Nigerian Lafarge unit eyes growth, cost cuts

Nigerian Lafarge unit eyes growth, cost cuts
Published: 11 June 2009

Ashaka Cement Plc , a Nigerian unit of Lafarge, plans to expand output capacity while cutting costs as it fights to regain market share from new entrants.

Ashaka, from the northeast of Africa’s biggest oil producer, said it aimed to extend capacity at its base in Gombe State to 1Mta from 850,000t within two years, and was considering adding further lines.

"Nigeria in terms of per capita cement consumption is still quite low. The market is about ... 14-15 million tonnes, but even if you put in 20 million (that level of supply) would be taken up," said Managing Director Muhammad Daggash. "We sell everything we make."

Ashaka was feeling the impact of new producers who had built cement plants in Nigeria as well as from imports following the sector’s liberalisation.

"We’re now seeing quite a bit of imported cement coming into our traditional markets and that is leading to a bit of loss of market share," he told Reuters in Cape Town on the sidelines of the World Economic Forum on Africa.