How Nigeria’s 2nd Richest Man, Abdulsamad Rabiu Became A Billionaire

BUA Group Chairman Abdulsamad Rabiu’s net worth shot up by a mind bogging $1.9 billion, making him the second richest man in Nigeria, displacing Mike Adenuga, Globacom owner who held the position for several years.

The remarkable rise in Rabiu’s fortune came after his company BUA Foods, which was newly listed on the Nigerian Stock market, gained N420.49 billion in a single week.

The shares of BUA Foods, a subsidiary of BUA Group, rose by 65 per cent within one week of receiving approval to be listed on NGX.

Abdulsamad Rabiu controls about 89.849% of BUA Foods holding, owning 16.17 billion units of shares from the total 18 billion listed shares.

With his total wealth now valued at $6.2billion, the Kano-born cement tycoon is now the fifth richest man in Africa and the 574th in the world.

Background

Though Abdulsamad Rabiu was born into wealth, he faced many adversities growing up.

His father, Ishyaku Rabiu, was a prominent Northern businessman in the 70s and 80s who was into commercial real estate, trading and owned a textile factory.

Ishyaku Rabiu was a serial entrepreneur who exploited other business opportunities in crude oil and construction.

But by the mid-eighties, he ran into trouble with the then General Muhammadu Buhari military government, who arrested him for allegedly hoarding rice. He was jailed alongside other commodity traders.

In the thick of this situation, Abdulsamad returned to the country after he completed his degree programme in Economics from the Capital University in Columbus, Ohio, United States.

He was left with the responsibility to hold forth for his father, but the business was far from what it used to be due to government restrictions.

How BUA Group started

In 1988, Abdulsamad Rabiu stepped out to register his owned business, BUA International Limited, for commodity trading.

Even though the BUA Chairman had learnt a lot from the business instinct of his father, he brought something different to the table as he sought ways to add more value to the consumers rather than exploiting them.

How BUA distinguished itself from competition
The business landscape back then used was predictable. There was very little innovation because the emphasis was more on making a quick profit and less on adding real value.

More so, many entrepreneurs then were averse to risk-taking, so they would only invest their money on projects with the lowest risk level.

“The in-thing was the importation of rice, sugar, fertiliser, agriculture etc. So the challenge was that, if any product was scarce, everybody would now go and import the same thing,” says Rabiu.

“This pushes the price up and everybody will say the price of fertiliser has doubled, so everyone would now go and import fertiliser and within a short time, the product would now come down to half price and everyone would lose money.”

Abdulsamad Rabiu didn’t want to run into the same problem, so he sought a different route by investing in the local production of palm oil.

He focused on local production instead of importing as others did. BUA quickly distinguished itself from the competition and enjoyed rapid growth.

A few years later, he acquired the Nigerian Oil Mills, which was then the largest edible oil processing company in the country. This allowed him to significantly scale up production and grow his market share in the segment.

BUA’s first major breakthrough in business

In 1990, fortune smiled on Abdulsamad Rabiu as the federal government appointed BUA Group as a major contractor for Delta Steel Company.

Analysts described it as Rabiu’s major breakthrough in business which catapulted him into the elite business category.

As part of the contract, BUA supplied raw materials to Delta Steel Company in exchange for finished iron products.

The Group quickly capitalised on this to venture into trading in steel, producing billets, importing iron ore, and constructing multiple rolling mills in Nigeria.

BUA break rivals’ monopoly in the sugar segment

By 2005, BUA Group had grown significantly with annual revenue that ran into billions. The Group also established the BUA Flour Mills factory to get a foothold in the lucrative bakery market.

In 2008, Abdulsamad Rabiu commissioned the BUA’s second largest sugar refinery in Sub-Saharan Africa, breaking rival Dangote’s near-monopoly in the segment.

Rabiu has been described as a quiet and easygoing person but dogged and a goal-getter.

“I am quiet but I am very stubborn. If I want something I go for it and if I don’t want it, no matter how much I’m pushed, I don’t do it. If somebody is stubborn, sometimes it is seen as arrogant but I don’t think I am an arrogant person,” he told Forbes.

Investment in cement
In 2007, when the federal government introduced backward integration to check the incessant rise in the price of cement, Abdulsamad Rabiu saw an opportunity and quickly jumped at it.

Cement was unlike any other business he had done because the industry was monopolised and tightly controlled by a few big players, primarily Dangote Cement.

There were only three or four cement plants in Nigeria, producing about 4 million MT per annum against what the country needed – almost 10 million MT.

So the Federal Government selected six new companies to be able to import cement, and BUA was one.

However, there was a significant problem because the big four players were making so much money they didn’t want anyone to crash their party.

So they were not happy with the government’s decision. Plus, the entry barrier was so high that all the new cement licensees had to secure terminals at the port.

“I knew that we had tough competition from the people who had factories, and they were not happy with the government giving us the license because they were making so much money they did not want anyone to come into the business. So they were doing everything to frustrate the process,” he said.

Another problem was that BUA Group didn’t have the funds to secure a terminal at the port. But Rabiu was not going to give up that easily.

So instead of building a terminal, “I came up with the idea of the floating terminal. It is like a factory on a vessel. It is a big ship with a terminal in the ship. It was an idea I read about a long time ago and I decided to be innovative, he explained.

Fast forward to 2022, BUA is the second-largest cement manufacturer in Nigeria, only behind Dangote.

In the last six years, the Group has commissioned a total of four plants – two in Edo State and two in Sokoto State, taking the combined production capacity of BUA Cement to 11 milion tonnes.

His massive investment in cement and sugar is why he rose to become the second richest man in Nigeria.

During the recent commissioning of the Sokoto cement plant, Abdulsamad Rabiu gave a peep into the company’s future investment plans.

He revealed that in 2023, the company would complete two new plants in Edo State and Sokoto State, both of which have 3 million metric tonnes. This will bring BUA Cement’s total production capacity to 17 million metric tonnes.

Rabiu explained that his goal is to drive down cement prices, making it more affordable and accessible to Nigerian consumers.

Abdulsamad Rabiu is not just good at making money; he is also a respected philanthropist.

He has donated a 7000-square-meter pediatric ward to Aminu Kano Teaching Hospital.

And during the COVID-19 lockdown, he donated N1 billion in cash to medical equipment and supplies to help the government fight the pandemic.

Source: Business Elites Africa

Email: elora.akpotosevbe@yahoo.com