BUA Cement fuel and energy consumption increase in HY 2022

According to BUA Cement Plc, the group's fuel and energy consumption rose from N26,466 billion in HY 2021 to N43.580 billion in HY 2022, a 64.66 percent rise.

In comparison to the overall net sales of N66.157 billion recorded in 2021, this amounts to 45 percent of the entire net sales in the first half of 2022, which was N97.503 billion.

Prices of raw materials increased by 48.23% from N18.896 billion in 2021 to N28.009 billion.

Volume growth and rising inflation were the causes of the increase.

Due to higher production rates and rising oil prices, energy costs had a major role in Nigeria's manufacturing cost growth.

BUA, like its competitors, saw a sharp rise in the price of raw materials and energy. Some of these rising prices were brought on by the Naira's devaluation, while others were brought on by macroeconomic price inflation, particularly in the domestic market which saw increased inflationary pressures.

Although the importation of raw materials and the associated foreign exchange constraint has continued to be a hindrance, it is not the only issue contributing to the challenges manufacturers face.

The inadequate infrastructure, particularly a reliable electrical supply, the high price of energy products, a bad road system, many taxes, strong competition, and heavy import levies and tariffs are some of the additional issues facing the sector.

Despite the power industry being privatized for many years, manufacturers have yet to notice any discernible increase in the supply of electricity, requiring them to rely significantly on internal power supplies at a significant expense. However, electricity is the only essential infrastructure needed to grow the manufacturing industry and add jobs.

For period ended June 2022, the BUA reported a profit after tax of N61. 363 billion, up from N43.395 billion in 2021, representing a rise of 41. 41%.

Profit before tax increased from N49.700 billion in 2021 to N74.891 billion in 2022, a 50.68 percent increase.

Revenue increased by 51.73 percent to N188.561 billion in H1 2022 from N124.277 billion.

According to BUA Cement Plc, it is considering capital raise to expand the integrated cement factory owned by BUA Cement in Kalambaina, Sokoto State, Nigeria, from 2.0 million tons per year (MTPA) to 8.0 MTPA.

In a statement obtained from Nigerian Exchange Limited (NGX), the group said as part of its disclosure requirements under Chapter 17 of the Rulebook, BUA Cement Plc serves to inform the Nigerian Exchange Limited (NGX), its Shareholders, and the investing public that the Company has entered into discussions with the International Finance Corporation (IFC), acting as "lead arranger in conjunction with a number of other lenders in a syndication pool, to obtain a loan."

The letter issued by Hauwa Garba Satomi, Deputy Company Secretary, states that the expansion will involve raising the company's capacity from 2.0 million tons per year (MTPA) to 8.0 MTPA as well as the creation of various auxiliary utilities.