BUA Foods Rice Unit to Commence Production this Year

A subsidiary of BUA Group, BUA Foods Plc, on Tuesday stated that it will begin rice business in the second half of the year.

Investors King recalls that BUA Foods listed N18 billion shares on the main board of the Nigerian Exchange Limited (NGX) two weeks ago.

The rice production is expected to recommence with 480 MT daily capacity and in future rise to 2,700 MT daily.

The Managing director of BUA Foods Plc,  Ayodele Abioye disclosed this while presenting the company’s “Facts Behind the Listing (FBL)” at a webinar organised by NGX.

Abioye noted that the new rice and pasta plants will be completed this year to add to the already existing three businesses of the company– sugar, flour and pasta.

In his words, “BUA Foods Plc was birthed in 2021, and this was an outcome of a planned restructuring process of all our food business entities. 

“Today, we are here to follow up on this listing of this enlarged entity which became listed on the Nigerian Exchange on the 5th of January, 2022.

“Three of our five business divisions, namely sugar, flour and pasta, are currently and fully operational and are contributing to our current revenue stream. 

“While our rice division will begin operation before the end of the year, we are working to also recommence our edible oil operation in the mid to long-term frame.”

Abioye further mentioned that the two subsidiaries of the company are growth engines strategically put in place for long-term economic value creation adding that the sugar refinery opens a market expansion opportunity into the West African and African market. 

He averred that the company’s current market leadership makes it protected in the marketplace with its ongoing expansions.

Abioye hinted that its relationship with its host communities and supply network will not be soiled as it embarks on expansion.

“We will also continue to drive our supply chain integration, again, through the backward integration programme,” he added.

Also speaking, the chief financial officer, BUA Foods Plc, Abdul Rasheed Olayiwola hinted that the company’s revenue growth is impressive. 

Comparing the income in 2020 and November, 2021, Olayiwola said “Bua Foods has experienced significant revenue growth.

“We recorded a 58% growth in revenue for the 11 months, ending November 2021. Sugar remains the highest contributor to our revenue, contributing a total of 63% of our total revenue.

“The reason for this significant growth in our revenue is not far-fetched. It is simply due to our market acceptability.” 

The chief financial officer stated that BUA Foods gross profit grew from N64.9 billion in 2020 to N96.2billion in 2021 and the pre-tax profit (PBT) rose from N49.6 billion in 2020 to N78.8 billion in November, 2021.

He pointed that despite the rise in BUA Foods production cost, it obtained a 29.5% profit margin.

“The company will become more diversified as its rice and edible oil become operational within the year and in the short-term period,” Olayiwola explained.