BUA Group, one of Africa’s leading foods, mining, and infrastructure conglomerates on Tuesday signed an agreement with Axens of France for the supply of process technologies for its upcoming 10million tonnes per annum mega refinery and petrochemicals facility to be sited in Akwa-Ibom, Nigeria.
The multi-billion-dollar integrated 200,000 bpd refinery and petrochemical plant aim at producing Euro-V fuels and polypropylene for domestic and regional markets.
The landmark agreement was signed between the Chairman of BUA Group, Abdul Samad Rabiu, and the CEO of Axens, Jean Sentenac, in a ceremony presided over by France’s Minister Delegate for Foreign Trade and Economic Attractiveness, Franck Riester.
France’s largest hydrocarbons group, Axens won the contract to supply key refinery technologies the BUA Group.
Commenting on the ground breaking deal, BUA CEO, Rabiu, said the economics of the project are a ‘no-brainer’: “Nigeria imports 90 per cent of it’s petroleum products. We spend 35 per cent of our foreign exchange on importing petroleum products.” The new refinery, with a capacity to produce 200,000 barrels per day (bpd), should be operational in 2024.
This will complement the Dangote Group’s project that will produce 600,000 bpd.
The bidding process was managed by energy consultants KBR, which will also be handling subsequent rounds for the engineering and construction phase, currently underway. The refinery will be built using an undisclosed mix of debt and equity, with several development and commercial banks in negotiations with BUA Group. It comes as a shot in the arm for the French economy, reeling from COVID-19 shutdowns and weeks of strikes prior to the pandemic.
The new project signing is coming few weeks after BUA Cement announced it was planning to establish a 3million metric tonnes per annum cement plant as well as a 50megawatts power plant in Adamawa State in North East Nigeria.
Rabiu who stated this during a courtesy call on the Governor of Adamawa State by the management of BUA Cement hinted that the new plant, when completed will bring the company’s total installed capacity to 14million metric tonnes per annum.
BUA Cement is the only cement producer in the entire North West Region of Nigeria and currently has two plants in Kalambaina, Sokoto State with a combined installed capacity of 2million metric tonnes per annum in addition a new 3million metric tonnes plant set to begin operations in sokoto in the first half of 2021. The nearest plant of any competitors in Nigeria to BUA Cement’s Sokoto operations is about 900kilometres away.
In its recently announced 2020 half-year results, the company declared a revenue of N101.3billion and a Profit After Tax of N34.82billion representing an increase of 12.7 percent and 13.74 percent respectively compared to figures in the corresponding period of 2019. In a filing to the Nigerian Stock Exchange, Yusuf Binji, managing director of BUA Cement said the 2020 performance in the face of a challenging operating environment occasioned by the COVID-19 pandemic was a pointer to the value and strength of the BUA Cement brand and product offerings as well as a nod to the excellent implementation of its business Continuity Plan which ensured that BUA Cement was able to withstand the impact of the pandemic in the period under review.
“Our resilient performance continues to showcase the value and strength in our product offering alongside our strategic business model. Our revenues increased by 12.7 percent to N101.3 billion from the corresponding period in 2019 whilst Operating profits increased by 7.0 percent from N38.1 billion in H1’2019 to N40.8 billion in H1’2020. Equally, EBITDA margin improved in this quarter to 48.1 percent an improvement from 45.6 percent in Q1, 2020.”
“In a bid to further drive cost efficiencies and sustainability, we entered into strategic alliances for the supply of Liquefied Natural Gas (LNG) at the Kalambaina, Sokoto State and the management of our mining operations. Given these deliberate and strategic choices amongst other cost management efforts, we continue to combine development and innovation into our offerings and activities.”, Binji added. On the impact of the pandemic on the business, Binji noted that, “despite the prevailing economic conditions, we are quite optimistic about the future because it affords us not only with the opportunity to further evolve our business model but also provides an opportunity for accelerated development. We will continue to push to new markets aided by a focused distribution strategy.”
