Nigerian Cement: Forging ahead through macro headwinds

Strong but varied unit volume growth in H1 2016 

Sector-wise, unit volume growth for Nigerian cement companies in H1 2016 was stellar, at around 21% y/y. However, on a company by company basis, fortunes varied. While Dangote Cement, Nigeria’s largest cement producer, saw unit volume growth of +39% y/y in H1 2016, unit volumes for its smaller rivals, Ashaka Cement and Lafarge Africa, were flattish and fell -11% y/y respectively. Growth in H1 was underpinned by strong demand from the private home building segment. However, the federal government’s (FG) plan to stimulate the economy through rapid release of the capital vote is expected to result in strong demand from the government side. Given capital releases of around N750bn so far vs. N195bn for 9M 2015 together with continuing demand from the private segment, we expect y/y growth to be healthy in H2 2016.


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