Holcim, a Swiss cement and construction materials company, has decided to leave Nigeria after about 65 years in the market. They announced that they will sell their nearly 83.8 percent share in Lafarge Africa to China's Huaxin Cement, with the deal worth around $1 billion.
Holcim, the Swiss manufacturer of cement and building materials, has declared its decision to withdraw from Nigeria after 65 years, as part of its strategy to optimize operations and concentrate on regions with high growth potential and sustainability. The firm intends to divest its 83.8 percent ownership in Lafarge Africa Plc to China's Huaxin Cement for a sum of $1 billion.
Nigeria has really stepped up its local cement production lately, with major companies like Dangote Group and BUA Cement taking the lead in the industry. The deal in question is expected to wrap up in 2025, but it’s still waiting on the green light from Nigerian regulators, according to the global building materials firm.
Reports indicate that this move is part of Holcim's plan to streamline its portfolio and focus on markets with high growth potential, which also includes the planned spin-off of its North American operations, set to go public in the U.S. in the first half of 2025.
Lafarge Africa Plc, previously known as West African Portland Cement Company (WAPCO), commenced its operations in Nigeria in 1959 as a joint venture involving the Western regional government, Blue Circle, and the United Africa Company of Nigeria.
The company activated its first kiln on December 3, 1960, at the Ewekoro factory in Ogun State and subsequently became listed on the Nigerian Stock Exchange (NSE) in 1979.
Lafarge Africa has established itself as a prominent building materials provider in Sub-Saharan Africa and operates as a subsidiary of Holcim, a global leader in the industry.
In Nigeria, Lafarge Africa operates several key facilities, including the Mfamosing plant situated in Cross River State. This plant was initially established in 2002 under the name United Cement Company Nigeria (UNICEM) Limited and currently boasts an annual production capacity of 5 million tons.
Additionally, the Ashaka Cement plant, located in the North-east region, was incorporated in August 1974 and commenced production in 1979. Its estimated annual production capacity is around 1 million metric tons. Furthermore, in 2019, Lafarge launched a new mortar plant at its Sagamu factory.
Holcim has indicated a strategic shift towards sustainable growth within its core markets, focusing on higher-margin products and strategic infrastructure investments. The company is also committed to enhancing its environmental performance, as evidenced by its investment in Sublime Systems, a US-based tech start-up dedicated to developing low-carbon cement solutions.
In October, Holcim reported a recurring operating profit of 1.67 billion Swiss francs ($1.90 billion) for the third quarter, slightly exceeding expectations.
The sale of Holcim's 83.8 percent stake in Lafarge Africa plc reflects an equity valuation of $1 billion on a 100 percent basis, according to the company based in Zug, Switzerland.
Holcim, which produces roofing and other construction materials, aims to capitalize on the increasing demand in the housing market, driven by a shortage of single-family homes and regulatory demands for more energy-efficient buildings.
This planned divestiture in Nigeria follows the 2021 sale of a majority stake in its Zambian operations to Huaxin Cement.
Holcim has entered into an agreement with Huaxin Cement Ltd to divest its entire 83.81 percent shareholding in Lafarge Africa PLC, valuing the equity at $1 billion on a 100 percent basis.
The transaction is anticipated to finalize in 2025, pending standard and regulatory approvals, according to a brief statement reviewed by THISDAY.
Holcim stands as a global frontrunner in innovative and sustainable building solutions, reporting net sales of CHF 27.0 billion in 2023 and employing approximately 63,448 individuals worldwide.
In Nigeria, Lafarge Africa has recently intensified its commitment to green growth, positioning itself as a leader in innovative and sustainable building solutions. The company is actively engaged in decarbonizing the construction process throughout its lifecycle, aligning with Holcim’s mission of ‘Building Progress for People and the Planet,’ as stated on its website.
Lafarge Africa Plc operates four plants across Nigeria, located in Sagamu and Ewekoro in Ogun State in the South-West, Ashaka in Gombe State in the North-East, and Mfamosing in Cross River State in the South-South. The company currently boasts an installed cement production capacity of approximately 10.5 million tons per annum.
In addition to its cement operations in Sagamu and Ewekoro, which have a combined production capacity of 4.5 million metric tons per annum (MTPA), Lafarge Africa also operates geocycle and mortar plants in the South-West region.
The company’s product range includes five brands: Elephant Cement, Supaset, Powermax, Etex, and SRC, a sulphate-resistant cement designed for coastal construction.
Its mortar offerings feature TectorPlast, suitable for applications such as floor screed, floor tiling, wall screed, and wall tiling, among others.
In contrast, Huaxin, the new investor, possesses a distinguished history spanning 116 years of operations, firmly establishing its position as a prominent entity within both the Chinese and global cement industries.
Over the past two decades, Huaxin Cement has consistently achieved an impressive average annual compound growth rate of 25 percent, solidifying its status as one of the top ten manufacturing enterprises in China.
Huaxin Cement operates an extensive network of over 300 branches and subsidiaries, both domestically and internationally, encompassing diverse sectors such as cement, concrete, and environmental protection.