ABDUL SAMAD RABIU’S BUA FOODS PLC BREAKS NEW GROUNDS FOR STOCK INVESTORS, OFFERS HOPE AGAINST HUNGER

BUA FOODS LISTING: NEW FILIP FOR NGX, NEW HOPE IN BATTLE AGAINST HUNGER

BUA Foods Plc is a consolidation of BUA Group’s five food businesses which comprises of a range of consumer products, which are Flour, Pasta, Sugar, Edible Oils and Rice. As announced a couple of weeks back, the five food businesses which were hitherto part of the larger BUA Group are now to come under the new umbrella. Shortly after the announcement came the news that the new company had fulfilled all the criteria as a new member of the Nigerian Exchange, NGX.
The newest listing on the Nigerian Exchange came on board 5th January, 2022. Prior to its formal launch, the Chairman of BUA Group, Abdul Samad Rabiu had hinted of the possibility of consolidating and listing its foods business into a BUA Foods unit, carved out of the larger BUA conglomerate, operating in the Exchange. This was a development that had to come given the sheer size of BUA’s investments in the sector as well as what the organisation set out to achieve. According to him, ‘the move will help resolve the food crisis in Africa’s most populous nation’ while also fulfilling the dream of the founders of BUA to be one of, if not the biggest player in the sector.
‘A lot of people do not know the size of our investment in the sector. That is why we decided to actually merge all the food businesses. Now that we have done that, people will understand and appreciate the businesses’, he disclosed. Giving further insight, he revealed that “the investments that make BUA Foods PLC is a huge business and has a lot of impact, especially the plantation that we have in Kwara State. Because that is a 20,000-hectare project,” which the group expects to begin production of around 200,000 tons of white fortified premium quality sugar this year 2022 as well as 20million litres of ethanol. In addition to this, BUA’s Lagos and Port Harcourt sugar refineries have a combined production capacity of over 1.5 million tons per annum, with the Port-Harcourt plant being an export-based refinery, the West African region being its target market. Billionaire Abdul Samad Rabiu also said that an expansion project in flour milling and pasta will be delivered in Port Harcourt by mid-2022.
Currently at 576,000 tons of flour milling and 250,000 tons of pasta, the Group’s combined capacity for both products is anticipated to be upped to 1.4 million tons come next June. All these are pointers to a conglomerate that affects the lives of millions of people in Africa’s most populous country as well as other countries in the sub-region.

What the BUA Chairman did not reveal is the fact that, Nigeria, just like other nations of the world seriously face a food challenge and efforts are being made by stakeholders to ensure that the impending food crisis do not hit Nigeria so much. The crystallization of BUA Foods investments in this sector this year, therefore will serve as a big boost for the country to tackle this challenge whilst also deepening the Nigerian Capital Market – which is a desire of NGX, the nation’s premier capital market operator, since its demutualization took place . Place this side by side with the commitment the Group Chairman has made about ensuring that some of the products are meant for export through the export- inclined Port Harcourt based sugar refinery, the multinational dimension of BUA Foods is better understood. Earlier, it had been revealed that BUA Foods plan to acquire two vessels to further enhance its position as a major player in the food chain in the continent as well as utilizing the opportunity offered by the AfcFTA.

The entry of BUA Foods PLC into the Nigerian Exchange is perhaps one of the best things investors have had for a long time. Recall that the cement arm, BUA Cement, earlier debuted on the NGX about this time in 2020 and is now worth roughly N2.4 trillion, more than double its value.
And when listed, BUA Foods Plc came with a bang, attained quoted company status after it listed 18 billion ordinary shares beginning with a N40 Per unit share price. The milestone implies the firm has gained entry into the Nigerian Exchange Limited (NGX)’s main board (the bourse’s second highest listing segment), and at the same time become its biggest consumer goods company by market capitalisation after Nestle Nigeria in a sector that comprises other powerhouses like Nigerian Breweries and Flour Mills of Nigeria.

BUA Foods was listed at N40 per unit but appreciated by 10 per cent on the day of its admission, the maximum upper price movement the NGX allows, putting its valuation at N792 billion. This in effect was another milestone. The main news however is the fact that ever since it was welcomed to the NGX, BUA Foods stock has become the most traded while it has continued to grow maximally, virtually every day.
Indeed, from the time of listing, the FMCG has experienced huge buy-interests, hence, share price has appreciated by a total of 46.25% in three trading days.

According to analysts, the company has now joined the SWOOTs group, that is, Stocks Worth Over One Trillion on the Nigerian Exchange Limited. Stocks included in the classification are, Nestle Plc, Airtel Africa Plc, BUA Cement Plc, Dangote Cement Plc, MTN Nigeria Plc and BUA Foods Plc, with BUA Group becoming the only organisation to have two different companies among the SWOOTs Group. As at close of business on Tuesday, January 11, 2022, the company had attained trillion Naira market capitalization status – a preserve of very few Nigerian companies.

In the words of the Acting Managing Director BUA Foods, Ayodele Abioye, “the listing marks a new beginning for a Company playing a critical role in the FMCG industry, one that’s highly committed to nourishing lives with all our product offerings.”
“The listing resonates with our commitment to sustainable growth as we nourish and enrich the lives of consumers by delivering high quality products at competitive prices.”

“Through this listing, we have become a stronger and more viable player in the food sector, with investments in rice, sugar, flour, pasta and edible oils. This means more jobs for the people, availability of food and ultimately a better quality of life for all.”

Strong Stock, Stronger NGX

Even before it was listed, BUA Foods has been an industry delight exceeding all other consumer goods indices. Data obtained on company filing index for food company metrics reveal that BUA Foods is far above all the other food companies. This was pre-listing. Apart from the transparency which has been the hallmark of BUA Group’s business dealings, the experience with the 2020 BUA Cement listing seemed to have awaken many to the integrity and strength of BUA financial products and why it is not only a safe buy but also one that can always give high yields despite the general downturn the world has faced.

It is therefore safe to assume that many of those who couldn’t have a bite at the BUA Cement apple in 2020 will definitely see the BUA Foods as an opportunity to invest in the conglomerate.
So far so good, the value of the stocks have continue to soar. For those who dare to invest, the listing is a big bang from the new kid on the NGX block. After entering at 40.00 per share, BUA Foods stock has risen by close to fifty percent in just a few days. It offers a major platform since as many as 18billion ordinary shares are available. If what happened in the case of BUA Cement is anything to go by, BUA stocks will definitely continue to be money spinners for a long time to come.

There is no doubt that the entry of BUA Foods into NGX has further generated confidence around the exchange. It has boosted confidence and offered investors something to cheer about. This perhaps explains the maximum upper price movement the stocks have enjoyed since its listing. The implication of this for the Nigerian economy, coming so early in the year is optimism, though it might be cautious. Listings like BUA Foods propel confidence by help in driving investments in company stocks and rub off on the general outlook of the economy.

But it is not only investors that will benefit from this. Ultimately, Nigeria and indeed Africa will.
Bamidele Ogundana