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BUA blames energy and transport costs for high cement prices

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BUA Cement Plc has attributed the high cost of cement in Nigeria to rising energy, transportation, and foreign exchange-related expenses, saying the industry continues to face significant production cost pressures despite recent improvements in exchange rate stability.

Speaking at the company’s 10th Annual General Meeting held in Abuja on Thursday, the Chairman of BUA Cement, Abdul Samad Rabiu, said recent economic reforms, particularly in the foreign exchange market, were beginning to improve manufacturers’ planning.

The Chairman of BUA Cement Plc, Abdul Samad Rabiu
The Chairman of BUA Cement Plc, Abdul Samad Rabiu

The cement industry, he stated, remains heavily dependent on imported spare parts, equipment, and energy-related inputs, making it highly vulnerable to exchange rate fluctuations.

Mr Rabiu noted that although the naira depreciation created serious challenges for manufacturers, recent stability in the foreign exchange market had started easing some pressures, especially in shipping and logistics costs.

“The good news is that things are getting better because of the stability. You see, prices, especially shipping costs, are coming down,” he said.

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He added that the reforms, though difficult initially, had created a more transparent market where manufacturers now have better access to foreign exchange.

“Today, whatever rate I get, it’s the same rate anybody gets,” he stated, noting that businesses could now plan several months due to improving exchange rate predictability.

Mr Rabiu said BUA remained focused on reducing operational costs through investments in energy infrastructure, local production, and logistics efficiency.

He highlighted that the company’s long-term strategy remained aligned with Nigeria’s industrialisation drive through expansion, operational efficiency, and increased local production. He also stated that its revenue rose to N1.2 trillion in 2025 from N876.5 billion in 2024, while profit before tax increased to N465.3 billion from N99.6 billion.

Profit after tax also rose significantly to N356 billion from N73.9 billion of the previous year.

The shareholders also approved a final dividend of N10 per ordinary share for the 2025 financial year, bringing the total dividend payout to N338.64 billion.

Input Cost

Speaking further about BUA’s pricing structure during a press conference after the meeting, Yusuf Binji, the Managing Director and Chief Executive Officer, said energy alone accounted for about 60 per cent of cement production costs.

Yusuf Binji, the Managing Director and Chief Executive Officer of BUA Cement PLC
Yusuf Binji, the Managing Director and Chief Executive Officer of BUA Cement PLC

“As you know, the price of cement, rightly or wrongly, is a consequence of input costs,” he said, and added that natural gas costs at one of the company’s plants in Edo State rose sharply following the naira devaluation.

“We were paying close to N4 billion for natural gas every month. At one point, it reached N16 billion a month. It became very difficult to absorb all these costs,” he said.

Mr Binji also linked rising diesel prices to recent tensions in the Middle East, and said the increase significantly affected transportation and distribution costs.

He further said diesel supplied to the company’s factories rose from about N930 per litre in March to nearly N1,850 per litre within two months.

“If you consider that we have to deliver cement to our customers using our own trucks that use diesel, even the price we are talking about, half of that price of a bag of cement is actually because of transportation.”

He also dismissed claims that cement was selling for between N13,000 and N15,000 per bag nationwide, insisting that prices in several regions remained lower.

“I have the prices from the northern region, and yesterday it was N11,100 a bag. So it is nowhere near the N13,000 or N15,000 a bag that was quoted,” he said.

Mr Binji, however, assured consumers that the company would continue reviewing prices in line with prevailing economic realities and changes in input costs.

“As we have favourable economic conditions in Nigeria, especially costs that are related to our input costs, we will adjust accordingly. Whichever way it swings, we will try to make sure that we give prices that are fair and decent to Nigerians.”

Despite current economic challenges, the company, he said, was continuing expansion projects to increase production capacity.

Mr Binji disclosed that BUA Cement’s new production line in Ososo, Edo State, was nearing completion, while another production line had been planned for Sokoto State.

He said the projects were expected to add about six million tonnes to the company’s annual production capacity, increasing total installed capacity to about 23 million tonnes per annum by 2027.

He noted that the company had invested heavily in bulk cement distribution by acquiring 500 specialised trucks to support major infrastructure projects across Nigeria.

READ ALSO: How I was denied entry into South Africa – BUA Chair

“We are even thinking of buying another 500 more,” he said, citing rising demand linked to ongoing highway and infrastructure projects, such as the Lagos-Calabar Coastal Highway.

The company added that it had temporarily reduced exports to prioritise local supply amid growing domestic demand.

Despite insecurity and broader economic pressures, Mr Binji said the company would continue expanding its operations nationwide.

“Our major aim is to be able to deliver cement everywhere in Nigeria at affordable prices, and that is what we will continue to do,” he said.


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Business

Gambia asks GTB, Access Bank, others to dismiss non-Gambian employees

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The Central Bank of The Gambia ordered all commercial banks operating in the country to dismiss non-Gambian employees.

