Chinese Cement Giant Expands Footprint in Africa as Real Estate Investment in China Declines
As real estate investment in China continues to decline, Chinese cement makers are turning their focus to new markets. One such company, Huaxin Cement, is aggressively expanding its presence in Africa, capitalizing on the continent’s growing infrastructure needs.
With plans to divest its Nigerian operations, Swiss cement maker Holcim has opened up an opportunity for Huaxin Cement to invest in Nigeria, Africa’s most populous country. Huaxin has recently signed an agreement to acquire an 83.81% stake in Lafarge Africa PLC from Holcim for a total equity value of US$1 billion.
According to Huaxin Cement Vice President, Gang Xu, the company plans to leverage its extensive experience in operating cement plants across 12 countries, including 7 in Africa, to further grow Lafarge Africa’s operations in Nigeria.
This move follows Huaxin’s previous investments in Zambia, Malawi, and South Africa, demonstrating the company’s commitment to expanding its footprint in the African market. In Mozambique, the company has already commenced trial production at a new clinker production line.
Lafarge Africa Plc Chairman, Gbenga Oyebode, believes that this partnership will strengthen Lafarge Africa’s position as a key player in Nigeria’s infrastructure and economic development. He highlighted Nigeria’s positive growth indicators, increasing urbanization, and infrastructure demand as key drivers for cement consumption in the country.
Expert Market Research has also identified Nigeria, South Africa, Kenya, Ghana, and other African countries as major cement markets with significant infrastructure investment projects. These projects, including ports, railways, and affordable housing programs, are driving up the demand for cement in the region.
In Nigeria, projects like the Lekki Deep Sea Port and the Lagos-Kano Railway are contributing to the country’s infrastructure development and increasing cement consumption. Similarly, in Kenya, the expansion of the Standard Gauge Railway and a large affordable housing project are driving demand for cement in the market.
Despite the declining fortunes of the Chinese construction industry, Huaxin Cement remains optimistic about its expansion in Africa. The company aims to improve its market competitiveness and brand influence by offering high-quality products and services to meet the growing demand for cement in the region.
As Huaxin Cement competes with local brands like Dangote Cement and BUA Cement in Nigeria, the company’s aggressive expansion in Africa reflects a shift in focus from the declining Chinese market. With a decrease in real estate investments and cement production in China, Chinese cement makers are looking to Africa as a new growth opportunity.
Overall, Huaxin Cement’s expansion in Africa highlights the continent’s potential for growth in the cement industry, driven by increasing infrastructure development and urbanization trends.
Conrad Onyango, Bird Story Agency
