Meet Abdulsamad Rabiu, Africa’s newest billionaire •Ranks 23rd on Forbes new 2013 list of Africa’s 50 Richest
SEYI GESINDE reflects on the recent Forbes Magazine’s ranking of another Nigerian, Mr Abdulsamad Rabiu, among Africa’s billionaires, with $1.2 billion networth.
A Nigerian businessman, Abdulsamad Rabiu, the Chief Executive Officer (CEO) of BUA Group, was recently named by Forbes magazine as the newest African billionaire, sitting atop a privately-owned conglomerate with annual revenues estimated at $1.2 billion.
Ranked 23rd on Forbes new 2013 list of Africa’s 50 Richest, the magazine said apart from Rabiu’s chain of investments in Nigeria, his ambition is to invest more than $500 million in Nigeria’s economy in the next few years.
According to Forbes’ estimate, after calculating Rabiu’s worth, the magazine said his “stake in his commodities and cement empire, plus his real estate holdings in South Africa and London, are worth $1.2 billion, up from $670 million a year ago, primarily due to better information on Rabiu’s holdings and the revenue of his companies.”
The 53-year-old Abdulsamad Rabiu, son of a popular businessman, Isyaku Rabiu, who was born in Kano State, northwest Nigeria, according to Forbes, “made a fortune in trade and industry in the decades after Nigeria’s independence from the UK in 1960.
An economics graduate from Capital University in Columbus, Ohio, United States, young Rabiu, on returning to the country after his varsity education, barely 24 years old, with little business experience, decided to lead his father’s business.
He took up this challenge because of the precarious state of his father’s business at that time, consequent upon the military coup of 1983, which led to the arrest of the then President Shehu Shagari and many of his close associates, which included Rabiu’s father.
“It was very difficult. When we started, our dad was not there. There was this huge vacuum because of his personality. He grew the business, he did everything, everybody reported to him, and then he wasn’t there anymore. So at a very tender age, I was saddled with so many things. I had to take a lot of important decisions, and don’t forget that this happened suddenly.
“At the time, there were three ships being discharged, rice and sugar ships. The government agencies tried to seize the goods, so we were discharging. They were taking. We were taking back. It was a big, big issue.
“The biggest challenge was that there were restrictions on confirming letters of credit because of the coup. Then there was the issue of the planes. There were two private jets and we didn’t know what to do with them. We couldn’t fly them. They actually grounded the jets. We were able to get the big one out and we decided we didn’t need it. I just got rid of it.”
Five years later, precisely 1988, Rabiu set up his own business, BUA International, with his father’s blessing and began importing rice, sugar and edible oils, as well as iron and steel rods.
“His big break came in 1990, when a friend informed him of an opportunity with a government-owned steel company,” Forbes said.
According to Forbes, “production at the Delta Steel Company had been beggared by the Nigerian government’s decision to reduce grants. The company was considering approaching private business to finance the procurement of raw materials and Rabiu saw the promise.
“The deal needed approval from the government. After approaching the minister of steel, who hailed from Rabiu’s home state, he was asked to finance the project,” Forbes said.
“We were able to get the business, which was worth almost $20 million at the time, but the idea was that we were importing their raw materials to the tune of 25,000 to 30,000 tons per month, and instead of them paying us back in cash, they gave us the processed products. We didn’t want to collect money because at the time you would sometimes never get it,” Rabiu said.
“The payment method was favourable for Rabiu and his company because the price of the products was government controlled, Forbes said, quoting Rabiu as saying: “I think it was around $6.30 from the company, but around $90 in the open market. So it was quite a good opportunity for us and we made quite a bit of money.”
In 1992, Rabiu invested the huge profits he made from the steel venture in Tropic Commercial Bank, becoming the chairman of the bank after buying a majority shareholding.
“In 1995, BUA acquired Nigeria Oil Mills, a peanut processing company in Kano, for more than $20 million. The previous owners had offered BUA the business based on its status as a player in the edible oils business.
“Two years later, BUA Flour Mills’ first factory was established in Lagos. The Kano flour factory was launched in 1998. Thereafter, BUA set up its sugar refinery in Lagos. The 2,000 million tons per day capacity plant is the second largest sugar refinery in West Africa, after the Dangote Sugar refinery, which produces an estimated 2,400 MT per day,” Forbes said.tweet