One of Nigeria’s fledging and fastest growing indigenous conglomerates, BUA Group, has revealed plans to inject US$50m into Sokoto Cement Company (also known as Cement Company of Northern Nigeria, CCNN) as part of its expansion and upgrade of the factory to boost its output, the company said yesterday.
BUA had last year acquired the majority stake in Sokoto and Okpella Cement Companies in a deal worth over N15bn. The board of directors of Sokoto Cement Plc, at a recent board meeting where Abdulsamad Rabiu emerged chairman of the company by virtue of being the majority share holder, approved the proposal by CCNN for BUA to inject US$50m through a bridge finance facility into it within the next two months.
The facility will help upgrade the production capacity of CCNN to 700,000t. It is a bridge financing by BUA Group for the investments required under the CCNN 70,000t programme, that is the acquisition of plants and machineries for the expansion of the installed capacity of CCNN up to 700,000tpa.
Also, a conversion programme to coke and related projects is in the works in order to reposition CCNN to be more competitive, according to the company. A major component of the company’s production cost is power generation.
Rabiu lamented that “the company spends huge sums of money in the consumption of low pour fuel oil (LPFO) which is transported by road all the way to Sokoto”.
The BUA Group was one of the six companies granted a licence by Nigeria’s federal government in 2008 to import cement. The group now owns and successfully operates Nigeria’s first floating cement terminal, the BUA Cement I.