Nigerian cement prices are expected to rise next year after a slump in Africa’s biggest economy, according to Lafarge Africa Plc (WAPCO)’s country Chief Financial Officer, Anders Kristiansson.
Prices, which fluctuate depending on movements in the local currency and when capacity comes on board, fell 22 percent in November, Kristiansson said in an interview today in Hong Kong. The Lagos-based unit of Lafarge SA is “very optimistic” prices will probably increase again from mid-2015, he said.
“Prices have been adjusted, so there’ll be an impact for the next six months,” Kristiansson said. “Over the long run, they’ll stay around the current level.”
Paris-based Lafarge, which is merging with Holcim Ltd. to create the world’s biggest cement company, competes in Africa with Dangote Cement Plc (DANGCEM), owned by the continent’s richest man Aliko Dangote. Dangote Cement, Nigeria’s largest company and producer of the building material, said last month it cut cement prices.
Lafarge’s cement capacity at its plants in Nigeria and South Africa will rise above 20 million metric tons by 2020 from about 12 million tons currently, Kristiansson said. Lafarge Africa’s shares listed in Lagos have dropped 38 percent this quarter, compared with the 19 percent decline of the Nigerian Stock Exchange All-Share Index.
“Demand is so big in Nigeria that we’re struggling to meet it although we’re investing heavily,” he said. “Hopefully, we’ll be able to export one day, but our first focus is to meet demand in South Africa and Nigeria.”
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