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BUA Cement has overtaken Lafarge Africa to become Nigeria’s second largest producer of cement by sales volume.
While Dangote Cement and Lafarge Africa were struggling to grow sales volume, BUA Cement was ramping up production as its revenue enjoyed upward adjustment in ex-factory price, according to Research House Chapel Hill Denham.
The above stellar performance means BUA’s market share expanded by 3.9 percentage points year on year (yoy) to 21.7 percent vs. 18.0 percent for Lafarge and 60.3 percent for DANGCEM.
“We imagine that BUACEMENT is poised to capture more share of the market through the rest of the year, especially given Lafarge’s cold feet towards investing in a new production line,” said analysts at Chapel Hill Denham.
The research house sees BUA Cement continuing its production ramp-up in its new 3mmt line IV in Kalambaina that was delivered this year, adding that the cement maker is also lacing up to launch a new 3mmt plant of installed capacity this year, a development that will bolster its market share war chest.
BUA Cement recorded double digit growth in both top lines and bottom lines to overtake Lafarge Africa as the reopening of the economy and benign weather conditions accelerated construction activities.
Revenue increased by 58.4 percent to N96.988 billion as at March 2022 while net income rose by 48 percent to N33.14 billion.
Analysts are sanguine BUA Cement’s earnings will continue on an upward trend as higher energy cost due to the negative impact of Naira devaluation will trigger further price increases.
Furthermore, the proposed government aggressive infrastructure spending as evidenced in the 2022 budget will accelerate demand for building materials, which is a boon for sector operators.