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How mogul Abdulsamad Rabiu has become a billionaire again

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Nigeria’s business mogul and third richest man, who cemented his return to Forbes’ African Billionaires List this year since dropping off it in 2015, says he owes his $1.6 billion net worth to being a disruptor – and to being stubborn.


The inside of Abdulsamad Rabiu’s office, on the corner of Churchgate Street, in Victoria Island’s commercial district in the heart of Lagos that is notorious for chaotic, rambunctious traffic, is marked by a serious lack of clutter.

The expansive room is tastefully decorated in cream and black hues. Rabiu’s desk is organized in a manner that seems as though everything is exactly where it should be; completely spotless and devoid of any distractions that will hinder the 58-year-old founder of BUA Group from managing his vast empire, a conglomerate spread across southern and northern Nigeria.

A firm believer in strategy, the cement and sugar tycoon boosted his fortunes by a whopping $650 million this year when he merged Kalambaina Cement, a subsidiary company of his BUA Cement, with the publicly traded Cement Company of Northern Nigeria (CCNN), where he was a controlling shareholder.

That calculated move has made him the third richest man in Africa’s largest economy, with a staggering net worth of $1.6 billion, according to the latest Forbes African Billionaires List, which he dropped out of.

“Nigerian cement mogul Abdulsamad Rabiu, who runs and owns the BUA Group, returns to the list for the first time since 2015. He merged his Kalambaina Cement firm into publicly-traded Cement Company of Northern Nigeria, which he controlled, in late 2018. Rabiu now owns 97% of the list entity,” Forbes reported.

READ MORE | Businesses Of The Future: 20 New Wealth Creators On The African Continent

He says his fall from the coveted list was due to the devaluation of the Naira, which meant that the exchange rate went from N190 against the  dollar, to N300.

“That was the main reason I dropped off the rich list. Also, most of our other assets were not being considered because once you are not listed, it becomes more challenging to get an accurate valuation.

“Our assets, in the cement industry alone, are worth more than $2 billion, but that is because Obu Cement [Plant], which is our biggest cement plant, is not listed,” Rabiu says.

 His return to the billionaire boys’ club is due to five years of strategic expansion and a much more stable Nigerian economy. However, it is about more than just numbers for Rabiu.

“It is a good feeling to be on the rich list, the most important thing is not about how much money you make, but the impact you make. Touching people’s lives is more important because money is a number. What you need in terms of your day-to-day is not that much.”

One of the secret ingredients to his tremendous success is that Rabiu is a firm believer in delegation.

His phone purrs only occasionally, but this is also because his plants run with clockwork precision in an environment that is chaotic at the best of times.

He has a calm and soft-spoken demeanour, a trait which is, quite frankly, unconventional for someone who has fought his way through hell and high water in business.

“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’s seen as arrogant but I don’t think I am an arrogant person,” Rabiu says.

 It is also immediately clear that he is not a man who rushes into things. He would rather move methodically, with clarity and precision, a skill he picked up in the early days learning the ropes from his industrialist father. Case in point is how he built his empire brick-by-brick from the early days as an importer.

“In 1988, I started my own business and founded BUA International Ltd. At the time, the in-thing was importation of rice, sugar, fertilizer, agriculture etc. So the challenge was that, if there was scarcity of any product, everybody would now go and import the same thing. This pushes the price up and everybody will say the price of fertilizer has doubled, so everyone would now go and import fertilizer and within a short time, the product would now come down to half price and everyone would lose money,” Rabiu says.

He decided to break the mould and instead adopted a value-added approach. He focused on bringing in raw materials to process it locally.

“We started with oil in Kano. We were processing crude palm oil to refine it. We were also getting peanuts from Kano and then crushing and processing, and that was a good business at the time because it was adding value and people were not used to adding value to anything at all. They were importing everything.”

In 2000, BUA acquired Nigeria Oil Mills, which was a peanut processing company in Kano. In 2005, he set up the BUA Flour Mills factory in Lagos. Rabiu saw very early on that he had to be distinctive in a sea of importers who simply followed the trend.

