Three cement manufacturers, Dangote Cement, BUA Cement and Lafarge Africa Plc reported a combined N3.623 trillion in their sales revenue in the third quarter (Q3) ended September 30, 2024.
The amount represents a 69.3 per cent increase from N2.140 trillion combined revenue reported by the companies in the same period of 2023.
The three top cement producers have recorded a staggering surge in sales revenue despite the economic headwinds in the country, which disrupted the business environment, ranging from the FX crisis, rising energy prices, and wilted disposable income of citizens, amongst others.
Despite these obstacles, cement producers have achieved outstanding financial performance, driven by price. Domestic cement prices have remained high, ranging between N7,400 and N8,000 per 50 kg bag, up from an average of about N6,000 a year ago, reflecting the broader macroeconomic situation.
Also, rising sales volumes and higher product prices combined to result in substantial growth in net sales revenue for the major cement producers.
During the period under review, Dangote Cement recorded the highest net sales at N2.561 trillion, an increase of 69.06 per cent from N1.515 trillion in the first nine months of 2023.
BUA Cement achieved total sale of N583.405 billion, a 73.70 per cent rise from N335.863 billion during the same period in 2023, while Lafarge Africa also saw its sales revenue increase by 65.87 per cent, reaching N479.497 billion compared to N289.081 billion in 2023.
Capital market analysts said the increase in their sales revenue was largely due to the increase in the price, high demand for construction and infrastructure development in the country.
Speaking on the growth in cement sales in Nigeria, the vice president of Highcap Securities Limited, David Adonri said that it reflects the high demand for infrastructure development.
He also said that the demand for construction and infrastructure development remains high, driven by both private and public sector projects, explaining that the resilience of the market, even with financial challenges, highlights the critical role of cement in Nigeria's ongoing urbanisation and development.
The chief operating officer of InvestData Consulting Limited, Ambrose Omordion said that "the cement industry faces strong global pressures from high energy costs, sustainability mandates, and weak demand, particularly in Nigeria, where inflation and high interest rates are reshaping capital expenditure trends. Despite these challenges, Dangote Cement, BUA Cement and Lafarge Africa have demonstrated resilience through focused cost containment and business diversification.
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He noted that "local Cement industry peers bent their sails against persistently challenging macroeconomic conditions. Cement companies adopted varying operational models to manage rising costs and worsening liquidity constraints caused by higher currency risks, inflation, and interest rates."
Speaking on the company's performance in Q3, 2024, the CEO of Lafarge Africa, Lolu Alade-Akinyemi stated that the Company's performance reflected its strategic focus on sustainability and operational efficiency.
He stated that Lafarge Africa has achieved strong top-line growth of 101 per cent and 66 per cent in Q3 and nine months, respectively.
"Our performance was driven by strong output due to improved plant stability, enhancement in our supply chain operations and our cost management initiatives," he said
According to Akinyemi, our strategic initiatives contributed significantly to our results despite macroeconomic challenges. We remain committed to our innovation drive and green growth acceleration, in line with our sustainability ambitions, while also delivering value to our stakeholders."
On outlook for the Company, Akinyemi explained that "the Nigerian Infrastructure and Construction Sector is expected to continue to grow despite inflationary pressure on purchasing power. As a result, we maintain our positive outlook, with market recovery expected in Q4, 2024.
"We will continue to maximise volume opportunities across our markets and actively manage our costs."
