandemic.
Basically, Rabiu is not satisfied with the highest point of food imports. “This is not happening at all, not only here in Nigeria, but sometimes in Africa. We own 60% of the world’s arable land. We have the other people [to grow]. We have the weather. We have everything we need. “
READ ALSO A greener Africa: ‘It is outrageous that Africa has the prevalence of hunger in the world’
He looks forward to seizing this opportunity to move beyond food crops for monetary crops and support price maintenance in Africa. “The United States, Germany, Switzerland and Belgium produce 75% of the world’s total chocolate production. And if we take a look at the cocoa industry around the world, what are we talking about, from $150 billion to $160 billion?And africa gets maybe $10 billion to $15 billion?»
He hopes that agriculture will provide the resilience Nigeria desires in the post-COVID-19 era. Next year, for example, you will see the increase or opening of operations on 3 primary sugar plantations, adding BUA in Kwara state, as well as projects. for Dangote Sugar and Golden Sugar.
BUA is Nigeria’s largest sugar producer after Dangote Sugar. “With this plantation, we will produce 150,000 tons of white sugar with millions of litres of ethanol, employing more than 10,000 people in direct work,” Rabiu says.
He cheered on a scale in the Kakira sugar box in Uganda, through the Madhvani family: “It’s the most impressive sugarcane plantation I’ve ever seen. “And Mayur Madhvani told Rabiu that while he can get yields of nine tons consistent with one hectare in Uganda, the soil and outlook in Nigeria were much higher.
This enthusiasm is shared across the Nigerian government, whose trade policy includes the “upstream integration program” that seeks part of the $ 640 million that Nigeria spends each year to import sugar from Brazil by promoting local production.
This import substitution resolution took a position with Buhari on the Nigeria-Benin border in August 2019 in an offer for local rice producers. Rabiu applauded this policy. And you need to see this war to keep the price in Nigeria in other industries as well.
READ MORE Nigerian flour generators close border with Benin
Rabiu launches the iron ore price chain to the finished metal in the blink of an eye. Nigeria has intact iron ore deposits in Kogi state and is awaiting a government concession on fuel costs before the construction of a 350 km pipeline between Delta state and Kogi. A power plant. ” You want 250 MW of force, which you can’t get from the government or the network,” Rabiu says. He added that the government is operating with approvals, as it has already granted mining licenses.
The glass is also in your sights. “The state of Ogun sits on limestone silica. All you want is silica and the power to make glass,” says Rabiu, who is partnering with a giant French glass manufacturer.
There is no market here in Africa like Nigeria “
The industrialist is also looking to expand into the power box. “We looked at everything. We don’t know if it’s upstream or downstream. Or, in fact, halfway.
All those projects will require capital. This is one of the main reasons for BUA Cement’s directory on the Lagos Stock Exchange in January. With a market capitalization of $3. 3 billion, it is now the third largest publicly traded company.
But, Rabiu says, this wasn’t the only explanation for why the directory in the inventory exchange. “Corporate governance is very important,” he says, recalling the efforts of Asian corporations in the 1990s to attract global investors by improving their transparency. While the short-termism of some fair investors may have its drawbacks, Rabiu argues that his participation allows him to “create a company that will stand the passage of time. “
Next step: the invitation of independent administrators to the board – “from Europe, Asia, America, anywhere. And, it’s still early, we’re talking to see if we can index ourselves on the London Stock Exchange,” Rabiu says.
A clear difference between him and Nigeria’s other big investors is that he believes Nigeria is where he is. “I know many other people say, ‘I would like to move on to other African countries. ‘[. . . ] But there is no market here in Africa like Nigeria. That’s where the other people are, that’s where the market is. “
Possibly, or possibly not, he would sympathize with Nigerian bosses whose hands have been burned by failed expansions abroad.
Things haven’t been easy for BUA, despite a solid first quarter for its cement business.
A fight with Nigeria’s port authority, which last year closed the BUA Group terminal in Port Harcourt, was settled out of court in June. The company is also competing with the Dangote Group, in the courts and in the media, for whom it owns the mining sites. in the state of Edo.
Nigeria’s war for trade supremacy will be dust-free.
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