It is this measured philosophy of value that has allowed BUA Group to innovate and expand capacity to about 2 million tons of cement per annum with its new merger. Rabiu says with the consolidation, BUA Group has a market valuation of about $800 million. A far cry from the company’s humble beginnings.

Returning to Kano as a newly-minted graduate with a degree in economics from Capital University in Columbus, Ohio, in the United States, a lot had changed while Rabiu was away.

 The country was being run by a military leader and there were severe shortages in foreign exchange which made the business of importation extremely difficult. Following his new ethos of adding value to the production line, Rabiu set his eyes on the sugar business by establishing the 2,000 metric ton (MT) per day capacity plant in Lagos which is the second largest refinery in West Africa, after the Dangote Sugar Refinery.

But the BUA story isn’t without its share of trials and tribulations. The fight began in the early years of business, when the Nigerian government introduced the backward integration policy in the sugar business.

“This is where you were allowed to import raw sugar and process into refined sugar and you must have a sugar refinery facility. So, if you have the facility for a sugar refinery, you were able to import sugar and pay a duty of 5% to 10%, while everybody else was importing refined sugar and paying 50% duty,” Rabiu says.

 At the time, it was only the Dangote Group that had the refinery facility, so Rabiu decided the lack of saturation made sugar a viable business to go into.

The government’s backward integration policy is a well-known competitive strategy which allows an organization to control more of its supply chain in order to bring down the costs.

 It means that a company is allowed to purchase or internally produce segments of its supply chain. This is done to ensure the supply, along with securing bargaining, leverage on vendors.

To take advantage of backward integration, a company needed to have its sugar refinery at the ports in order to import raw materials in bulk, which made having a terminal at the port a prerequisite.

“At that time, everything was owned by [the] Nigerian Ports Authority (NPA), so you had to go and lease land from them, together with the storage. This was a huge capital investment, and to make matters worse, there was no land at the time because everything was taken.”

 Luckily, Rabiu was able to find a company that had a facility that was not being utilized.

“We paid a lot of money to that company, got all the designs, bought all the equipment, we were about to start the company, then the lease was revoked and we could not go there. This was during the [Olusegun] Obasanjo regime. Most of our money had been spent on getting the land and equipment and they revoked the lease and gave it to somebody else. It took us a year and almost $50 million in cost before we were able to start all over again,” he says.

Incidentally, that site was given to Rabiu by his father. Once they took off, the business worked out so well that they were able to recoup their money within a very short period of time. The sugar venture was a cash cow.

The company was able to reap huge margins due to the difference in duties for imports of raw sugar, and, yet again, Rabiu found validation in his strategic approach to business.

 Even in those early days, his penchant for success was apparent. The sugar refinery is still operating at capacity and Rabiu is in the process of commissioning another refinery at Port Harcourt in Nigeria. They say the apple does not fall far from the tree, and this is true for Rabiu.

His father, Isyaku Rabiu, was a renowned businessman, who also made his fortune in trade decades after Nigeria’s independence.

His wealth grew significantly until the 1983 coup which toppled the government and led to the arrests of President Shehu Shagari and his close allies, including Isyaku, leaving his business empire in a precarious state.

But where his father lost his footing in trade, Rabiu was destined to find his in cement. Opportunity came knocking in 2007 when the price of cement was so high that the Nigerian government decided to introduce yet another backward integration in the cement industry.

 The idea was simple. You could only import cement into Nigeria, if you had a cement factory. At the time, there were only two multinational organizations in the country with the capacity to build their own cement plant.

Local companies like the Dangote Group and Flour Mills of Nigeria were the only two other companies that had signed contracts to build cement factories in Nigeria.

“Nobody else was allowed. So President [Umaru Musa] Yar’Adua was alarmed that the prices of cement was going up every day and he called for a meeting when the price was $300 per ton. He said it was too much, so what do we do? He was briefed on the reason nobody else could bring cement into Nigeria and told that there was a policy in place that only those building factories could import cement into Nigeria, and we did not have enough capacity in terms of manufacturing to meet Nigerian demand.”

