Swiss cement maker Holcim AG is set to exit the Nigerian market by selling its 83.8% stake in Lafarge Africa to China’s Huaxin Cement Co. in a landmark $1 billion deal. The transaction, expected to close in 2025 pending regulatory approvals, underscores Holcim’s ongoing strategy to streamline its portfolio and focus on high-growth regions and sustainable building solutions.
This move continues Holcim’s global divestment trend. In 2021, the company sold its 75% stake in Lafarge Zambia to Huaxin Cement for $100 million, alongside the divestment of its operations in the Indian Ocean region, including markets like Madagascar, Reunion, and Seychelles. These actions align with Holcim’s strategy to consolidate operations in core markets, prioritizing higher-margin products and innovative solutions.
The Nigerian cement market, however, remains a thriving industry. Lafarge Africa, with a current market capitalization of ₦934 billion (approximately $556 million), is set to see its valuation nearly double under the deal. Analysts are keenly observing whether Huaxin Cement will retain Lafarge Africa’s listing on the Nigerian Exchange (NGX) or opt for delisting after the acquisition.
For Huaxin Cement, the acquisition marks its debut in Nigeria’s growing cement industry. Founded in 1907, Huaxin Cement is one of China’s top 10 cement manufacturers, boasting a market capitalization of $2.18 billion. Its foray into Africa began with acquisitions in Zambia, Malawi, and South Africa. With Nigeria as the latest addition to its portfolio, Huaxin aims to strengthen its footprint on the continent.
Huaxin’s financial performance highlights its readiness for expansion. As of September 2024, the company reported revenue of 24.7 billion Chinese yuan ($3.4 billion) and a net income of 1.14 billion yuan ($157 million). These figures reflect Huaxin’s capacity to invest in and potentially transform Nigeria’s competitive cement landscape.
Holcim’s focus, meanwhile, remains on sustainable growth and innovation. The company has committed to advancing its environmental credentials, recently acquiring a stake in Sublime Systems, a U.S. startup specializing in low-carbon cement. Additionally, Holcim is preparing to spin off its North American business with a U.S. stock market listing planned for the first half of 2025.
The deal also highlights the shifting dynamics of the African cement market. Chinese companies like Huaxin are increasingly investing in the region, leveraging strategic acquisitions to penetrate high-potential markets. Huaxin’s entry into Nigeria aligns with this trend and is expected to intensify competition within the local cement industry, currently dominated by players like Dangote Cement and BUA Cement.
As the transaction unfolds, Nigeria’s cement industry stands at a crossroads. With Huaxin Cement bringing its expertise and global reach, Lafarge Africa may witness a strategic transformation, potentially driving innovation and operational efficiency. Conversely, Holcim’s exit signals a pivot towards focusing on markets offering better alignment with its long-term goals.
Ultimately, the $1 billion deal between Holcim and Huaxin Cement not only reshapes Nigeria’s cement industry but also underscores the evolving strategies of global building materials giants. For Nigeria, the entry of Huaxin Cement could herald a new era of competition and innovation, setting the stage for further development in the construction and infrastructure sectors.
