New Factories
Africa has become one of the world’s fastest-growing regions for the building material as rapid urbanization and spending on transport, power and shipping boost demand. Significant projects under construction include Ethiopia’s $4 billion hydro-power dam on the Blue Nile River and a $13 billion railway that will link the Kenyan port of Mombasa to the Rwandan capital of Kigali via Uganda.
With 50 million tons a year of cement capacity, LafargeHolcim is the largest producer in continental Africa. Domestic producers also must compete with cheap imports from countries including Pakistan, according to analyst Sonia Baldeira.
“Dangote is rapidly expanding its footprint across Africa,” said Pabina Yinkere, head of research at Lagos-based Vetiva Capital Management Ltd. “Many of the cement plants within the region are old and aging. Their efficiency has fallen, so with its new plants it will be able to compete strongly.”
LafargeHolcim shares rose 3.7 percent at 2:10 p.m. in Zurich, while Dangote Cement was unchanged at 164.50 naira.