Cement Sector: Overview and Outlook


According to the latest FY-2019 GDP report published by the National Bureau of Statistics, the Nigerian Cement sector remained in growth in 2019, up 3.1%y/y, but slowed when compared with 2018’s 4.5% y/y growth. This was as the operating, and the competitive environment remained challenging for sector players during the period.

Notably, Dangote Cement (DANGCEM) and Lafarge Africa (WAPCO), the 2 of the 3 largest
players in the sector by capacity reported 0.8% y/y and 30.4% y/y decline in Revenue in 9M-19. Meanwhile, Cement Company of Northern Nigeria Plc (CCNN), reported a 117.2% y/y surge in Revenue, buoyed by the completion of its consolidation with Kalambaina cement. Notably, with the recent consolidation of the CCNN and OBU cement into a larger BUACEMENT, we expect revenue growth to further increase. Herein, we state our outlook for the sector’s revenue in 2020.

Cement Sector: Overview and Outlook - Brand Spur

Over 2020, we expect broad sector performance to improve relative to 2019. This is on
the back of our expectation that the FG will quicken CAPEX implementation as we return to
the Jan-Dec budget cycle. Also, our expectation for interest rates to stay low in 2020 and the search for new investment outlets which may bolster new investment in the real estate and construction sector, is positive for the sector growth. Lastly, the implementation of the Africa Trade Continental Agreement (AFCTA) in 2020 is positive for players in the cement market as it avails them an opportunity to tap into the continent’s market with ease.

United Capital Research