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

The president ruled that the existing backward integration policy could not be continued and established a committee who came up with the idea that the policy should allow companies outside manufacturers who were building plants, in order to bring prices down.

“So they selected six companies to be able to import cement and we were chosen as one of the six companies,” Rabiu says.

But there was a big challenge.

“How do you import a million tons in a year or even 100,000 tons a month in bags? That will be like five or six cargos a month, to be able to take the bags out and transport them all over the country, so nobody could actually do it.

 “The other guys had terminals, which means they were discharging the cement in bulk and taking it to their warehouses and bagging them in the warehouses and they had been in the business for a long time,” Rabiu says.

In order to reap the rewards in the lucrative cement industry, all the new six companies who had been granted licenses needed to secure terminals at the port. But the barriers to entry were significantly high.

Rabiu decided on a disruptive approach. “So I now came up with the idea of the floating terminal. It is like a factory on a vessel, so it moves. 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 approached the only terminal at the time that was free in Greece and agreed on a price.

 Fearing the size of the competition, Rabiu knew he needed to get protection for his business, if he stood a chance of competing favorably in the new venture.

“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 it [the process]. I knew that there would be a problem. So before I bought my vessel, I came to Nigeria and sought an appointment to meet the president who granted me an audience and I explained everything to him.”

Rabiu made an impassioned plea to President Yar’Adua —  he knew he could drive down the price of cement from $300 per bag to $150 if he had his own terminal.

However, building the terminal would take more than a year to complete, during which time cement prices would continue to rise, which would be detrimental to the Nigerian economy.

A floating terminal meant that the timeline of going to market was significantly reduced but more importantly, without the blessing from the president, the other giants in the industry would muscle him out of the game.

Once approval from the president was secured, Rabiu purchased his floating terminal and was ready to reap in the millions of dollars awaiting him in bags of cement.

 It was logistically impossible for Rabiu to set up shop in Lagos. These circumstances pushed him to explore other means through which he could realize his goal. He approached Port Harcourt and this move proved to be fortuitous for him because all the eastern markets were coming to the port as there was nothing in the east.

However, not everything was ideal as he was allowed only one week in a month after which point he had to leave the port, making it difficult to offload his cement.

Rabiu was faced with more hurdles but eventually, was forced to consult the highest authority in the country to explain the barriers he encountered. 

It was only after an order from the president that the impediments to Rabiu’s business stopped and, with that, came the growth of the BUA Group, to become one of the leading conglomerates in West Africa. As the monopolists gradually loosened their grips on the cement industry, Rabiu used the opportunity to build capacity. The company has five plants now.

“That experience strengthened my resolve because it was not easy. I never thought I was going to quit. If you don’t fight back or if you are weak, you will never survive. You have to understand that this is not personal but business and you have to keep fighting. When they see that you are fighting and not giving up then they let go because most of these things are illegal anyway,” says Rabiu.

BUA Group steadily expanded to cover new ground. With the new merger, Rabiu has seen an opportunity outside Nigeria’s borders. The demand between Sokoto and Niger through to Burkina Faso is estimated to be about 4 million MT of cement per annum.

Coupled with the fact that these countries are landlocked, there is a need to import all their clinker, the raw material needed for making cement.

His new merger with CCNN will create the second largest cement company on the Nigerian bourse after African mammoth, Dangote Cement.

Rabiu believes in Nigeria’s ability to produce its own products without relying on imports from other countries and in so doing, create tens of thousands of jobs for the Nigerian economy.

 As the avenues to expand in Nigeria get limited, BUA Group has consistently sought to broaden its reach to new territories.

The fighting days are long gone and BUA under the aegis of its bold leader is ready to conquer new turf in Africa.

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Billionaires

Zuckerberg, Ballmer Gain Combined $5.1 Billion After Strong Microsoft, Facebook Earnings

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The net worths of big tech’s blue chip billionaires jumped Thursday as soon as stock markets opened. The gains came after both Facebook and Microsoft reported better than expected revenue growth on Wednesday after the market closed. Altogether the value of Facebook and Microsoft shares held by 27 billionaires rose $7.4 billion, thanks to the strong earnings reports.

