BUA Foods Plc is expanding its production capacity as part of a long-term strategy to strengthen local manufacturing, improve food security and support Nigeria’s economic growth.
Abdul Samad Rabiu, chairman of BUA Foods, said the company’s responsibility goes beyond delivering returns to shareholders. He said the wider goal is to build a strong indigenous food manufacturing company capable of competing with established global and local operators.
Rabiu spoke at the company’s 2025 Annual General Meeting in Abuja, where shareholders approved a final dividend of ₦504 billion and other statutory resolutions.
He said BUA Foods’ next phase of growth would focus on increasing domestic production, creating jobs, improving competition and supporting Nigeria’s industrial development.
“We 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,” Rabiu said.
Expansion targets market leadership by 2027
Rabiu said BUA Foods is implementing one of the largest expansion programmes in its history.
The programme includes a major increase in flour milling capacity, the introduction of an integrated animal-feed business, a new noodles operation and the completion of its edible-oil facilities.
The projects are expected to begin operations in 2027 and increase the company’s total production capacity by more than 50 percent.
BUA Foods expects the additional capacity to position it as Nigeria’s largest indigenous food manufacturing company.
Rabiu said the expansion was not driven by size alone. According to him, greater scale would help the company compete more effectively, reduce production costs and deliver stronger value to consumers, investors and the wider economy.
“Our objective is straightforward: to build sufficient scale to compete effectively with every player in the market,” he said.
“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.”
BUA seeks stronger competition in concentrated market
Rabiu said four companies currently control close to 90 percent of Nigeria’s food manufacturing market, with BUA Foods being the only indigenous Nigerian business among the leading operators.
He argued that expanding BUA’s capacity would improve competition and encourage greater efficiency, innovation and investment across the industry.
“A more competitive industry is ultimately a healthier industry, and that is good for consumers, good for investors and good for Nigeria,” he said.
The chairman said BUA Foods had shown that operational efficiency, disciplined management and strong execution could be more important than company size.
He recalled that the company was considerably smaller than some established competitors when it was listed five years ago but continued to deliver stronger profitability and investor returns.
“That performance was not an accident,” Rabiu said. “It was the result of efficient operations, disciplined management, prudent capital allocation and a relentless focus on execution.”
He said the same principles would guide the company as it expands into new product categories and increases output across its existing businesses.
How Expansion will improve supply
BUA Foods said its investments would increase the supply of essential food products and support efforts to reduce pressure on food prices.
The company is increasing production across sugar, flour, pasta, rice, edible oil, animal feed and noodles.
It expects the expansion to deepen market penetration, improve product availability and support sustainable revenue growth over the long term.
The projects could also create direct and indirect employment across manufacturing, agriculture, transportation, distribution and other parts of the supply chain.
BUA Foods said its long-term ambition is to build one of Africa’s most integrated food manufacturing businesses while creating value for consumers, investors and the Nigerian economy.
However, increased factory capacity alone may not immediately reduce food prices.
The final prices paid by consumers will also depend on the cost of energy, transportation, raw materials, financing and distribution.
BUA Foods posts ₦1.77tn revenue
BUA Foods reported revenue of ₦1.77 trillion for the 2025 financial year, representing a 16 percent increase from the previous year.
Profit after tax rose by 95 percent to ₦518.4 billion during the period.
The company attributed the performance to improved operational efficiency, disciplined execution and the resilience of its business model despite difficult economic conditions.
Nigeria’s food manufacturers have faced high energy costs, exchange-rate volatility, expensive credit and disruptions to global supply chains.
Despite these pressures, BUA Foods said it had continued to improve productivity and strengthen its domestic operations.
Efficiency remains central to BUA’s strategy
Kabiru Rabiu, a non-executive director at BUA Foods, said the company remained confident of meeting its strategic targets despite inflation, rising energy costs and global supply-chain challenges.
He said management had focused on improving operational efficiency rather than depending mainly on higher product prices to protect earnings.
These measures are intended to reduce production costs while maintaining the availability and affordability of its products.
He said the company’s performance remained broadly in line with expectations, supported by resilient consumer demand and continued investment in new production capacity.
Wheat-based production capacity to double
Kabiru Rabiu said BUA Foods plans to double capacity across its wheat-based product portfolio over the next two years.
The company is also expanding into noodles and edible oils to meet growing consumer demand and diversify its earnings.
The new investments are expected to increase production volumes, expand the company’s distribution reach and strengthen revenue growth.
BUA Foods’ expansion into noodles could allow it to use its existing flour production and distribution network to compete in one of Nigeria’s largest packaged-food markets.
Its investment in edible oil could also reduce dependence on imported finished products, particularly if the company sources more raw materials locally.
The integrated feed mill could support livestock, poultry and aquaculture producers, although its effect on feed prices will depend on the cost and availability of maize, soybeans and other major inputs.
Affordability remains a priority
Kabiru Rabiu said affordability remained central to the company’s strategy.
He explained that management first seeks to absorb higher operating costs through productivity improvements, procurement efficiency, energy savings and economies of scale before considering price increases.
This approach could become more important as Nigerian consumers continue to face weak purchasing power and rising living costs.
Larger production volumes could help BUA Foods spread fixed costs across more units, potentially reducing the average cost of production.
However, the company will still have to manage rising logistics expenses, unstable electricity supply and the cost of moving products across Nigeria.
Foreign exchange stability improves planning
Kabiru Rabiu said recent improvements in foreign exchange stability had given businesses greater visibility for planning and investment.
He said the policy environment had strengthened investor confidence and supported the company’s decision to continue committing capital to long-term projects.
Foreign exchange stability is important to food manufacturers because they often depend on imported machinery, spare parts, packaging materials and some production inputs.
Sharp changes in the value of the naira can raise costs and make it difficult for companies to plan prices and investment.
He also said government policies promoting domestic food production and responsible import substitution were supporting local manufacturers.
Import substitution involves producing goods locally that would otherwise be imported, reducing demand for foreign exchange and encouraging domestic industrial development.
Local sourcing to support long-term growth
BUA Foods said it would continue to increase local sourcing as part of its expansion strategy.
Deeper local sourcing could create opportunities for Nigerian farmers, processors, transporters and other suppliers.
It could also reduce the company’s exposure to foreign exchange shortages and international commodity-price movements.
However, stronger local supply chains will require improvements in agricultural productivity, security, storage facilities, transportation and access to finance.
Nigeria’s food manufacturers often face shortages and rising prices for locally produced raw materials because of insecurity in farming communities and weak logistics infrastructure.
BUA’s ability to develop reliable domestic supply networks will therefore be important to the success of its expansion programme.
What to look out for
Rabiu said Nigeria would benefit when local companies continued to reinvest their earnings, expand operations and build domestic industrial capacity.
He said BUA Foods’ ambition was to become an indigenous manufacturing champion capable of competing with the strongest companies in the market.
The company expects its investments to increase food production, create employment and support Nigeria’s industrialisation agenda.
For investors, the expansion could provide new sources of revenue beyond BUA Foods’ existing sugar, flour, pasta and rice businesses.
For consumers, the success of the programme will be judged by whether the increased capacity leads to greater food availability, stronger competition and more affordable prices.
BUA Foods’ financial performance gives it a strong base for expansion. The bigger test will be whether the company can complete the projects on schedule, manage rising operating costs and translate additional production into measurable benefits for Nigeria’s economy.
