BUA Foods to start rice production this year, says acting MD

BUA Foods Plc, a subsidiary of BUA Group, says it will commence rice production in the second half of 2022. 

Ayodele Abioye, managing director, BUA Foods Plc, said this on Tuesday while presenting the company’s “Facts Behind the Listing (FBL)” in a webinar organised by the NGX. 

Two weeks ago, BUA Foods listed N18 billion shares on the main board of the Nigerian Exchange Limited (NGX).

According to Abioye, the rice business is expected to recommence with 480 MT per day capacity, and future expansion plans target a total capacity of 2,700 MT per day.

Speaking on the business structure of BUA Foods, he highlighted that three out of the company’s five businesses are in operation, namely sugar, flour and pasta. 

He added that the new flour rice and pasta plants will be completed later this year. 

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

“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 businesses division, 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. 

“It is worthy of emphasis to mention that our two subsidiaries are strategically growth engines focused on our long-term economic value creation. 

“To highlight that is to say that the destination sugar refinery presents our market expansion opportunity into the African market and the West Africa as a start. 

“Furthermore, it is also to mention that our current market leadership equally positions us in such a way that we will not only be protected but improved upon as we complete ongoing expansions.

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

“Finally, we will progress our partnership with our host communities and our supply networks.” 

Speaking on the company’s financial performance, Abdul Rasheed Olayiwola, chief financial officer, BUA Foods Plc, noted the company’s revenue growth was remarkable.

“On our revenue, between 2020 and November 2021, Bua Foods experienced significant revenue growth,” Olayiwola said.

“We recorded a 58% growth in revenue for the 11 months, ending November 2021.”

According to him, the company will become more diversified as its rice and edible oil become operational within the year and in the short-term period. 

“Sugar remains the highest contributor to our revenue, contributing a total of 63% of our total revenue,” he said. 

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

Olayiwola said the BUA Foods gross profit grew from N64.9 billion in 2020 to N96.2billion in 2021.

Also, pre-tax profit (PBT) rose from N49.6 billion in 2020 to N78.8 billion in November 2021.

Olayiwola noted that despite the increase in BUA Foods production cost, the company achieved a 29.5% profit margin.