Demand for cement in Nigeria, sub- Saharan Africa’s second-biggest economy and the continent’s most populous nation, is expected to rise 45 percent in 2011, Stanbic IBTC Bank Plc said.
Output of the building material may increase 63 percent next year, while demand will surge to as much as 47.9 million metric tons a year by 2014, Lagos-based analysts including Tomi Ajai, Bunmi Njugo and Esili Eigbe wrote in an e-mailed report dated Oct. 27.
“Nigeria is one of the lowest cement-consuming countries in the world,” with 17.4 million tons consumed in 2009, representing 116 kilograms (256 pounds) per person compared with 325 kilograms each in the developed market and 550 kilograms in developing markets, they said.
Demand is being driven by a construction boom as the country, Africa’s top oil producer, embarks on the provision of houses, schools, roads and bridges for its 150 million people. Local demand for cement is expected to increase as government revenue climbs due to higher oil prices, Lagos-based Access Investments and Securities Ltd., a unit of Access Bank Plc, said in a research note in May.
Nigeria expects to attain self-sufficiency in the production of cement and become an exporter in 2013, when production is forecast to reach 22 million metric tons, compared with the government’s projection of domestic demand at 20 million metric tons, Commerce and Industry Minister Jubril Martins-Kuye said Sept. 30.
Capacity Expansion
Domestic producers such as Dangote Cement Plc, Africa’s biggest producer of the material, Lafarge SA’s local unit, Ashaka Cement Plc and Cement Company of Northern Nigeria Plc, are expanding their plant capacity to meet rising demand.
Lafarge WAPCO Nigeria Plc’s price estimate was raised to 48.5 naira, from 42.5 naira, while its recommendation was maintained at “hold,” Stanbic said.
Ashaka’s rating was reduced to “sell” from “buy,” with a price estimate of 25.3 naira, according to the report.
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