NIGERIA’S CEMENT INDUSTRY STRUGGLES WITH LOW DEMAND AND HIGH PRODUCTION COSTS

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Nigeria’s cement industry is facing low per-capita consumption and high production costs, according to stakeholders in the building materials sector.

The Chief Executive Officer of HBM Nigeria, Lolu Alade-Akinyemi, said Nigeria’s cement consumption remains below 150 kilogrammes per person, compared with about 500kg in Egypt and 700kg in South Africa. He said the low level of consumption indicates room for growth in the domestic market.

Alade-Akinyemi also said cement manufacturers were operating at only about 20 to 30 per cent capacity. He attributed part of the high cost of cement and concrete production to foreign exchange exposure, noting that several key inputs are imported or priced in dollars.

He also identified electricity costs as another major challenge. According to him, cement manufacturers often have to generate their own power because they cannot depend fully on the national grid, requiring significant investment in power plants.

Despite the challenges, he said a relatively stable exchange rate over the past year has helped manufacturers forecast costs and plan their operations more effectively.

Stakeholders at the event also highlighted opportunities for investment in Nigeria’s construction and real estate sectors, particularly as local and international capital increasingly supports infrastructure development.