With cement manufacturers in Nigeria rapidly ramping up cement production capacity, Nigeria is now the biggest Sub-Saharan Africa manufacturer of the commodity.
According to a Renaissance Capital (Recap) report on the cement industry in the region the Nigerian cement industry overtook South Africa to become the largest cement producer in the Sub-Saharan, region, and the third largest in the Middle East/Africa region, as the industry capacity passed the 20 million tonnes per annum mark.
Nigeria’s capacity now stands at 28 million tones per annum against the current South African production of 18.3 million tones per annum.
Apart from Nigeria and South Africa, the combined cement production capacity of the rest of the region is put at 62 million metric tonnes per annum.
A report by Renaissance Capital, a Lagos-based financial advisory firm, said Nigeria would maintain this position as manufacturers continued to invest over the medium term, predicting that market capacity in the country will peak in 2020 at just under 50 million tonnes per annum.
“The Nigerian cement market has changed significantly over the past five years, driven by favourable government regulation, rising demand and increased investment on the back of aggressive economic growth. Over the medium term, we continue to see opportunities for those players who are able to invest in additional capacity and grow distribution networks in the country,” the report noted.
The Rencap report also explained that consumption growth remained supportive of cement investment in Nigeria, noting that cement consumption has remained strong in Nigeria, growing from 14.8mnt in 2009 to 18.3mnt in 2012 and this momentum had been maintained into 2013 despite the negative impact of flooding that occurred in late 2012.
“We forecast cement consumption to continue to grow over the medium term at a CAGR of 10 per cent until 2020, on the back of sustained growth in Nigeria’s economy.
“At this level of volume growth, our forecast imply an expansion in per capita consumption from 108 kilogramme to 190 kilogram by 2020, still below South Africa (198 kilogram), Angola (240kg) and Senegal (198kg) Rencap said in its report.
