China’s Sinoma signs US$600m Nigerian cement expansion deal

Nigerian conglomerate BUA Group has signed US$600 million worth of contracts with China’s Sinoma International Engineering to double capacity at its flagship cement plant as it seeks to expand market share in Africa’s biggest economy.

BUA group, with interests in cement, pasta, steel and real estate, said it expected to double capacity at its Obu cement plant which currently produces 3.5 million tonnes.

It expects to complete the expansion by 2017, BUA’s executive chairman Abdulsamad Rabiu said at the signing ceremony held at Sinoma’s offices in China.

"BUA has less than 10 per cent of market share now. after expansion we should go to about 20 percent," he said.

Dangote Cement, majority owned by Africa’s richest man Aliko Dangote, controls around 70 percent of market share in terms of output, with 29.25 million tonnes capacity in Nigeria.

The local unit of French cement maker Lafarge Africa , with 8 million tonnes, ranks second, industry analysts say.

Construction projects across Africa were worth around US$325 billion last year, a 2014 Deloitte report showed, up nearly 50 per cent from the previous year as power, transport, oil and gas and real estate sectors expanded.

BUA was also eyeing a continent wide expansion, Rabiu said.

Last week, Sinoma signed US$4.34 billion worth of contracts with Dangote Cement to almost double its production capacity across Africa, including Nigeria.