Nigeria: BUA Cement signs US$600m expansion deal with Sinoma

BUA Group has signed US$600m worth of contracts with China's Sinoma International Engineering Co to double capacity at its Obu cement plant.  The plant currently produces 3.5Mta, but by the end of 2017 capacity will rise to 7Mta.

BUA's executive chairman, Abdulsamad Rabiu, said at the signing ceremony, “BUA has less than 10 per cent of market share now, after expansion we should go to about 20 per cent.”

The Nigerian cement market is currently controlled by Dangote Cement, which has a 70 per cent market share with 29.25Mta capacity in Nigeria, followed by Lafarge Africa with 8Mta. Lafarge Africa combined its South Africa operation with its publicly-traded Nigerian business last year to accelerate growth on the continent while last week. Meanwhile, Sinoma signed US$4.34bn worth of contracts with Dangote Cement to almost double its production capacity across Africa, including Nigeria.

BUA is not only looking to increase its market presence in its domestic market. The cement producer is also eyeing a continent-wide expansion, Mr Rabiu said. BUA acquired Edo cement plant with 0.4Mta capacity in 2008 and also has a majority holding in Cement Company of Northern Nigeria (CCNN) with 0.5Mta. Both Obu and Edo plants are located in southern Nigeria while CCNN is based in the north. Sinoma is also adding an extra 1.5Mta at CCNN, which should be completed early next year, the company said.