BY EMEKA EJERE
Leading food, cement and infrastructure conglomerate, BUA Group, recently announced the acquisition of majority stake in P.W. Nigeria Limited – one of the largest construction, engineering and mining companies in Nigeria. According to a statement from BUA, the acquisition was done to further deepen its investments in the infrastructure business in Sub-Saharan Africa.
With the acquisition of P.W. Nigeria, the BUA Group will extend its investments, leadership and capacity in the infrastructure space and projects which are expected to benefit from tight integration of BUA’s cement business and P.W Nigeria’s construction business.
P.W. Nigeria Limited was founded in 1948 in Ireland but began operations in Nigeria in 1974. The construction firm has an extensive modern fleet of construction equipment and a team of highly trained and professional staff. It is one of the leading construction contractors of roads, bridges, airports, urban infrastructure, dams and water treatment facilities in the country. It has worked with an array of clients which include World Bank, the federal government, state governments, local governments, multinationals and among others.
BUA Group, on the other hand, was established in 1988 by founder and industrialist, Abdul Samad Rabiu as a private limited liability company with interests in marketing of iron & steel, agricultural and industrial chemical. It has grown over the years to entrench its place as a leading player in the foods, mining, manufacturing and infrastructure space in Africa with major investments in cement, mining, real estate, steel, port operations, sugar and agribusiness.
Speaking on the acquisition, the founder/executive chairman of the Group, Abdul Samad Rabiu, said, “This acquisition marks the beginning of the next phase of our medium-term strategy for our infrastructure business following the completion of the consolidation of our cement arm, BUA Cement, in January 2020.
“BUA’s acquisition of majority holdings in PW Nigeria Limited provides a prime opportunity to increase our investments in the entire value chain of the cement, mining and construction industry where we already have BUA Cement Plc, the second-largest cement company in Nigeria, as well as investments in other areas including mining, quarrying, construction, power and logistics amongst others.”
According to Rabiu, P.W. Nigeria Ltd provided a strong value proposition too difficult to ignore with its solid experience in building dams, roads, airports, water projects and other infrastructure projects in Nigeria. He further disclosed that as Nigeria and most of West Africa looks to improve infrastructural development in coming years, it became quite necessary for BUA to position itself strategically to support critical investments and government effort and unlock untapped opportunities in the infrastructure development sector.
In October 2019, the BUA Group announced a merger of its two cement subsidiaries, the Cement Company of Northern Nigeria and the Obu Cement Company, in a bid to become the country’s second-largest cement producer by volume by 2020. The deal was concluded in January as CCNN was delisted and BUA Cement listed on the Nigerian Stock Exchange with a market capitalisation of N1.2 trillion ($3.3bn).
Less than a week after the Security and Exchange Commission (SEC) approved the merger, BUA Group signed a contract with Chinese CBMI Construction Company, a subsidiary of Sinoma International Engineering Co. Ltd, for the construction of a new three million metric tonnes per annum (mtpa) Kalambaina Cement Line II in Sokoto State. The construction of the new cement plant is the line in with BUA Cement’s strategic midterm expansion programme.
“The Nigerian market is still greatly underserved, and with the projected growth in major infrastructure projects and spending over the next few years, it is important that local manufacturers can scale effectively to meet current and projected demand,” said Rabiu.
According to the Group, one of the major reasons behind the decision to merge the cement companies in the conglomerate was to create value for shareholders and other stakeholders. With the audited results of BUA Cement for the year ended December 31, 2019, there is no gainsaying the visionary leadership and management acumen of Rabiu have been brought to bear.
Despite the challenging environment that made many companies post dismal performances, BUA Cement ended the year with N61 billion profit from which the shareholders are going to smile home with a dividend of N1.75 per share.
Details of the financial performance showed that BUA Cement recorded revenue of N175.518 billion in 2019, up from N119.013 billion in 2018. Cost of sales jumped from N59.060 billion to N93.075 billion in 2019. Gross profit stood at N82.443 billion in 2019, compared with N59.952 billion in 2018. The management strived to contain administrative.