Huaxin Cement Targets Nigeria for Expansion Amid Domestic Challenges
Huaxin Cement is planning a US$1 billion acquisition in Nigeria, positioning itself as the second-largest cement producer in sub-Saharan Africa as it counters declining profits in China. Currently, Huaxin operates ten plants in the region with a capacity of 18 million tonnes.
Huaxin Cement, a prominent Chinese cement manufacturer listed on the Shanghai Stock Exchange, is actively expanding its presence in Africa. The company has announced a substantial acquisition plan amounting to US$1 billion aimed at establishing a foothold in Nigeria, following its existing investments in sub-Saharan Africa where it operates ten cement plants with a combined production capacity of approximately 18 million tonnes annually. This strategic move is initiated in response to diminishing profit margins in the domestic Chinese market, as Huaxin seeks to leverage Nigeria’s promising growth potential.
The cement industry in Africa presents considerable opportunities for growth, particularly in countries where infrastructure development is accelerating. Huaxin’s entry into Nigeria is significant as the nation represents an attractive market due to its burgeoning demand for cement driven by ongoing construction and urbanization. With this acquisition, Huaxin aims to become the second-largest cement producer in sub-Saharan Africa, challenging the dominance of Dangote Cement, which currently holds the title with a capacity of 52 million tonnes across ten African nations.
In summary, Huaxin Cement is embarking on an ambitious expansion into Nigeria, signifying its commitment to enhancing its market position in Africa amidst competitive local players. The anticipated acquisition, pending regulatory approval, is expected to bolster Huaxin’s production capacity significantly and serves as a strategic hedge against the challenges posed by shrinking margins in the domestic Chinese market.
Original Source: www.scmp.com
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