The biggest gainer by far was Facebook CEO Mark Zuckerberg, the largest individual shareholder in the social network he founded in a Harvard dorm room 15 years ago. Zuckerberg’s fortune rose $3.9 billion on Thursday to $71.8 billion. 

Despite concerns over its platforms’ data security and privacy, Facebook’s quarterly revenue exceeded $15 billion, a 26% year-over-year increase. The company estimates that 2.1 billion people use one of its services every day. Its share price on Thursday rose 5.8% to $193.26.

Facebook also disclosed a $3 billion to $5 billion legal charge from the FTC, which it claims dragged its diluted earnings-per-share down 55%. The penalty seems to be tied to the Cambridge Analytica scandal, which sparked a national conversation about the social media giant’s usage of user data. But investors seemed to shrug off that news. 

“We’re making significant investments in safety and security while continuing to grow our community and our business. This quarter once again, shows that we can do both,” said Sheryl Sandberg, Facebook’s billionaire chief operating officer. The 22 billionaire Facebook shareholders’ stakes are collectively worth $5.7 billion more as of 4:30 pm ET Thursday compared to the market close on Wednesday.

The day’s second-biggest gainer was Steve Ballmer, the former Microsoft CEO who still holds more shares in the software giant than any other individual. His fortune jumped $1.2 billion, to $48.2 billion.

Microsoft’s earnings shattered expectations, with diluted earnings per share up 20%. Its quarterly revenue climbed 14% to $30.6 billion, largely on the back of its commercial cloud business, which alone has jumped 41% year-over-year.

Ballmer joined Microsoft in 1980 as its 30th employee and served as CEO from 2000 to 2014. He bought the NBA’s Los Angeles Clippers from fellow billionaire Donald Sterling in 2014 for $2 billion. Ballmer has put $2 billion into a donor-advised fund focused on addressing poverty in America.

He’s not Microsoft’s only big winner today. Cofounder and former CEO Bill Gates sold or gave away most of his shares years ago but still enjoyed a $400 million boost. According to Forbes’ real time wealth tracker, he’s now worth $101 billion, one of just two centibillionaires alive, beaten only by Jeff Bezos. (Bezos’s net worth could skyrocket during trading Friday in the wake of a strong quarterly earnings report from Amazon today.)

Overall, the nine members of the Forbes World Billionaires list who have significant stakes in Microsoft—a verifiable “who’s who” of investors that include Gates, Ballmer, Reed HastingsCharles SimonyiPenny PritzkerMark StevensHerbie WertheimRobert Duggan and Reid Hoffman—saw their fortunes rise a combined $1.7 billion.

Not every billionaire won after Wednesday earnings. Billionaire Elon Musklost over $650 million of his net worth, with Tesla facing a bigger-than-expected $702 million loss.

“This was one of the most complicated quarters I can think of in the history of the company,” Zachary Kirkhorn, Tesla’s new CFO, said on a conference call with analysts.

-Carter Coudriet; Forbes Staff

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In Defense Of Kylie Jenner: Are Any Of The World’s Billionaires Entirely Self-Made?

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Last month, after Forbes named Kylie Jenner the world’s youngest self-made billionaire, we unintentionally set off a heated debate on social media about the meaning of the word “self-made.”

The idea that a 21-year-old who grew up on a reality TV show (Keeping Up With the Kardashians), whose sister is Kim Kardashian, and whose rich and famous parents are Kris and Caitlyn Jenner could be considered self-made, sparked a very public backlash.

The debate was renewed once again on March 31 after the New York Times published a story in which Kylie admitted to having some help building her business. “I can’t say I’ve done it by myself,” the beauty mogul told the Times. “If they’re just talking finances, technically, yes, I don’t have any inherited money. But I have had a lot of help and a huge platform.”

