BUA, Dangote Cement lead as listed manufacturers’ power bills hit N820.7 billion

Spread the word Dangote Cement and BUA Cement accounted for most of the N820.7 billion spent on fuel and power by NGX-listed industrial goods companies in the first nine months of 2026, as rising energy costs squeezed manufacturers’ margins.

The unaudited financial statements for the period ended September 30 showed a 6.3 per cent increase from N771.9 billion recorded in the corresponding period of 2025.

Dangote Cement Plc and BUA Cement Plc accounted for the bulk of the spending, with their combined energy costs rising to N797.1 billion from N747.2 billion, representing a 6.7 per cent increase.

Dangote Cement, the largest contributor, reported fuel and power expenses of N580.5 billion, up two per cent from N569 billion in the same period last year.

BUA Cement recorded a sharper increase, with energy costs rising 21.5 per cent to N216.6 billion from N178.2 billion.

Other listed industrial goods companies recorded mixed results. Beta Glass Plc reduced its energy expenditure by 5.3 per cent to N23.2 billion from N24.5 billion, while Chemical and Allied Products (CAP) Plc reported a 20.4 per cent decline to N30.3 billion from N38 billion.

Austin LAZ and Co Plc, however, recorded an increase from N50,000 in the first nine months of 2025 to approximately N10.9 million in 2026.

HBM Nigeria Plc, formerly Lafarge Africa, reported production variable costs of N226.3 billion but did not separately disclose its energy expenses.

Economists and investment analysts warned that rising fuel and electricity costs were adding to manufacturers’ production expenses, weakening profit margins and potentially limiting investment in business expansion.

Speaking on the development, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr Muda Yusuf, said Nigeria’s power situation had deteriorated since February 2026.

He attributed part of the increase in energy expenses to the Middle East conflict involving the United States and Iran, which he said had pushed up diesel and gas prices.

Yusuf said energy-intensive industries were particularly exposed because of their heavy reliance on these fuels, adding that Nigeria had made limited progress in improving grid electricity supply.

Similarly, investment strategist and Head of Research at GTI Securities Limited, Abiodun Ogunniyi, said higher energy costs increased production expenses, squeezed margins and reduced free cash flow, potentially constraining manufacturers’ capacity expansion plans.

He, however, cautioned that increased energy expenditure did not automatically translate into lower profitability, as companies could offset some of the pressure through operational efficiency, economies of scale and higher selling prices.

Major manufacturers have increasingly invested in captive power generation to minimise production disruptions caused by unreliable grid supply.

Dangote Cement has at least 345 megawatts of captive capacity across its four Nigerian plants, while BUA Cement operates an estimated 240MW to 280MW. HBM Nigeria has at least 200MW.

The trend also poses challenges for electricity distribution companies, as large industrial consumers account for a significant share of their valuable customers.

Persistent gas supply disruptions, mounting sector debts, foreign exchange pressures and infrastructure challenges have further undermined electricity generation, forcing manufacturers to spend more to keep factories running.