Last week Huaxin announced that it had completed the acquisition of Holcim’s 83.81 per cent stake Lafarge Africa, seemingly concluding a US$773m deal for Nigeria’s third-largest cement producer that was originally announced in December 2024. Whether the matter is truly resolved - and not merely Huaxin and Holcim’s attempt to present it as a fait accompli – really depends upon the outcome of a legal challenge by minority shareholders that won’t be ruled upon by Nigeria’s Federal High Court until October, but this isn’t mentioned in the press release.
The takeover establishes Huaxin as a major player in Nigerian cement, giving it control of four integrated plants and a production capacity of 10.6Mta in what it describes as a “key strategic pivot”. A few months ago, ICR looked at Huaxin’s growth in southern Africa, where its upgrades and greenfield plants in South Africa, Zambia, Mozambique, Tanzania and Zimbabwe have drawn deserved praise for revitalising and modernising cement production in the region, while becoming the second-largest cement producer across the continent.
Such has been the success of Huaxin’s international expansion relative to its status in China (where its capacity is well behind pacesetters CNBM and Anhui Conch) that the recent announcement of plans to spin-off and list its international operations was perhaps inevitable.
But taking a stake in Nigerian cement production might also be read as laying down the gauntlet to Dangote Cement, sub-Saharan Africa’s biggest cement producer, which boasts a 60 per cent share of the Nigerian market. These are good times to be a cement manufacturer in Nigeria, with Dangote, a resurgent BUA Cement and Lafarge Africa between them generating NGN3.2trn (US$2.13bn) in 1H25 despite rising energy costs, raw materials shortages and challenging infrastructure.
It’s testimony to the Backward Integration Policy (BIP) the Nigerian government implemented in the early part of this century to increase local production and self-sufficiency. This transformed the Nigerian cement industry from a net importer with limited facilities of its own to a net exporter with annual production of more than 60Mta. Dangote Cement, formerly Obanja Cement, was arguably the biggest beneficiary, aided by Nigerian businessman Aliko Dangote’s US$6.5bn investment into the company.
Where Dangote Cement, and Nigerian cement production in general, have been found wanting is in adapting to the mandate of decarbonisation. There are no current plans for equivalents to CBI Ghana's impressive calcined clay cement plant, despite the abundant resources of the material in Nigeria.
A recent study by the African Development Bank suggested Nigeria's cement, steel and chemicals sectors require substantial investments totalling US$9.2bn by 2030 if they are to align with decarbonisation targets. Although Dangote’s 2024 sustainability report notes the opportunities in areas such as clinker substitution and carbon capture, it doesn’t appear to manifest into any investment. The World Benchmarking Alliance reprimands that Dangote Cement “lacks a transition plan or climate strategy with financial estimations and associated costs. Additionally, the company does not publicly disclose emissions reduction targets for any of its scope 1, 2 or 3 emissions originating from its operations or its supply chain”.
It was recently announced that Aliko Dangote would step down as chairman of Dangote Cement to concentrate on Dangote Group’s refinery, petrochemicals and fertiliser businesses. His successor, Emmanuel Ikazoboh, is said to be planning to accelerate the adoption of alternative fuels and technologies.
Within Nigeria, Aliko Dangote is regarded as a somewhat divisive figure. To his detractors, he has leveraged political influence, and some allege corrupt practices, to maintain the Dangote Group’s monopolistic hold over the cement, petrochemicals and oil industries in Nigeria and the wider continent. Conversely, he has also come to symbolise Pan-Africanism and the idea that the continent can prosper and be economically self-sufficient without outside intervention.
It would be convenient to see that as diametrically opposed to Chinese expansion across the continent. Dangote Cement’s longstanding relationship with China’s Sinoma, which has built many of Dangote’s plants, belies that and illustrates a symbiosis that has had a profound influence on economic growth and can’t be casually dismissed as debt-trap diplomacy.
The same could prove to be true of Huaxin’s entrance into Nigerian cement production, a new player to a national industry that’s a little too parochial and blindsided to progress.
