Friday, 11 September 2015

DANGOTE’S BIGGEST ENEMY, BUA GROUP, SEALS $600M DEAL WITH A CHINESE CEMENT FIRM

Alhaji Abdulsamad Rabiu, Executive Chairman, BUA Group
Report reaching Tectono Business Review has it that Dangote Group’s biggest enemy and competitor, BUA Group, has signed a $600 million contract with China’s cement manufacturing supplier, Sinoma CBMI, to commence the construction of a second production line.

A statement which was made available to Tectono Business Review quoted BUA Group as saying that the pact came following the successful start of production at its new Obu Cement Plant, adding that it is set to further double the capacity of the plant to seven million metric tonnes per year. It is obvious that this agreement, which was signed at the Sinoma CBMI offices in China, will further bolster BUA Group’s share of the cement market in Nigeria.

In case you do not know, BUA Group is one of Nigeria’s largest Foods and Infrastructure conglomerates with significant investments in various sectors of the economy including Cement, Sugar, Steel, Flour & Pasta, Edible Oils, Housing, and Port Operations. It’s cement arm, BUA Cement, currently operates factories in Obu and Okpella, Edo State Nigeria and also in Sokoto through its majority shareholding in CCNN. BUA Group does virtually all business that Dangote Group does.

In his speech at the agreement signing ceremony, the Executive Chairman of BUA Group, Alhaji Abdulsamad Rabiu, said that the new line was part of the group’s organic growth strategy for its cement arm, BUA Cement.

In his own words: “Given their proven track record and vast expertise in deploying cement plants across the world, we are confident in SINOMA’s ability to deliver a world-class second line for our Obu Cement Plant as well as meet our stringent environmental, safety, quality and technical requirements for our plants and products. This additional capacity forms part of our strategic growth programme for our Cement arm, BUA Cement. In the long term, we expect to commit significant investments in cement production across the continent whilst also ensuring that the quality of our products remain a key differentiating factor in the marketplace.”

In his response, Tong Laigou, who is the Board Chairman of Sinoma CBMI, said:  “We are happy to sign this contract and extend our ongoing partnership with BUA Cement. This signing follows an earlier project to install an additional 1.5mtpa capacity to Sokoto Cement, also subsidiary of BUA Cement, which is expected to be completed soon and commissioned in 2016. We intend to bring our wealth of experience and expertise to bear in bringing this project to fruition.”

It is really interesting to know that Sinoma CBMI has completed many key projects for cement production in China and across the world, including almost all foreign-funded projects in China, with total number of cement production lines exceeding 150.