By Emeka Blast Chinese cement companies, particularly Huaxin Cement, are making significant inroads into Nigeria’s cement industry, challenging established local giants like Dangote Cement and BUA Cement.
Huaxin Cement’s Strategic Entry
In a landmark move, Huaxin Cement acquired an 83.81% stake in Lafarge Africa from Holcim AG for $1 billion. This acquisition positions Huaxin as Nigeria’s third-largest cement producer, with Lafarge’s four plants contributing a combined capacity of 10.35 million metric tonnes annually .
Huaxin’s expansion into Nigeria is part of its broader strategy to offset declining domestic demand in China by tapping into Africa’s growing infrastructure needs. The company has previously acquired cement operations in Zambia, Malawi, and Tanzania, and plans to leverage Lafarge’s existing infrastructure to enhance efficiency and sustainability in production .
Impact on the Nigerian Cement Market
The entry of Huaxin is expected to intensify competition in Nigeria’s cement sector, which has been predominantly controlled by Dangote Cement and BUA Cement. Currently, Dangote holds over 69% of the market share, BUA about 16%, and Lafarge (now under Huaxin) approximately 15.5% .
Analysts anticipate that Huaxin’s presence could lead to price stabilization or reductions in cement costs, which have surged from ₦4,000 to between ₦8,000 and ₦9,500 per 50kg bag over the past year . Additionally, Huaxin’s focus on sustainable and efficient production methods may set new industry standards.
Regulatory and Market Considerations
The Nigerian Senate Committee on Capital Market has expressed intent to scrutinize the Lafarge-Huaxin deal to ensure transparency and protect shareholder interests. Concerns have been raised about foreign dominance in the local cement industry and the implications for competition and pricing .
Future Outlook
Huaxin’s substantial financial resources and global experience position it to be a formidable competitor in Nigeria’s cement industry. Its entry is likely to drive innovation, improve production efficiencies, and potentially lead to more competitive pricing, benefiting consumers and the broader construction sector.
As Huaxin integrates into the Nigerian market, stakeholders will be keenly observing how this development reshapes the dynamics of the cement industry and influences infrastructure development across the country.
Emmanuel Dominic