Swiss manufacturer of building materials, Holcim Limited, which is an international investor holding its Lafarge shares in the names of its subsidiaries, Associated International Cement Limited (AIC) UK and CariCement BV is seeking regulatory approval to handover 83.81 percent of its stake in Lafarge Africa Plc to Huaxin Cement by 2025.
Holcim Limited Shares in Lafarge
Holcim Limited as of December 2023 held Lafarge shares in the names of its subsidiaries: AIC Limited UK(27.77 cent) and CariCement BV (56.04 cent) in Lafarge Africa. The remaining 16.19 cent of the issued shares were held by other individuals and institutions.
The Company Secretary, Lafarge Africa, Mrs. Adewunmi Alode in a signed letter posted on the Nigerian Exchange Limited (NGX) website yesterday stated that the Board at a meeting considered communications received from Lafarge’s largest shareholders, Caricement B.V and AIC Limited.
According to her, Caricement’s sole shareholder, Holderfin B.V, part of the Holcim Group, has reached agreement with Hainan Huaxin Pan-Africa Investment Co. Limited and Huaxin (Hong Kong) International Holdings Limited, part of Huaxin Cement, pursuant to which they will acquire respectively full ownership of Caricement and a second entity, Davis Peak Holdings Limited, which will hold the shares held currently by AICL.
“Upon completion, the Huaxin Cement entities will hold a combined 83.81per cent shareholding in Lafarge Africa.
“This transaction is subject to regulatory approvals and is expected to close in 2025.
Following completion of this transaction, Lafarge Africa Plc will remain listed on NGX and, subject to regulatory approvals, Huaxin Cement intends to launch a mandatory takeover offer in compliance with applicable laws and regulation.” She said.
The Evolution of Lafarge in Nigeria: A Story of Growth, Mergers, and Changing Markets
Lafarge, a global cement powerhouse, made its foray into Nigeria in 1974 with the acquisition of Blue Circle Industries. This marked the beginning of Lafarge’s long-standing relationship with Nigeria, a partnership that would shape the country’s cement industry.
Blue Circle Industries had already laid the groundwork by establishing West African Portland Cement (WAPCO) in 1959 in collaboration with the Western Region government, making WAPCO a cornerstone of Nigeria’s industrial landscape. With this acquisition, WAPCO became part of Lafarge’s global network, signaling a new era of cement manufacturing in Nigeria from 1974.
Strategic Expansion and Consolidation
Over the decades, Lafarge expanded its footprint in Nigeria through a series of strategic mergers and acquisitions. In 2001, it acquired a majority stake in Ashaka Cement, one of the country’s leading cement producers, bolstering its capacity to meet growing domestic demand. By 2008, Lafarge further extended its African presence by acquiring a significant stake in South Africa’s Natal Portland Cement (NPC), enhancing its production capacity and influence across the continent.
In in 2014 Lafarge consolidated its Nigerian operations under Lafarge Africa Plc. This move unified its various entities, including Lafarge Africa WAPCO, Ashaka Cement, Atlas Cement, and its South African operations, creating a more cohesive structure to compete in the increasingly dynamic market.
A Global Merger and a Regional Shift
The cement giant’s global strategy took another leap in 2015 when Lafarge merged with Swiss building materials behemoth Holcim, forming the Holcim Group. As a result, Lafarge Africa Plc became part of the world’s largest building materials company, a merger that reshaped its operations and global standing.
In 2019, Lafarge Africa took a significant step by selling its South African subsidiary, Lafarge Africa South Africa Holdings (LSAH). The divestiture signalled a renewed focus on the Nigerian market and the broader West African region, aligning with the company’s strategy to consolidate resources and strengthen its core operations.
The Huaxin Acquisition – the New Phase in Lafarge Evolution
The $ 1 billion deal between Huaxin and Holcim marks the transition from European majority holding to Asian ownership for Nigeria’s oldest cement company. The Holcim Group is known for a commitment to environmental sustainability and innovation. Lafarge Africa in 2024 launched WaterShield, Nigeria’s first waterproof cement and has also launched an array of eco-friendly products in the market. What will be Huaxin Cement’s priorities and strategy in Nigeria?
The history of Huaxin Cement Co., Ltd goes back to pre-communist China; the company was founded in 1907 and is widely regarded as the “father” of Chinese cement industry. Huaxin Cement’s CEO is Yeqing Li, appointed in Mar 2004; he owns 0.068% of the company’s shares that is worth US $2,113,480 USD.
Huaxin Cement has until recently focussed on its home market. In 2023, it had an annual cement production capacity of 120 tons (compared to the industry leader’s, China National Building Material Co., Ltd. (CNBM) 530 million metric tons. Huaxin Cement is however a diversified building materials group, operating over 100 Ready-Mix Concrete stations with an annual production capacity of 86 million cubic meters and producing 210 million tons of aggregates per annum. There is thus a fit with Lafarge’s diversified production (of a range of building materials) in Nigeria.
From 2014, Huaxin Cement has expanded through acquisitions in Nepal, Cambodia and Oman. It has expanded in Africa, acquiring a 75% stake in Lafarge Zambia and buying Lafarge Cement Malawi wholly in 2021 and in 2023 it bought the InterCement businesses in South Africa and Mozambique.
