Lafarge Africa recently declared its intention to expand the production capacity of two of its manufacturing plants, leading to a 5.1% increase in its share price, which had remained static at N157 since January 27. This development pushes the stock to close at N165 in Lagos trading, with trading volumes surging by 950% to reach 10.5 million, marking the highest level in the past ten days.
According to a statement released to the Nigerian Exchange, Lafarge outlined plans for its Ashakacem and Sagamu plants, which are set to have their capacities increased to 2 million tons and 3.5 million tons per annum, respectively.
Currently, Lafarge Africa's total production capacity is 10.5 million tons annually, distributed across its Sagamu, Ewekoro, Ashaka, and Mfamosing facilities, as detailed on its website.
The proposed upgrades are the first major expansion moves announced since last August, following the acquisition of an 83.8% stake in Lafarge by Huaxin Cement, a Chinese firm, from Holcim, one of the industry's largest players.
Nigeria’s cement industry is notably restricted and predominantly controlled by just three major companies: Dangote Cement, BUA Cement, and Lafarge Africa. This limited competition has historically kept cement prices high while preventing the entrance of potential competitors.
Moreover, these market dynamics have allowed these companies to thrive under regulatory barriers, including import bans, resulting in an impressive average EBITDA margin of around 45% as of June 2025, surpassing averages seen across Africa and Europe.
In the nine-month period ending in September, Lafarge Africa recorded a remarkable 246% increase in profit after tax, totaling N208 billion. This surge in profitability was complemented by a revenue increase from N479.5 billion to N780.5 billion during the same timeframe in 2024.
Additionally, the company's return on equity for this period reached 33%, a substantial rise from the 12.9% reported the previous year.
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