The best business in Nigeria right now is making cement. I mean, there is no rival. Cement firms are generating tons of money. Dangote Cement alone paid N40 billion on income tax in Q1 2021 when most of the banks combined for N42 billion. Lafarge, BUA and Dangote Cement generated a revenue of N960 billion in H1 2021, a 37% growth compared to the same period in 2020.
This follows a global trajectory where the construction industry is booming. But note one deviation: the big 3 of cement in Nigeria are returning humongous gross margins; Dangote 60%, BUA 46% and Lafarge 33%. Dangote Cement made history in half year and quarterly revenues at N690.5 billion and N357.8 billion respectively, holding more than 70% of the market share. Nairametric has numbers for other companies.
Nairametrics reported in April that Dangote cement, increased its cement price from N2,800 to N3,800, representing a 35.71% increase. While speaking on the need for the price increase, he stated, “On the price side, we have been able to push prices up in all our countries despite resistance from local government as cement pricing is always a sensitive problem… However, the world economy especially freight cost was impacting all our inputs such as cement.”
Update: On the CementTech, one of our startups just noted that it would do it. So, the open call is closed. Do not send your ideas to Tekedia Capital as there is no need.
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How do the numbers from the cement Big 3 compare with telcos Big 3? I think that’s a better comparison, banking is not a productive sector, especially here where they basically do nothing, their profits aren’t much of hard work, they can still make money even without doing anything.
Our food industry hasn’t really evolved, breweries are trying but can still do much better, others are still on the ground.
We don’t have many big companies yet, for now let’s keep believing that the few still standing are doing well.
Superb thinking