Norrsken22 closes African tech growth fund at $205mn

Cement giants Dangote and Lafarge have posted impressive double-digit growth in their third-quarter earnings, despite facing challenges in the market. Abigail Alabi, Industrial Goods Analyst at Sub-Saharan Africa and Vetiva Research, highlighted the key factors driving the performance of these industry leaders. Both companies experienced a decline in volumes due to economic headwinds like cash shortages and FX devaluation in the first and second quarters. However, they were able to offset this with an increase in ex-factory cement prices. Lafarge, in particular, managed to control costs effectively by reducing expenses and exploring alternative fuel sources. Their strategic initiatives led to a boost in gross profit margin and overall performance. The company's focus on sustainability was evident through the launch of a pilot electric vehicle scheme and a three-way crew plant to reduce distribution costs and carbon footprint. On the other hand, Dangote Cement showcased its commitment to expansion with new projects in Ogun State, Cote d'Ivoire, and Ghana, aiming to capture a larger market share in the Pan-African segment. The company's investment in additional capacity aligns with the projected growth in cement demand driven by infrastructure development and the AFCFTA agreement. Despite facing foreign exchange losses, both companies have implemented strategies to mitigate risks and optimize production costs. They remain resilient in the face of challenges such as FX volatility and inflation, with a focus on maintaining stable pricing to safeguard margins. The recent price cut by Bois Cement raised questions about sustainability and competitive pricing in the market. While Dangote and Lafarge have not signaled any price reductions, Bois Cement's move highlights the delicate balance between cost efficiency and margin protection in the cement industry. Looking ahead, industry players are expected to navigate market dynamics carefully, considering factors like inflation, pricing strategies, and infrastructure growth in the region.