West African giant Nigeria’s construction and cement sectors are showing resilience in the face of the Covid-19 pandemic. Although the Nigerian economy has, like many other African countries, struggled to find its feet after the Coronavirus, the cement market in West Africa has provided exceptional opportunities for growth.
While other countries have not shaken the Covid-19 hangover yet, Nigerian cement companies have reported healthy profits. Listed Nigerian cement giants BUA Cement and Dangote Cement has reported a substantial uptick in sales in quarter one of 2020, while Dangote has started exporting cement again.
BUA Cement reported a 12.7% year on year increase in revenue to NGN101.3-billion (USD261.07-million). The company has a total cement capacity of 8Mta. It operates several cement plants around the country and is in the process of commissioning a 3Mta greenfield plant in Sokoto state, which is scheduled to come on-line in 2021.
According to the online journal International Cement Review, BUA’s
revenue rise was well ahead of rival Dangote Cement’s two percent revenue growth. However, Dangote sold a staggering 7.38Mt of cement in Nigeria in the first quarter of 2020, which was up 1.8%.
LafargeAfrica, another primary cement producer in Nigeria, reached net sales of 120 540t in the second quarter of 2020, the latter being a rise of 2.3% on the 117 885t of cement the company sold in the same period last year. According to Khaled El Dokani, country CEO of Lafarge Africa, the second quarter 2020 results remained resilient with net sales of -5.1% (56,845t) and recurring EBIT +29.7%, compared to the year before, despite the impact of the COVID-19 pandemic.
According to the International Cement Review total domestic sales by companies in Nigeria’s cement and clinker manufacturers reached 7.41Mt in the quarter one of 2020, and that the medium- to long-term prospects in Nigeria remain positive.
Despite the positive results, Covid-19 did have a significant impact on the Nigerian cement industry, especially during the hard lockdowns in Lagos state, Abuja (FCT) and Ogun state in April 2020. Dangote’s April deliveries were 28% lower than the volumes dispatched during the same period last year.
The International Cement Review states that 27 800t of clinker was exported by Dangote from Apapa Port, Lagos to Senegal in June 2020. The emergence of Dangote as a cement and clinker exporter is expected to increase the company’s foreign exchange earnings as it expands the business further into the markets of Côte d’Ivoire, Cameroon and Ghana.
“Our target is to export at least 4Mta of clinker to various parts of Africa.” says Alhaji Sada Ladan-Baki, Dangote Group executive director. The company formally launched the Dangote Cement Export Terminal recently. “We will soon launch an export terminal in Onne as well, to enable the company to export clinker, initially to its grinding facility in Cameroon and then to new grinding plants the company is building across West Africa,” says Ladan-Baki.