Lafarge Africa Expansion Pivot Triggers 37% Upside Potential For Stock

Lafarge Africa Plc (WAPCO) has officially entered a new growth phase, marked by its first major capacity expansion in a decade. Following the entry of new majority ownership (Huaxin Cement), the company is pivoting from a “maintenance” mode to an aggressive “market share” strategy.

According to a March 13, 2026, research update, analysts at CardinalStone Partners have raised WAPCO’s 12-month Target Price to ₦280.48 (up from ₦202.87), representing a 37.5% upside.

The buy case is anchored on a ₦347 billion expansion plan that aims to reactivate mothballed assets and double the company’s footprint in the high-demand South-West region.

The ₦1.3 Trillion Revenue Path: Volume over Pricing

WAPCO outperformed its peers in 2025, growing revenue by 53.0% to cross the ₦1 trillion milestone. Unlike rivals who relied heavily on price hikes, WAPCO’s growth was fueled by utilization efficiency and product innovation.

Source: CardinalStone Partners

• Eco-Innovation: New low-carbon products (ECOPlanet and ECOcrete) already account for 27% of total sales. ECOPlanet specifically captured 50% of the Western region’s sales within months of its launch.

• Utilization Alpha: Through “debottlenecking”—particularly at the Ewekoro plant—WAPCO successfully raised output by 12.5% YoY in a period where sector volumes were largely stagnant.

The Massive Expansion: Reactivating Sagamu

The most significant shift in WAPCO’s investment case is the $250 million (₦347.1 billion) expansion project set for completion by December 2026. WAPCO has announced a plan to expand its capacity to 14.0 MTPA from 10.5 MTPA.

• Sagamu Reactivation: WAPCO will bring the Sagamu plant in Ogun State back online, increasing its capacity from 1 MTPA to 3.5 MTPA. This gives the firm a massive logistics advantage in the South-West infrastructure hub.

• Northern Footprint: The Ashaka plant in Gombe will be doubled to 2 MTPA, allowing WAPCO to compete more aggressively on price in Northern Nigeria by reducing freight expenses.

• Internal Funding: In a sign of massive balance sheet strength, management intends to fund the entire project through internal cash flow, avoiding expensive debt despite the high-interest-rate environment.

This reactivation should result in the addition of 4.5 MTPA to WAPCO’s effective 9.5 MTPA capacity. It also represents the company’s first capacity expansion since 2016 and looks set to effectively double the company’s capacity in the Southwest (a leading region for cement consumption) and increase its footprint in Northern Nigeria.

Cost Optimization: Waste-to-Energy and CNG

WAPCO is taming energy volatility by diversifying its fuel mix away from expensive diesel (AGO) and LPFO.

• CNG Fleet: The company added 500 CNG trucks in 2025 and is commissioning a new CNG station at the Mfamosing plant to further reduce distribution costs.

• Circular Economy: A partnership with LAWMA is turning Lagos municipal waste into alternative fuel, helping the firm reach an alternative fuel substitution rate of 15%.

• Captive Power: The upcoming Ashaka captive power plant is expected to insulate Northern operations from grid instability and lower energy costs by significant margins.

Valuation: A “Global Discount” Play

CardinalStone analysts highlight that WAPCO is currently trading at a significant discount compared to its Middle East & Africa (MEA) peers.

• P/E Multiple: WAPCO trades at 11.8x vs. the MEA peer median of 21.0x.

• EV/EBITDA: WAPCO stands at 6.7x vs. the peer median of 9.8x.

• Dividend Commitment: Despite the heavy ₦440.5 billion CapEx planned for 2026, management has reaffirmed its commitment to maintaining shareholder returns, paying out a total of ₦10 per share of dividends in 2025, which is forecast to rise to ₦17.54 by 2027.

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