READ MORE | At 21, Kylie Jenner Becomes The Youngest Self-Made Billionaire Ever

Well, yes, that’s exactly what we mean at Forbes when we say that Kylie—and 1,449 other billionaires—are “self-made.” And that’s perhaps the nub of the disagreement. At Forbes we’ve been using the term to describe the origin of someone’s fortune, rather than whether a billionaire got help to build a hugely successful company or not.

 Forbeshas been tracking the fortunes of America’s richest for more than 35 years and we’ve used three classifications for how people made their fortunes: self-made, inherited and inherited and growing; the latter category was reserved for people like Donald Trump, who built on his father’s real estate empire.

 Forbeshas been tracking the fortunes of America’s richest for more than 35 years and we’ve used three classifications for how people made their fortunes: self-made, inherited and inherited and growing; the latter category was reserved for people like Donald Trump, who built on his father’s real estate empire.

What many object to when Forbes calls Kylie self-made is that (1) she had lots of help (from people like her mom, Kris Jenner) building the company that turned her into a billionaire, and (2) she started out rich and famous. Both of those assertions are true. But Mark Zuckerberg, whom Forbes also classifies as self-made, didn’t build Facebook by himself and he started out well-off, though not as rich and not nearly as famous as Kylie. (Zuckerberg’s father is a dentist, his mother a psychologist).

READ MORE | The 10 Most Notable New Billionaires Of 2019

Plus there are seven other Facebook billionaires who, one could argue, rode alongside Zuckerberg in building the massive social network, including cofounder Dustin Moskovitz, Zuckeberg’s former roommate; cofounder Eduardo Saverin, Zuckerberg’s former classmate; Sean Parker, the social network’s first president; Jim Breyer and Peter Thiel, its early investors; and Sheryl Sandberg, Facebook’s chief operating officer since 2008, four years after the company was founded. Forbesclassifies all of these billionaires as self-made—none of them inherited their fortunes. None of them built Facebook alone.

Five years ago, Forbes dug deeper into one defining characteristic of billionaires: How far did they climb to make their way to the top? That year, for the first time, we gave each member of The Forbes 400 list of richest Americans a self-made score on a scale from 1 to 10: A 1 means the fortune was completely inherited; a 10 is for a Horatio Alger-esque journey from the depths of poverty. At the most basic level, the scores denote who inherited some or all of their fortune (scores 1 through 5) and those who truly made it on their own (6 through 10).

We have continued to apply this self-made score to all American billionaires (and also now to self-made women). In Kylie’s case, we gave her a 7 out of 10, acknowledging that she had plenty of advantages from the start.

Donald Trump scores a 4 because he inherited a fortune from his father and then expanded it significantly, while the widow of Steve Jobs, Laurene Powell Jobs, gets a 2 because she inherited a fortune and has a role in managing it, having made investments in media (The Atlantic and Ozy Media) and professional sports (she owns a 20% stake the group behind the NBA’s Washington Wizards and NHL’s Washington Capitals).

READ MORE | More Than A Dozen European Billionaires—Linked To BMW, L’Oréal, Bosch—Have Families With Past Nazi Ties

While few billionaires have had the type of social media platform that Kylie Jenner had when she launched her business—with 120 million Instagram followers—(which we actually think further underscores her entrepreneurial savvy, not the help she got), every single self-made billionaire on Forbes’ list has had help building their fortune, be it from other employees at the company they founded, venture capitalists, mentors, friends or parents.

Steve Ballmer, for instance, had the good fortune to be one of Bill Gates’ classmates at Harvard, which led to a job at Microsoft. He eventually replaced Gates as chief executive, a job he held for 15 years. He is now the 19th-richest person in the world.   

Leon Black, whose father was the CEO of United Brands, got a $75,000 life insurance payout after his father died when he was in business school. He later cofounded private equity giant Apollo Global Management, which made him a billionaire. Hedge fund tycoon Chase Coleman is a descendant of Peter Stuyvesant, the last Dutch governor of New York. Another hedge fund titan, Ken Griffin, started trading in his Harvard dorm room using $265,000, part of which came from his family.

