BUA Group: Braving the odds, forging ahead

DOING business in the nation’s rough and thorny business landscape, no doubt, comes with its prospects and challenges. Not a few experts and investors believe that the challenges of staying afloat, for any business, far outweigh whatever prospects the terrain is holding for investors.

For many, it will take great courage, resilience and huge determination on the part of the investor to see his business break even, in a not-too-friendly economic climate such as Nigeria’s. And, they would readily attribute the vast tombstones of hitherto promising business concerns, dotting the nation’s business landscape, today, to the inability of many of such businesses to meet all the aforementioned attributes. The general belief is that it takes the rough and the tough to weather the business storm in Nigeria.

But, one business that seems to have mastered the art and science of doing eking out a living in the nation’s economic landscape, without getting its fingers burnt, seems to be the BUA Group, one of the nation’s leading conglomerates.

A humble beginning

From a modest start in 1988, the conglomerate, which started business as a Private Liability Company, specialising in the importation and marketing of iron and steel, agricultural and industrial chemicals, has grown to be one of the ten most capitalised businesses in the country. It presently boasts of a market capitalisation of N1.2 trillion, and enjoys the status of being in the league of the top 10 companies in the country.

Besides, it has expanded its frontiers to accommodate a huge range of businesses, and has become a behemoth, especially in the nation’s real sector. The management of the group, in the last few years, had embarked on series of acquisition drive that had seen it expand its business frontiers to Cement Company of Northern Nigeria (CCNN), Edo/OBU Cement, BUA Flour Mills, BUA Sugar Refinery, BJA Pasta, BUA Ports and Terminals, and BUA Estates, amongst other agricbusiness holdings.

Products

Some of the products the conglomerate manufactures include, cement, processed sugar, edible oils, rice, and flour, pasta products, real estate and ports. It also distributes agricultural and industrial chemicals, iron and steel, and aggregates.

Activities

Interestingly, one of the factors that have kept the conglomerate going is its continued innovation and determination to go the whole hog in the nation’s topsy turvy business environment, in tandem with its corporate goal of providing high quality products to the widest possible customer base at reasonable prices.

For instance, the group’s investment of $500 million into its large and ultra-modern cement plant in Okpella, Edo State, is seen as a way of bringing its high quality product to Nigerians, and a demonstration of its confidence in the nation’s economy.

Besides, not a few believe that the relative successes recorded by the company, in the past few years, cannot be divorced from right pricing, revenue and cost synergies, and a value-oriented strategy, despite the complexities and uncertainty of the nation’s economic environment.

CSR Profile

Giving back to its operating environments has been one of the cardinal objectives of the conglomerate since opening its door for business in past few three decades. For instance, as a way of supporting Federal Government’s fight against the dreaded COVID-19, the group recently donated an additional sum of N350 million to CACOVID, a CBN-led private sector coalition on COVID-19, bringing to N1.35 billion, its total donation to the coalition.

The group also, recently, donated the sum of N100 million to the Kebbi State government to support victims of the recent flooding in the state.

Sometimes last year, the Group also donated  six  solar-powered  water projects  to various  communities in Okpella, Etsako East Local Government Area of  Edo State, to alleviate the plights of residents, who had been living in those communities for a long time, without light.

Not too long ago, its philanthropic arm, BUA Foundation donated three ambulances and N200 million to support Adamawa State in the fight against COVID-19, in line with its promise to work with Nigeria and support Nigerians in fighting the pandemic.

Also, in the second quarter of the year, the Foundation also donated N200 million and five ambulances to the Lagos State government, to assist it in the fight against the spread of the COVID-19 pandemic, in the state.

The  BUA Group Chairman, Alhaji Abdul Samad Rabiu described the group’s CSR initiatives as typifying its commitment to sustainable obligations as a responsible corporate citizen, while giving the assurance to keep supporting various social and humanitarian interventions.

The group’s Head for Corporate Communications, O’tega Ogra stated that the Group’s CSR initiatives confirm its firm commitment to corporate sustainability, and social development initiatives.

“These projects have reaffirmed that at BUA Group, CSR is more than just a watchword. It is a social pact and enduring commitment between BUA, the people and communities, where we operate to bring about sustainable development,” O’tegra stated.

Financials

Interestingly, its rich CSR profile and activities, and continued innovation of its operational system, have continued to enhance it’s bottom-line. For instance, one of its subsidiaries, BUA Cement Plc, recorded a 47.5 per cent increase in revenues of N175.52 billion, in its recently released full year results for the 2019 financial year.

The company‘s profit also increased by 69.1 per cent from N39.17 billion in 2018, to N66.24 billion in 2019.

While it listed on the Nigerian Stock Exchange, this year, 2020, following the merger of two of its cement entities, the Cement Company of Northern Nigeria and Obu Cement Company, few months later, in May, to be specific, the cement company declared a full year gross dividend of N1.75 per share to shareholders.

Strategies for the future

From its operations since opening its doors to business, over three decades ago, it is clear that the BUA Group’s plans are to remain relevant for some time to come.

For instance, the deployment of innovation, enterprise and creativity  in its various business outlets is an indication of an entity, not ready to relinquish its dominance of the various markets, its subsidiaries are playing, for a long time to come.

Its divestment of its flour business to Olam International, in a deal worth $275 million is also seen as part of its efforts at repositioning the business, and prepare it for the task ahead.

Awards

Interestingly, the feats being performed by the group are not going unnoticed. Just last year, the $1.1 billion merger between BUA Kalambaina Cement and Cement Company of Northern Nigeria, was recognised as the Deal of The Year at the Annual Association of Issuing Houses of Nigeria (AHIN) dinner and awards night.

In 2016, at that year’s All Africa Business Leaders Award (AABLA), in Lagos, the Chairman of the group, Mr Abdul Samad Rabiu, was honoured with the West African Industrialist of The Year at the event, for what the organisers described as his ‘gigantic and unswerving contributions’ to the growth of the Nigerian/West African economy, BUA Cement also won the Cement Brand of the Year in 2015, as the best cement for that year.

Sometimes, in 2019, the Group’s Chairman, Abdul Samad Rabiu, was given global prominence, when it graced one of the editions of Forbes Magazine cover in the year.

Conclusion

But in spite of the midas touch the custodians of the BUA brand, seem to possess, there is the need for the conglomerate to be wary of the increasingly competitive terrain some of its brands are playing. For instance, in the cement market, the presence of competitions, such as Dangote Cement and Lafarge, is enough to intimidate and over whelm the lilly-livered.  The two brands had been around in the business for some time, and they have become household names in that market segment.  Not a few believe the custodians of the brand would have to dig deep to be able to hold on to its share of the market, where these two ‘cement manufacturing giants operate.

Fortunately, the custodians of the brand seem to be battle ready for such competition. Since taking over the family business in 1983, Abdul Samad Rabiu has left no one in doubt of his determination to make a success of the enterprise. He seems battle ready to forge ahead and brave the odds, and not even the presence of these business juggernauts, can stand on his way.

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