Business
BUA blames energy and transport costs for high cement prices
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 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.
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.
“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.
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“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.
The Central Bank of Nigeria (CBN) has proposed the revision of the regulatory framework governing financial holding companies to bolstering the resilience and stability of the country’s financial system.
The regulator disclosed the plan in a circular signed by Rita Sike, the director of its Financial Policy and Regulation Department, on Thursday, inviting stakeholders to send their reviews of the guidelines by 9 July.
“Following several years of implementation, the CBN has identified areas within the extant guidelines that require enhancement to strengthen the operational effectiveness and regulatory oversight of financial holding companies,” the statement noted.
CBN stated that it would further promote a safe, sound and resilient financial system with the guidelines.
It noted that the overhaul was necessary after years of implementing the existing framework introduced in 2014 to mitigate the risks arising from the conduct of non-core banking activities within banking groups.
The regulation review addresses gaps and aligns with evolving regulatory and market developments.
Revisions
Among the key revisions in the guidelines is the clarification and enhancement of minimum capital requirements for financial holding companies to ensure their capacity to serve as a reliable source of financial strength to their subsidiaries.
The revised guidelines also address identified gaps in shared services arrangements to prevent potential abuse or undue advantage over banking subsidiaries.
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According to the CBN, the revision takes into consideration the establishment of clear eligibility requirements for promoters seeking to set up financial holding companies.
The revised framework streamlines the structure of financial holding companies by permitting them, instead of their Nigerian banking subsidiaries, to directly own equity interests in foreign subsidiaries.
It also requires financial holding companies to maintain a minimum 51 per cent equity stake in each subsidiary and be registered as persons with significant control with the appropriate corporate registration authority.
Nigeria’s crude oil production topped its Organisation of the Petroleum Exporting Countries (OPEC) quota in May, reaching its pinnacle in 15 months and cementing its position as Africa’s leading oil producer.
Data released by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed the country produced an average of 1.53 million barrels of crude oil per day (bpd) during the month.
With a condensate production of 170,446 bpd included, the commission put Nigeria’s average total hydrocarbon output at 1.7 million bpd.
“Nigeria’s oil production witnessed an upswing in May 2026, averaging 1,530,354 barrels of crude oil and 170,446 barrels of condensates per day, bringing the total combined production to 1,700, 800 barrels per day and consolidating Nigeria’s position as Africa’s largest oil producer,” NUPRC said in a statement on Thursday.
The figure represents 102 per cent of Nigeria’s OPEC production quota of 1.5 million bpd, according to the regulator.
The latest performance marks a significant milestone for the country’s oil sector, with total production standing at its peak since last July, when the combined crude oil and condensate output reached 1.71 million bpd.
With the figure for condensates excluded, the 1.53 million bpd in May represents Nigeria’s strongest performance since January 2025, when output touched 1.538 million bpd.
The May figure also represents a 15-month high for crude oil production, excluding condensates.
While Nigeria’s oil production continues to witness significant growth, oil rich communities from the country’s Niger Delta region are grappling with unprecedented levels of oil and gas pollution amidst renewed exploration targets.
Remediation efforts across the region have been conspicuously slow, raising concerns over the country’s refusal to prioritise the welfare of the residents of the region.
Production rises month-on-month
Crude oil production (excluding condensates) in May increased by 2.8 per cent from 1.48 million bpd a month earlier.
The trend has remained positive over the past five months. Combined crude oil and condensate production rose from 1.48 million bpd in February to 1.54 million bpd in March, 1.66 million bpd in April and 1.7 million bpd in May.
The steady rise suggests sustained improvements in operational efficiency across the upstream sector, despite the ongoing challenges facing the global oil market.
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Among Nigeria’s major production streams, Bonny Terminal recorded the highest output, contributing 293,870 bpd.
Forcados Terminal followed closely with 289,900 bpd, while Qua Iboe produced 173,360 bpd.
Escravos Oil Terminal accounted for 135,470 bpd, while Odudu (Amenam Blend) completed the top five production streams with 63,250 bpd.
Improved operations
The NUPRC attributed the improved production performance to stable operations across the industry.
According to the commission, there were no significant pipeline disruptions or facility outages during the period under review.
It also noted that all the previously scheduled turnaround maintenance programmes have been successfully completed, contributing to improved operational reliability and higher production efficiency.
The latest figures could boost government revenues and strengthen confidence in the ongoing efforts to raise Nigeria’s oil production capacity, which has been constrained in recent years by crude theft, pipeline vandalism and operational challenges.
With output now above its OPEC quota, attention will turn to whether the country can sustain the momentum in the coming months.
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