Two cement companies controlled by Nigerian billionaires Aliko Dangote and Abdul Samad Rabiu spent a combined ₦797.1 billion ($584 million) on energy between January and September 2026, reflecting the high cost of powering industrial operations amid Nigeria’s unreliable electricity supply.
According to their unaudited financial results for the nine months ended September 30, Dangote Cement Plc and BUA Cement Plc recorded a 6.7 per cent increase in their combined energy expenditure from ₦747.2 billion during the corresponding period in 2025.
Despite the increase in spending, energy costs accounted for a smaller proportion of their combined revenue. The companies generated ₦4.86 trillion in revenue, equivalent to $3.56 billion, with energy expenses representing 16.4 per cent of sales, compared with 18.6 per cent a year earlier.
Cement production requires substantial energy, particularly because industrial kilns must reach temperatures of approximately 1,450 degrees Celsius to produce clinker, a major component of cement. Manufacturers rely on natural gas, coal, diesel and privately operated power plants to maintain production amid persistent electricity supply challenges.
DANGOTE CEMENT RECORDS ₦580.5BN ENERGY EXPENDITURE
Dangote Cement, Africa’s largest cement producer, spent ₦580.5 billion ($425 million) on energy across its operations in Nigeria and nine other African countries during the nine-month period.
The expenditure represented a 2 per cent increase from the ₦569 billion recorded in the corresponding period of 2025.
However, energy costs declined as a proportion of revenue, falling from 18 per cent to 15.4 per cent, as the company’s revenue increased by 19.6 per cent to ₦3.77 trillion ($2.77 billion).
In Nigeria, the company’s fuel and electricity expenditure rose by 15.1 per cent to ₦313.9 billion ($230 million). This came as its cement sales volumes increased by 9.4 per cent to 22.1 million tonnes.
The company attributed its ability to manage energy costs partly to a more efficient fuel mix, increased use of alternative fuels and the deployment of compressed natural gas-powered trucks.
Dangote Cement also recorded a 31 per cent increase in nine-month profit, reaching ₦974.8 billion ($714 million). It ended September with more cash than debt.
BUA CEMENT’S ENERGY COSTS RISE BY 21.5 PER CENT
BUA Cement recorded a faster increase in energy expenditure, with costs rising by 21.5 per cent to ₦216.6 billion ($159 million) during the first nine months of 2026.
The increase was accompanied by a 26.5 per cent growth in revenue, which reached ₦1.09 trillion ($796 million).
Consequently, energy expenses accounted for 19.9 per cent of revenue, compared with 20.8 per cent in the previous year.
However, the company’s energy expenditure increased significantly in the third quarter. BUA Cement spent ₦81.3 billion ($60 million) on energy between July and September, representing a 59.8 per cent increase compared with the same period in 2025.
Energy costs consequently rose to 22.7 per cent of quarterly revenue from 18.3 per cent a year earlier.
Despite the higher expenditure, BUA Cement’s nine-month profit increased by 60 per cent to ₦463.1 billion ($339 million).
BUA SECURES PERMIT FOR 12MW POWER PLANT
As part of its efforts to strengthen electricity supply for its operations, BUA Cement secured a permit from the Nigerian Electricity Regulatory Commission (NERC) in the second quarter of 2026 to operate a 12-megawatt captive power plant at its facility in Sokoto State.
The approval was the largest single captive power generation permit issued by the regulator during the first half of the year.
Captive power plants generate electricity for the exclusive use of their owners rather than supplying power to the national grid.
The development reflects a broader shift among Nigerian manufacturers towards independent electricity generation following repeated failures of the national grid.
The grid experienced a complete collapse on January 23 and partial failures on January 27 and October 19, 2026.
According to the Manufacturers Association of Nigeria, its members spent ₦1.34 trillion ($982 million) on alternative energy sources in 2025, representing a 20.7 per cent increase from the ₦1.11 trillion recorded in 2024.
BUA Cement is also expanding its production capacity. In January 2026, the company signed a $240 million agreement with China’s CBMI Construction Company for the development of a sixth production line in Sokoto.
The new facility is expected to have an annual production capacity of three million tonnes and an accompanying power plant. Once completed, it will increase BUA Cement’s total production capacity to 20 million tonnes annually.
DANGOTE AND RABIU’S BUSINESS INTERESTS
Aliko Dangote, 69, is regarded as Africa’s richest person, with an estimated net worth of $55.4 billion, according to Forbes.
He controls approximately 87 per cent of Dangote Cement, largely through Dangote Industries Limited. His business interests also include the $20 billion Dangote Petroleum Refinery near Lagos, which is preparing for a listing on the Nigerian Exchange following an initial public offering that attracted approximately three times the amount sought.
Abdul Samad Rabiu, 66, is the founder of BUA Group, a diversified Nigerian conglomerate with interests in cement, sugar, flour and pasta.
He controls approximately 97.7 per cent of BUA Cement, directly and through BUA Industries Limited. Rabiu also controls BUA Foods Plc, another company listed on the Nigerian Exchange.
The combined ₦797.1 billion energy expenditure by their cement businesses highlights the significant financial burden electricity and fuel costs place on Nigeria’s manufacturing sector, even as both companies continue to expand production and improve profitability.
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