Holcim Exits Nigerian Market After 65 Years, Sells Lafarge Africa to Huaxin Cement for $1bn

After roughly 65 years of operations in Nigeria, Swiss cement and other building materials’ maker, Holcim, on Sunday announced that it was set to leave the country.

The company said in a brief statement that it will exit its Nigerian business through the sale of its almost 84 per cent stake in Lafarge Africa to China’s Huaxin Cement in a deal valued at $1 billion.

Nigeria has in recent years developed huge local capacity in the manufacturing of cement, led by the Dangote Group and BUA Cement among others becoming market leaders in the business segment.

However, the extant transaction is expected to close in 2025, subject to regulatory approvals by the Nigerian authorities, the global building materials manufacturing company in the statement.

THISDAY gathered that the agreement aligns with Holcim’s strategy to streamline its portfolio and focus on high-growth regions, including the coming spin-off of its North American business, likely for US listing in the first half of 2025.

Lafarge Africa Plc, formerly known as West African Portland Cement Company (WAPCO), began operations in Nigeria in 1959 as a joint venture between the Western regional government, Blue Circle, and United Africa Company of Nigeria.

The company’s first kiln (furnace) was lit on December 3, 1960, at the Ewekoro factory in Ogun State and the firm eventually listed on the Nigerian Stock Exchange (NSE) in 1979.

Lafarge Africa has been a leading building materials company in Sub-Saharan Africa and a subsidiary of Holcim, a global leader in building materials.

In Nigeria, THISDAY gathered that Lafarge Africa’s operations include: the Mfamosing plant located in Cross River State, which was originally established in 2002 as United Cement Company Nigeria (UNICEM) Limited. At the last count , it had an annual production capacity of 5 million tons per year.

In addition, there’s the Ashaka Cement plant located in the North-east region, incorporated in August 1974 and which began production in 1979. It has an annual production capacity of 1 million metric tons per year, by some estimates. Besides, Lafarge in 2019 established a new mortar plant in Sagamu factory.

But Holcim said it is now focused on sustainable growth in its core markets, higher-margin products and strategic infrastructure investments. It is also seeking to improve its environmental credentials and in September it took a stake in Sublime Systems, a US tech start-up working on low-carbon cement.

Besides, in October Holcim reported a slightly better than expected recurring operating profit of 1.67 billion Swiss francs ($1.90 billion) for the third quarter.

Specifically, the sale of its 83.8 per cent stake in Lafarge Africa plc implies an equity value of $1 billion on a 100 per cent basis, the Zug, Switzerland-based company said.

Holcim, which makes roofing and other housing products, is trying to tap into surging demand in that market fuelled by a shortage of single-family homes and regulatory pressures for more energy-efficient buildings.

The planned sale in Nigeria follows the disposal in 2021 of a majority stake in its Zambian operations, also to Huaxin Cement.

“Holcim has signed an agreement with Huaxin Cement Ltd to sell its entire 83.81 per cent shareholding in Lafarge Africa PLC, at an equity value of $1 billion on a 100 per cent basis.

“The transaction is expected to close in 2025, subject to customary and regulatory approvals,” the brief statement seen by THISDAY added.

Holcim is a global leader in innovative and sustainable building solutions with net sales of CHF 27.0 billion in 2023 and has about 63,448 employees globally.

In Nigeria, Lafarge Africa has recently accelerated green growth to become the global leader in innovative and sustainable building solutions and is at the forefront of decarbonising building across its lifecycle, in line with Holcim’s purpose of ‘Building Progress for People and the Planet’, the firm said in its website.

With four plants in Nigeria spread across Sagamu and Ewekoro, Ogun State in the South-West; Ashaka, Gombe State in the North-East and Mfamosing in Cross River State, South-south, Lafarge Africa Plc, currently has an installed cement production capacity of about 10.5 million tons per annum, it was learnt.

Aside from its cement operations, located in Sagamu and Ewekoro, both in Ogun State, with a combined production capacity of 4.5 million metric tons per annum (MTPA), the geocycle and mortar plants are also located in the South-west.

Its product portfolio includes five brands – Elephant Cement, Supaset, Powermax, Etex and SRC, a sulphate resistant cement for coastal construction.

Its mortar products include: TectorPlast used for floor screed, floor tiling, wall screed, and wall tiling, among others.

On the other hand, Huaxin, the new investor, checks showed, boasts 116 years of operations, having established itself as a leading company in China as well as the global cement industry.

For over two decades, Huaxin Cement said on its website that it has consistently maintained an average annual compound growth rate of 25 per cent, securing its place as one of the top 10 manufacturing companies in China.

Huaxin Cement operates across over 300 branches and subsidiaries within China and overseas, working across multiple sectors, such as cement, concrete and environmental protection.

Emmanuel Addeh

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