BUA to expand production after N504bn dividend

BUA Foods Plc has unveiled plans to increase local food production and make staple foods more affordable, following shareholders’ approval of a record N504bn dividend at the company’s fifth Annual General Meeting.

The company said the next phase of its growth would include expanding its flour milling and pasta production capacities, launching a noodles business, completing its edible oils operations, and rolling out an integrated feed mill, positioning it to become Nigeria’s largest indigenous food manufacturing company next year.

Speaking at the AGM in Abuja on Wednesday, the Chairman of BUA Foods Plc, Abdul Samad Rabiu, said the expansion was driven by the need to strengthen Nigeria’s food manufacturing sector rather than simply increase the company’s size.

“By next year, when our current projects are completed, BUA will become the largest player in our sector in Nigeria. We are not pursuing growth simply for the sake of becoming bigger. We are pursuing growth because scale matters in an industry like ours,” he said.

Shareholders approved all resolutions presented at the meeting, including the payment of a final dividend of N28 per ordinary share, amounting to N504bn, alongside the audited financial statements for the year ended December 31, 2025, the re-election of retiring directors and other statutory resolutions.

Rabiu said BUA Foods had a responsibility that extended beyond delivering returns to shareholders, noting that the company also had a role to play in supporting Nigeria’s industrial development.

“While we are proud of our financial performance, we recognise that we operate in an industry that plays an important role in the development of our country. We therefore have a responsibility not only to create value for shareholders, but also to help build a stronger, more competitive industry that contributes to Nigeria’s long-term growth,” he said.

He explained that Nigeria’s food manufacturing industry remained highly concentrated, with four companies controlling almost 90 per cent of the market, adding that BUA was the only indigenous Nigerian company among the leading players.

“In any concentrated market, the strongest force for efficiency, innovation and value creation is competition. The more competitive the market becomes, the stronger the industry becomes and the greater the benefits for consumers, investors and the wider economy,” Rabiu said.

He added that the company’s long-term objective was to build sufficient scale to compete effectively with every major player while encouraging stronger indigenous participation in Nigeria’s industrial sector.

“Our objective is straightforward: to build sufficient scale to compete effectively with every player in the market. We believe Nigeria benefits when there are strong indigenous companies capable of competing at the highest level, investing for the long term and challenging established market positions,” he stated.

According to the company, the expansion projects are expected to significantly increase local production capacity, broaden consumer choice, strengthen supply chains and reduce dependence on imported food products, while reinforcing Nigeria’s long-term food security ambitions.

In responses to questions from journalists after the AGM, the company said its investment priorities over the next 12 to 24 months would focus on doubling capacity across its wheat-based products portfolio while expanding into the noodles and edible oil segments to meet growing consumer demand.

The company said the investments would enhance production capacity, improve product availability, deepen market penetration and support sustainable revenue growth.

BUA Foods also said affordability remained central to its operations despite persistent inflationary pressures, exchange rate volatility and rising production costs.

Rather than relying on price increases, the company said it had continued to improve operational efficiency, optimise procurement, diversify its energy sources, strengthen local sourcing and leverage economies of scale to absorb cost pressures before considering adjustments to product prices.

It added that while recent economic reforms had improved foreign exchange stability and planning visibility, global disruptions continued to influence input costs, although those pressures were expected to ease over time.

Rabiu said the company’s growth strategy was anchored on the principles that had enabled it to compete successfully even when it was much smaller than its rivals.

“The lesson is a simple one: size alone is not enough. Efficiency matters. Transparency matters. Good management matters. Those principles helped us compete successfully when we were the smallest major player in the industry, and they will continue to guide us as we become the largest,” he said.

He stressed that BUA’s expansion would deliver broader benefits beyond the company itself by creating jobs, developing local capacity and supporting national economic growth.

“As a proudly indigenous company, we believe Nigeria benefits when strong local businesses invest, expand, create jobs, develop local capacity and reinvest their profits back into the economy. Our ambition is not only to create value for shareholders but also to contribute meaningfully to Nigeria’s industrial development and economic growth,” Rabiu added.

The expansion follows another record financial year for BUA Foods, with the company reporting revenue of N1.77tn, a 16 per cent increase over 2024, while profit after tax rose by 95 per cent to N518.4bn, reflecting strong operational performance and disciplined execution.

Speaking during a post-AGM interview, the Non-Executive Director of BUA Foods, Kabiru Rabiu, called for greater public and private sector investment in agriculture to strengthen food security and boost domestic food production.

He urged governments to make key farm inputs, including fertilisers and herbicides, more affordable through subsidies to improve farmers’ productivity, noting that BUA Foods had already made investments in the sector and encouraging other private investors to collaborate with federal and state governments.

Rabiu identified insecurity as a major constraint to agricultural production but acknowledged ongoing government efforts to tackle the challenge.

He also advocated increased investment in irrigation infrastructure, saying Nigeria must reduce its dependence on seasonal rainfall and adopt year-round farming practices similar to those of countries that have achieved sustainable food security.