In a letter dated 19 September, the central bank asked commercial banks to phase out non-citizens who are not on approved expatriate quotas by the end of the year.

The letter, signed by the bank’s Second Deputy Governor, Ousman Mendy, was addressed to managing directors of all banks operating in the country, including Nigerian subsidiaries such as First Bank, Zenith, Access, Eco, and the Guaranty Trust Bank.

The regulator also directed that the non-citizens dismissed should be replaced with qualified Gambians.

It directed banks to put clear succession plans in place quickly and transfer skills. It also asked banks to keep operations running smoothly during the transition.

According to the letter, the decision followed a meeting between the central bank and bank managing directors in August, during which they discussed concerns about the employment of non-Gambian workers in the banking sector.

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The CBG said a recent industry study it conducted found that banks employ a large number of foreigners.

It added that, in addition to recruiting expatriate workers, some banks allegedly violated provisions of The Gambia’s Labour Act 2023 and Guideline 9 on expatriate staff.

ALSO READ: Access Bank’s Euromoney wins signal new era of regional banking leadership

These provisions identify the circumstances under which expatriate workers can be employed and the quotas permissible.

“A recent industry study conducted by the Bank revealed that a relatively high number of non-Gambians are employed by banks, in addition to recognised expatriate staff.

“This is in violation of the provisions of the Labour Act 2023 and also not in line with guideline 9 on expatriate staff,” the letter read.

The regulator further urged banks to adhere to the country’s laws and strictly follow the central bank’s guidelines.

“You are hereby directed to ensure full compliance with the law and strict compliance with CBG’s guidelines,” it stated.


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African Alliance Secures Shareholders Nod to Raise N12bn, Eyes Return to Active Trading

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BY NKECHI NAECHE-ESEZOBOR—The board  of directors of African Alliance PLC on Wednesday got shareholders nod to raise N12 billion additional capital to shore up its baseline and meet National Insurance Commission, (NAICOM), Minimum capital requirement.

According to the details made available by the company under the approved resolutions, the Board is empowered to execute the capital injection through various channels, including private placement, rights issue, public offer, asset sales, or zero-coupon convertible subordinated debt notes.

The approval which was granted at the company’s Extra-ordinary general meeting held today in Lagos, shareholders also empower the board to determine conversion terms, allot shares, and revalidate legacy shares where necessary.

The EGM aligns with the Nigerian Insurance Industry Reform Act, 2025 (NIIRA), the Companies and Allied Matters Act, 2020 (CAMA 2020), the Investment and Securities Act, 2025, the Rule Book of the Nigerian Exchange Limited, and other regulations and directives of NAICOM.

Applauding the shareholders  for the approval, the Chairman of company, Anthony Isa, said “The approval granted by our shareholders today marks a vital milestone in securing the long-term strength and regulatory compliance of African Alliance Insurance Plc. By authorising the Board to raise up to N12 billion across flexible capital structures—including equity, debt notes, and asset optimisation—we are positioning the company to fully satisfy the recapitalisation requirements of the Nigerian Insurance Industry Reform Act while creating sustainable value for all stakeholders.

The board also got approval as part of and in furtherance of the company’s recapitalisation, approval “to sell, transfer or otherwise dispose of such properties or other assets of the company, whether or not constituting a major asset transaction, on such terms and conditions as may be approved by the board of directors, and permitted by applicable law, subject to the requisite regulatory approvals.”

In addition, the board  was also mandated  to amend the organisation’s Memorandum and Articles of Association (MEMART) “to the extent necessary or desirable to give effect to the recapitalisation, including any consequential increase in issued share capital and the allotment of shares pursuant thereto.”

Also, Managing Director/Chief Executive Officer Ayobami Ogunkeye, African Alliance Plc, assured shareholders that leadership is thoroughly vetting all potential equity partners in order to safeguard the firm’s foundational identity.

“We are extremely cautious about who we bring on board or align with, because this is a lasting commitment,” Ogunkeye stated. “Many parties have capital, but what drives them? Do they value what African Alliance represents, or are they simply after breaking it up for parts? We are rigorously vetting interested parties to make sure our goals match theirs.”

Ogunkeye disclosed that leadership is actively in talks with the Nigerian Exchange Limited (NGX) and other regulatory agencies to clear up longstanding filing gaps and open the door for the company’s shares to begin trading again.

“There is underlying worth here that matters greatly. We are actively in discussions with the regulators so trading in our stock can be reinstated on the exchange,” he noted. “At present, our share price sits well under its face value, but once this recapitalisation drive is finalised, we anticipate raising the share value to roughly 70 kobo or N1.00, restoring our position among stocks that are actively traded and hold real worth.”

The post African Alliance Secures Shareholders Nod to Raise N12bn, Eyes Return to Active Trading appeared first on Business Today NG.

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