And the nation’s richest real estate developer, Donald Bren, is the son of a real estate investor and Hollywood film producer. Phil Knight, in his autobiography Shoe Dog, spells out how the early days of Nike were a team effort by a core group of incredibly dedicated early employees. Even Oprah Winfrey, who grew up dirt poor and earns a number 10 rank on our self-made score, got help from smart producers and other employees to turn her daytime talk show from an also-ran into a huge hit, as the podcast Making Oprah details.

READ MORE | The World’s Most Generous Billionaires Outside Of The US

So why have people reacted so vehemently to Kylie? Is it that the Kardashians are people everyone loves to hate? Is it that Americans are fed up with the reality TV, social media culture that not only helped make a 21-year-old who posted on Instagram a billionaire but also helped get a president elected? Several people with whom we spoke wondered if it was because she was a woman. Would we have had the same discussions if it was her half-brother Robert who became a billionaire instead of Kylie?

No one will really ever know. But one thing is certain: Kylie Jenner figured out a simple, easy way to turn her family’s fame, her huge Instagram following and her passion for makeup into big, big bucks.

Luisa Kroll; Forbes Staff

Kerry A. Dolan; Forbes Staff

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Jeff Bezos To Give MacKenzie 25% Of His Amazon Stake, Worth Tens Of Billions, In Divorce

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Jeff Bezos, founder and chief executive of Amazon, announced on Thursday that he will transfer roughly 4% of the company’s stock to his wife, MacKenzie, most likely by early July. The couple are in the process of finalizing their divorce.

Those shares are worth more than $35 billion as of 1:30 p.m. Eastern Time on Thursday. That would make MacKenzie the third-richest woman in the world, behind L’Oréal’s Francoise Bettencourt Meyers, who is worth an estimated $52.9 billion, and Walmart’s Alice Walton, who is worth $45 billion. She would rank as the planet’s 26th-richest person, ahead of Nike’s Phil Knight.

Jeff Bezos will remain the world’s richest person, with a net worth above $110 billion, per early Thursday afternoon stock prices. Bill Gates is the world’s second-wealthiest individual, boasting an estimated $99.5 billion fortune.

While still pending, the Bezos divorce settlement will likely be the largest in world history. Other divorces of the ultrarich include Steve and Elaine Wynn (she received an estimated $850 million settlement), as well as Bill and Susan Gross (she received a $1.3 billion settlement).

In a statement posted to his Twitter account, Jeff Bezos said, “In all our work together, MacKenzie’s abilities have been on full display. She has been an extraordinary partner, ally, and mother.”

MacKenzie posted a tweet of her own, saying, “Grateful to have finished the process of dissolving my marriage with Jeff from each other. … Happy to be giving him all my interests in the Washington Post and Blue Origin, and 75% of our Amazon stock plus voting control of my shares to support his continued contributions with the teams of these incredible companies.”

The couple filed a petition for divorce on April 4, and they expect an official decree to be issued in early July, they said in an SEC filing that outlined the transfer of shares. The filing noted that Jeff Bezos will continue to exercise voting control over MacKenzie’s shares, unless she sells them on the open market or gives them to qualifying nonprofits.

If MacKenzie transfers shares, the recipient of the stock must sign a similar agreement granting Jeff Bezos voting control.

The couple announced their divorce in January, following 25 years of marriage. Their separation stirred a tabloid frenzy, as intimate text messages between Bezos and his romantic partner, Lauren Sanchez, a TV anchor, were leaked by the National Enquirer.

Bezos subsequently published an open letter accusing American Media Inc., which owns the National Inquirer, of extortion and blackmail. AMI has denied wrongdoing.

Bezos also hired a team of investigators to determine who accessed his private messages. His consultant Gavin De Becker ultimately accused the Saudi Arabian government of illicitly gaining access to Bezos’ cellphone. Saudi officials have denied that allegation.

-Angel Au-Yeung; Forbes Staff

-Noah Kirsch; Forbes Staff

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