Binji: BUA Cement Investing in State-of-art Technology to Mitigate Raising OPEX

Kayode Tokede

The MD/CEO, BUA Cement Plc, Mr. Yusuf Binji, yesterday said the company investing in State-of-art technologies to lessen raising operating expenses, stressing that cement production is cost intensive.

Binji,  who was speaking virtually at a conference call for analysts and investors on the company’s half-year (H1) ended June 2023 performance, disclosed that the cost of sales per ton rose by 19.7 percent to N34,936/ton from N29,192/ton, as at H1 2022, attributing it to increases in raw materials costs, energy product costs, depreciation charges, and repair & maintenance costs.

According to him, “Energy cost per ton increased by 11.6per cent to N14,561/ton from N13,048/ton during the corresponding quarter ended H1’2022, which resulted from a combination of energy price increases and fuel mix during the quarter.

“Selling, Distribution & Administration cost (net) per ton increased by 46.2per cent to N5,830/ton from N3,988/ton for the six months ended 2022. The drivers of the increase were distribution costs, led by increased fleet size, depreciation charges, other administrative expenses.”

 He explained that BUA Cement has invested in lower-pressure peroxide plants to reduce power consumption and design all its plants with state-of-the-art technology for efficient and environmentally friendly performance.

He added that, “In our Sokoto plant, we have increased the usage of natural gas which gives us a bit lower cost per plant compared to when we were using the traditional heavy fuel oil. We hope all these will mitigate rising production costs.”

Binji said the business performance of BUA Cement in H1 2023 was sustained by strong brand attributes, stable volumes, and price adjustments.

BUA Cement had reported net revenue up 17.2per cent to N221.1 billion in H1 2023 from N188.6 billion, as at H1 2022, while EBITDA increases by 14.1per cent to N99.8 billion in H1 2023 from N87.5 billion reported in H1 2022.

From the profit && loss figures, BUA Cement announced Profit After Tax (PAT), up by 3.7per cent to N63.6billion from N61.4 billion, as at H1 2022.

He expressed that “On expansion drive at Sokoto and Edo states, we continue to attend the setup milestones and looking forward to the commercial operation of both plants during the first quarter of 2024.”

He said the company is making moves to invest in Compressed Natural Gas (CNG) powered trucks to mitigate the effect of transporting cement products across the country.

He also disclosed that Nigeria’s land border closure between Niger Republic and Burkina Faso is affecting the export of cement to both countries amid political unrest.

“We carry out export of cement from our Sokoto plant which is about 100 kilometres to Niger Republic.

“At the moment, all our exports are by trucks through the land border. We hope the political situation will be resolved quickly so that we can resume our export to both countries,” he said.

On sustaining profitable growth in 2023, he highlighted that BUA Cement aimed at driving continued revenue and cost synergies across revenue and margin lines; harmonization of sales and marketing strategy across the two plants and construction of lines 3 & 5 at Obu and Sokoto plants, respectively.

On sustainability strategic priorities, he said BUA Cement is transiting from Heavy Fuel Oil (HFO) to Liquefied Natural Gas (LNG) in Sokoto, commencing work on the 70MW gas power plant at Obu and 70MW gas power plant at Sokoto.