BUA Cement Plc (NSE: BUACEMENT) has signed an agreement with China’s Sinoma CBMI to build three new production lines of 3 million metric tonnes per annum each. This was contained in a notification the cement manufacturer published on the Nigerian Stock Exchange.
According to the notification seen by Investogist, the agreement was signed this week, and the new production lines will be located at Adamawa, Edo and Sokoto States.
It was also responsible for the installation of an additional 1.5 metric tonnes capacity production line at Sokoto Cement, also a subsidiary of BUA Cement.
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Over the last decade BUA Cement has embarked on a series of expansion projects to boost its cement production capacity at many of its subsidiaries;
- Kalambaina Cement limited with a current installed capacity of 1.5 million MT, saw the commencement of the development of a 1.5m MT plant in 2015, and it was commissioned and began production in 2018.
- Obu & Edo Cement Company limited with a current installed capacity of 3.5 million MT, saw the completion and commencement of production of a 3 million MT capacity Greenfield Obu Cement plant in 2015. A US $600m contract was signed with SINOMA China to add a new line of 3 million MT IN 2016 and commenced production in 2018.
The Nigerian cement industry has three major players dominating the market, with Dangote Cement Plc being the leader wielding 60.6% of the market share with a local installed capacity of 29.3 million MT, Lafarge Africa Plc having 21.8% share with a production capacity of 10.5million MT, and BUA Group accounts for 17.6% share and 8.5mtpa.
With the production lines adding a combined capacity of 9 million MT, BUA Cement will be poised to take on Dangote Cement Plc for market dominance in Nigeria. All three production lines will bring the combined capacity of BUA Cement Plc to 17.5mtpa, placing it ahead of Lafarge Africa Plc, and more than half way to Dangote Cement’s combined local production capacity.
BUA Cement Plc is a company domiciled in Nigeria. The Company was incorporated in Nigeria as a limited liability company on 30 May 2014 and commenced business in August 2015.
The Company was converted from a private limited liability company to a public limited liability company on 16 May 2019, as a prelude to a scheme of merger. The Company later merged with the defunct Cement Company of Northern Nigeria Plc in a scheme of merger on 23 December 2019 and was listed on the Nigerian Stock Exchange on 9 January 2020. BUA Cement is ultimately owned by Alhaji Abdulsamad Rabiu, CON.
A lot of things are happening at BUA Cement, we believe it will be worthwhile from a long term perspective to acquire the shares of BUACEMENT.
By; Nnamdi M.
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