Huaxin Cement Ltd has once again demonstrated China’s influence in Africa’s cement markets by acquiring a majority stake in Lafarge Africa PLC, Nigeria, from Holcim.
Lafarge Africa PLC, part of the Holcim group, is valued at $1 billion based on the total value of its shares. Huaxin Cement has submitted an offer to acquire Holcim’s 83.81% stake in this African subsidiary. Lafarge Africa PLC’s operations encompass Ashaka, Ewekoro 1 and 2, Sagamu and Mfamosing plants, with a combined total cement production capacity of 10.35 million tons per year. Notably, Holcim retains a 41.5% stake in Huaxin Cement.
Holcim appears to be looking to disinvest a big part of its African portfolio and transfer it to its partner, which has already acquired Lafarge Cement Malawi and Lafarge Zambia (now Chilianga Cement) from Holcim. Huaxin Cement is also on the verge of commissioning a 0.3 Mta plant in Zimbabwe.
The Chinese group has earmarked $15 million for the construction of a plant in Zimbabwe, which will be in Mount Hampden. This facility could be expanded in the future to reach a cement production capacity of 1 Mta, depending on Huaxin Cement identifying new limestone reserves in the region. According to Clemence Gomba, director of Huaxin Zimbabwe, the company was established in October 2024, and construction work is up to 70 percent complete. Gomba also indicated that the plant is expected to be operational during the first quarter of January 2025, with commission scheduled for December 27, 2024.
Huaxin Cement has also been involved in other acquisitions on the African continent. In 2023, it successfully acquired InterCement Participações SA from Mozambique and South Africa. Recently, Ciments de Moçambique (Huaxin Cement group) commissioned its new 3,000 tpd kiln line in Nacala, Mozambique. Huaxin also acquired ARM Cement in 2019, based in Tanzania.
In addition to its cement operations in China, Huaxin Cement has overseas cement assets in Cambodia, Kazakhstan, Nepal, Oman, Tajikistan, Tibet and Uzbekistan. As of the end of 2023, the group’s most recent annual report indicated it had 127 Mta of cement production capacity, 277 Mta of aggregate capacity and 122 Mm3 of ready-mix concrete production capacity. About 57 percent of the conglomerate’s revenue comes from cement manufacturing.
Huaxin Cement is currently implementing an acquisition strategy. There are still plenty of more opportunities to continue its focus on Africa, however, it appears its next acquisition could be in Southeast Asia. It is believed to be among the top two bidders for UEM Group’s Cement Industries of Malaysia Berhad (CIMA) in Malaysia, along with Heidelberg Materials Group.
The special amendment signed last month between Companhia Siderúrgica Nacional and InterCement Participações and Mover Participações SA in Brazil appears to have led to Huaxin Cement missing out on the opportunity to buy more plants from the Brazilian cement producer.
Meanwhile, Holcim continues to reduce its cement capacity in Africa. The Swiss multinational remains focused on diversifying its construction materials portfolio into roofing, aggregates, demolition materials and ready-mix concrete businesses, and is set to spin off its North American business in the United States.
Huaxin Cement Ltd reaffirms its position as a key player in the expansion of the cement industry globally, with a strategic focus on Africa. Through major acquisitions and the commissioning of new plants, the Chinese company has consolidated its presence in key markets by boosting its production capacity and diversifying its international portfolio.
Their aggressive growth strategy contrasts with Holcim’s approach, which continues to disinvest African assets to focus its strategy on diversified construction materials and operations in other markets. Huaxin Cement demonstrates a clear commitment to strengthening its leadership in the global cement industry, while positioning itself to take advantage of future opportunities in emerging and strategic markets.
Source: cemnet.com
