ABUJA- Nigeria's third biggest cement firm BUA Cement plans to sell a second tranche of bonds under its 200 billion naira programme to finance expansion, its chief executive said on Thursday.
Yusuf Binji said BUA issued a first tranche of 115 billion naira worth of bonds in 2020. He did not give a time for the future sale and said the amount of the issue would depend on its funding needs.
The bond plan comes after MTN Nigeria, local unit of South Africa's telecoms group MTN on Thursday said it has issued a 110 billion naira bond.
Yields in Nigeria are at historic lows after the central bank cut rates twice last year to lower borrowing costs for the government, creating opportunities for firms to sell debt at more attractive rates.
BUA plans to expand capacity to 20 million tonnes from 11 million with the addition of new lines across three mostly northern states in Nigeria.
The cement firm said it will commission a 3 million tonne production line by the end of this year to add to its existing two million tonne plant in Nigeria's northwestern state of Sokoto.
The company is also targeting exports especially with the start of the Africa free trade area.
"We only export our excess capacity if the Nigerian market is not able to take up what we are producing," Binji told an analyst call.
"Demand has been extremely strong in the last one year ... we will resume when the opportunity arises," he said, adding exports were below 1% of production.
(Reporting by Chijioke Ohuocha; Editing by Alex Richardson, Alexandra Hudson) ((firstname.lastname@example.org; +234 703 4180 621; Reuters Messaging: email@example.com))