Not only is agribusiness relatively simple in terms of its business model, but it is urgent to save needed foreign exchange and to boost employment, he explains.

Rabiu’s major focus is on promoting more production and processing to meet national demand and make more profits for his conglomerate BUA Group.

BUA listed its subsidiary BUA Cement in January to raise capital for industrial projects in the glass, steel and oil sectors, citing the rigour and “scrutiny” of the process as a way of “de-risking” Nigerian opportunity for investors domestic and foreign.

“The opportunities are here,” enthuses the group chairman and chief executive during our videoconference in May, a portrait of South Africa’s former president Nelson Mandela beaming over his shoulder [note; this interview was held before the announcement of BUA’s refinery deal in September]

That has not really been the case for the man on the Lagos Danfo, to coin a phrase – the city buses were restricted due to measures against transmission of COVID-19.

Most Nigerians are still reeling from the economic impact of the pandemic. Traders have ceased operation, farmers have thrown away produce due to the lack of transport, and businesses have mothballed investment projects.

READ MORE Nigeria: Pandemic to poverty in the post-COVID future

Most of BUA Group’s expansion programme remains undisturbed. Chief executive Rabiu unveiled plans for 3 million tonnes per annum (mtpa) in cement capacity and 50MW of power in Adamawa State in July.

However, he put off the announcement of a glass production project that was slated for the postponed June France-Africa summit. While COVID-19 disrupted most firms, greater automation in BUA Group’s agribusiness and cement plants allows them to operate at about 40-50% of their normal capacity. “We are lucky for the fact we are even at 50%. Many others have not been able to work at all,” says Rabiu.

BUA Cement had a solid first quarter in 2020, banking nearly $60m in profit.

The ban on travel between Nigeria’s states was the greater challenge, “and that is lifting now”. He argues that “the impact [of the coronavirus] is going to be with us for quite some time” and that “entire industry business models are going to have to change.”

Better than 2019

Learning from operating his family business as a young man, Rabiu has built up his empire slowly but surely. BUA Group has moved from a trading company importing commodities to a manufacturing powerhouse in agribusiness and construction materials. From edible oils, through sugar and cement projects, the group also operates a shipping terminal in the oil town of Port Harcourt and owns a real-estate portfolio.

Cement remains the industrial star.

BUA Cement had a solid first quarter in 2020, banking nearly $60m in profit. This means, according to Rabiu, that it can absorb the slowdown from April to June, and have year-end results that may be “better than 2019”.

That is not something many other Nigerian companies are predicting. It is bullish given the record year the company had in 2019; a 47.5% increase in turnover, with profit jumping nearly 70%.

He attributes the leap to the launch of a second line at the Obu plant in March 2019, adding 3mtpa to BUA’s output, and the first full year of the Kalambaina plant’s second line operations. The cement expansion does not stop; while BUA Cement currently has capacity for 8mtpa, Rabiu is targeting 14mtpa over the next few years.

Analysts do not share Rabiu’s optimism about the sector in the short term. “We expect the deterioration in the macroeconomic conditions – caused by the outbreak of COVID-19, which triggered a sharp decline in oil prices – to constrain activities in the construction industry as fiscal spending on capital projects weakens,” wrote Nigeria’s CSL Stockbrokers.

The scars will remain for some time for the Nigerian economy at large, Rabiu says, with the damage hitting the poorest first. “The price of goods has gone up, especially food items,” he says, partly as a result of the devaluation of the naira but also because the virus has hurt port logistics, making the clearance of imports difficult.

We have 60% of the world’s arable land. We have the people [to farm].”

That could be seen as an opportunity to intensify Nigeria’s great push to support food production, something that the government of President Muhammadu Buhari has supported for rice in particular.

READ MORE Nigeria takes drastic measures to ensure local rice production

As part of Nigeria’s CACOVID (Coalition Against COVID-19), an organisation of private-sector operators pooling funds to help relief efforts, BUA has put money into feeding programmes in Lagos and other cities, to cushion the blow of the pandemic.

