Tuesday, September 8, 2015 8:18 am
Dangote Cement, majority owned by Africa’s richest man Aliko Dangote, at the moment controls around 70 percent of Nigeria’s cement market share in terms of output, with 29.25 million tonnes capacity.
The local unit of French cement maker Lafarge Africa, with 8 million tonnes, ranks second.
But the third major player, BUA Cement, which was incorporated in 2008, is aiming to topple Lafarge and then aim at Dangote itself, in the struggle for number one.
At present, BUA controls 10 per cent of the market and has set its sights on taking 20 per cent market share. The company also has the ambition to expand into Africa, just like Dangote has done.
BUA, with interests in pasta, steel and real estate, has three cement producing plants in Nigeria, the first being the Port Harcourt plant which was commissioned in 2011. This was followed with acquisitions of Cement Company of Northern Nigeria in Sokoto and Obu Cement Plant in Edo state.
An indication of BUA’s ambition was demonstrated in the company’s signing of a $600 million worth of contracts with China’s Sinoma International Engineering Co. to double capacity at its flagship cement plant in Obu as it seeks to expand market share in Africa’s biggest economy.
The Obu plant currently produces 3.5 million tonnes. It expects to complete the expansion by 2017, BUA’s executive chairman Abdulsamad Rabiu said at the signing ceremony held at Sinoma’s offices in China.
Sinoma is adding an extra 1.5 million tonnes at CCNN, which should be completed early next year, the company said.
Last week, the same Sinoma signed $4.34 billion worth of contracts with Dangote Cement to almost double its production capacity across Africa, including Nigeria. The agreement was signed in Lagos.
Lafarge Africa, now number two combined its South Africa operation with its publicly traded Nigerian business last year to accelerate growth on the continent.
The rapid expansion and intense competition among cement makers in Nigeria and Africa generally are targeting a boom in Construction projects across Africa.
A 2014 report by Deloitte estimated that the projects were worth around $325 billion last year, up nearly 50 percent from the previous year as power, transport, oil and gas and real estate sectors expanded.