Huaxin Cement is set to invest USD 1 billion in Nigeria, aiming to enhance its position in Africa amid declining margins in China. This move may elevate Huaxin to the second-largest cement producer in sub-Saharan Africa, competing with the prominent Dangote Cement. Regulatory approvals are pending for the completion of the deal.
Huaxin Cement, a major Chinese company listed on the Shanghai Stock Exchange, is expanding its operations in Africa with a planned acquisition in Nigeria. The company is aiming to invest approximately USD 1 billion in this endeavor to bolster its presence on the continent and mitigate the impact of declining margins in its domestic market. Currently, Huaxin operates ten cement plants in sub-Saharan Africa, producing around 18 million tonnes of cement annually.
If the acquisition proceeds, it would enable Huaxin to become the second-largest cement producer in sub-Saharan Africa. However, they will face competition from Dangote Cement, Africa’s largest producer, which boasts an impressive production capacity of 52 million tonnes across ten countries. Huaxin views the Nigerian market as a viable opportunity for growth amid challenging conditions at home, as they seek to finalize the transaction soon, pending regulatory approvals.
Huaxin Cement has been progressively enhancing its footprint in Africa, primarily to tap into the continent’s burgeoning market while addressing the financial pressures it faces in China. The Global Cement Directory indicates that Huaxin’s investment in existing facilities throughout sub-Saharan Africa has established a solid base, with a noteworthy production capability currently in place. This latest move to enter Nigeria is strategically significant, positioning Huaxin to leverage the growth potential the region offers in the cement industry as domestic profitability wanes.
The strategic investment by Huaxin Cement in Nigeria underscores the company’s commitment to expanding its footprint in Africa while countering unfavorable economic conditions in its home market. By pursuing this acquisition, Huaxin aims to establish itself firmly as a leading player in the cement industry, competing directly with established giants such as Dangote Cement. The anticipated completion of the deal, subject to regulatory approval, presents an exciting opportunity for both Huaxin and the Nigerian cement market as it continues to evolve.
Original Source: www.scmp.com
