Nigerian billionaire Abdulsamad Rabiu in talks with China's Sinoma over $1.9B steel and cement deal

Nigerian billionaire Abdulsamad Rabiu, Chairman, BUA Group. Credit: theheraldng.com

Nigerian billionaire Abdulsamad Rabiu‘s conglomerate BUA Group is in talks with China’s Sinoma to build a steel plant in Nigeria and two cement plants in East Africa for $1.9 billion.

Abdulsamad Rabiu said the unlisted company was talking to the Chinese firm for a construction package which includes financing, building on an existing relationship. Both firms already agreed in September on a $600 million cement expansion in Nigeria.

Rabiu gave no details on the funding but Nigeria has been in talks with China’s state export and import bank for a loan to spur investments of Chinese firms in Africa’s top oil exporter.

The two cement plants, which will have an annual capacity of 3 million tons each, will cost $700 million. The steel plant, with a capacity of 1.2 million tons, will cost $1.2 billion.

“We have identified two countries that we believe hold great opportunities for us in terms of building integrated plants,” Rabiu told Reuters on Wednesday, declining to name the countries in East Africa.

“With the (fall) in the price of commodities … we can do them much cheaper than what it would have cost some years ago,” he said. The construction of the Nigeria-based steel plant would include a 200 megawatt power plant.

Rabiu said the expansion would help BUA to tap demand to lower reliance on import-dependent businesses such as sugar as a slump in oil prices made it difficult to generate dollars.

Nigeria has its own iron supply, while the sugar industry depends on imports.

BUA’s main rival, Dangote Cement, has also been expanding with Sinoma, signing in September a $4.34 billion deal with the Chinese firm to almost double its capacity across Africa.

Source: Business & Financial News, Breaking US & International News | Reuters.com

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