Fundamentally, Rabiu is unhappy about the high level of food imports. “It should not be happening at all, not only here in Nigeria, but generally in Africa. We have 60% of the world’s arable land. We have the people [to farm]. We have the climate. We have everything it takes.”

READ MORE Greener Africa : ‘It is scandalous that Africa has the world’s highest prevalence of hungry people’

He is keen for that opportunity to go beyond food crops to cash crops, and again focus on keeping value in Africa. “The US, Germany, Switzerland and Belgium produce 75% of the entire chocolate production worldwide. And if we look at the cocoa industry worldwide, what are we talking about, $150bn-$160bn? And Africa gets maybe $10bn-$15bn of that?”

Sugar for resilience

He expects agriculture to provide the resilience that Nigeria needs in the post-COVID-19 era. Next year, for example, will see the ramping up or opening of operations at three major sugar plantations, including BUA’s own in Kwara State, as well as projects for Dangote Sugar and Golden Sugar.

BUA is Nigeria’s second-largest sugar producer after Dangote Sugar. “With that plantation, we will be able to produce 150,000tn of white sugar with millions of litres of ethanol, employing over 10,000 people in direct jobs,” says Rabiu.

He was inspired by a visit to Uganda’s Kakira sugar estate, run by the Madhvani family: “It was the most impressive sugar plantation I had ever seen.” And Mayur Madhvani told Rabiu that while he could get yields of 9tn per hectare in Uganda, the soils and potential in Nigeria were far greater.

This enthusiasm is shared by the government in Nigeria, whose industrial policy includes the ‘backwards integration programme’ that tries to claw back some of the $640m Nigeria spends on importing sugar from Brazil each year by incentivising local production.

This import-substitution move has played out with Buhari closing Nigeria’s border with Benin in August 2019 in a bid to protect local rice producers. Rabiu has applauded that policy. And he wants to see this battle to retain value in Nigeria in other sectors, too.

READ MORE Flour Mills of Nigeria backs closure of border with Benin

Rabiu rattles out the value chain from iron ore to finished steel in a heartbeat. Nigeria has untouched iron ore deposits in Kogi State, and he is waiting for a concession from the government on gas prices before building a 350km pipeline from Delta State to Kogi in order to build a power station. “You need 250MW of power, and this you cannot get from the government or grid”, says Rabiu. He adds that the government is working on the approvals, having already granted the mining licences.

Glass is also in his sights. “Ogun State is sitting on limestone silica. You only need silica and energy to make glass”, says Rabiu, who is in partnership talks with a leading French glassmaker.

There is no market here in Africa like Nigeria”

The industrialist is also looking to expand in the energy sphere. “We are looking at everything. We have not decided whether it is going to be upstream or downstream.” Or, indeed, midstream.

To realise all these projects will require capital. That is a major reason for the listing of BUA Cement on the Lagos Stock Exchange in January. With a market capitalisation of $3.3bn, it is  now the third-largest company on the bourse.

But, says Rabiu, this was not the only reason for the stock listing. “Corporate governance is very important,” he says, harking back to the efforts made by Asian companies in the 1990s to attract global investors by improving their transparency. While the short-termism of some stock investors may have its downsides, Rabiu argues that their involvement allows you “to build a business that I believe will stand the test of time.”.

Up next: the invitation of independent directors to the board – “from Europe, from Asia, America, wherever. And, although this is still early, we are talking to see if we can list on the London Stock Exchange,” says Rabiu.

One clear difference he points to between himself and other major Nigerian investors is that he believes Nigeria is where it is at. “I know a lot of people say, ‘I’d like to go to other countries in Africa’. […] But there is no market here in Africa like Nigeria. This is where the population is, this is where the market is.”

He may or may not be commiserating with Nigerian bosses who have had their fingers burnt in failed expansions abroad.

Things have not all been easy for BUA,despite the strong first quarter for its cement operations.

A fight with the Nigerian Port Authority, which last year closed the terminal BUA Group runs in Port Harcourt, was only amicably settled in June. The company is also sparring with the Dangote Group, in the courts and in the media, about who owns mining sites in Edo State.

The battle for Nigerian industrial supremacy will not be without its dust-ups.