Nigeria Cement Sector in H2-2020: Staying resilient?

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In our 2020 Outlook report titled ‘’A different playing field,’’ we expected the cement industry to be on the path of growth, this growth was to be fueled by a huge deficit in the infrastructure space across the continent, the renewed commitment of the Federal Government of Nigeria (FGN) to invest heavily in transport (including road, rail, and ports) and housing infrastructure, and coupled with low cement consumption per capita in Nigeria which stands at 150kg compared to the global average of 561kg.

Interestingly, despite the disruption in the supply chain caused by COVID-19, the players in the cement space show resilience, reporting better than expected performance for the period.

Nigeria Cement Sector in H2-2020: Staying resilient?
Sources: Bloomberg, United Capital Research

Looking ahead, we are optimistic about Nigeria’s cement industry in H2-2020E as we believe that the Economic Sustainability Plan (ESP) if implemented within the time frame stipulated, could raise some hope for the cement industry.

This is as the FG have committed to renewing commitment towards the construction and maintenance of federal highways, roads, bridges, and road interventions within federal
tertiary institutions across the country.

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Speaking briefly about the key players, we expect revenue growth to be sustained across the board with DANGCEM and WAPCO estimated to grow revenue by 2.4% and 3.3% to N912.8bn and N252 in FY-2020E buoyed by better average prices and volume increase while we expect 12.7% rise in BUACEMNET topline to M197.9bn.

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