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Lafarge Africa mulls expansion, invests 7.3m swiss francs in Nigeria

Lafarge Africa mulls expansion, invests 7.3m swiss francs in Nigeria

Considering the investment in social and economic infrastructure that would be required to lift the Nigerian economy from the slowdown which the new coronavirus pandemic has pulled it into, Lafarge Africa is exploring road construction and affordable housing as new revenue streams going forward.

Chief Executive Officer, Khaled El Dokani, said in an interview that Nigeria’s second largest cement maker is already in talks to stimulate infrastructure development, particularly the construction of roads across the country.

“We have signed a memorandum of understanding to establish a 20-kilometre road project in Cross Rivers State as a sustainable solution given the weather conditions in the area,” said El Dokani.

The agreement is part of a broader agreement with the Cross River State government to build a 38-kilometre concrete road connecting its local cement plant to the wider network. The road is designed to divert trucks away from Calabar city traffic.

Read also: Lafarge Africa grows profit by 3.4% in Q3 2020

El Dokani argued that the swampy topography of Southern Nigeria is not suitable for asphalt roads. As a result, Lafarge Africa is seeking to deploy its concrete road construction solutions in the area. Asphalt is widely considered as a cheaper option for road pavement compared to concrete even though concrete roads are more durable and environment-friendly.

LafargeHolcim, the parent company of Lafarge Africa and the world’s largest building and construction material company, is at the forefront of supplying critical building materials for the construction of roads, bridges and other infrastructure in Asia, Europe and America.

In addition, El Dokani said that Lafarge is aiming for entry into the construction of affordable housing through partnerships with established home builders. He said that his company is hoping for a review in the subsisting construction code to reflect technological advancements in construction methods.

According to the CEO, a review of the code will stimulate the participation of cement makers like Lafarge in the building imdustry.

“We already have the knowhow, expertise and technology that puts us in a position to be much quicker in penetrating this area (affordable housing),” said El Dokani who added that he hopes that more robust guidelines will be finalized and approved by next year.

Slow economic growth over the last five years has seen cement production capacity outpace local demand in Nigeria. According to El Dokani, installed capacity is currently double demand.

Cement makers are therefore exploring or executing options to diversify away from supplying cement as a building material. However, El Dokani said that he expects demand to pick up as economic conditions improve.

In the meantime, Lafarge Africa Plc is also seeking to improve its operational efficiency and positive environmental impact. El Dokani noted the company’s increasing usage of biomass, such as oil palm and rice husks, as alternative fuels to power its plants.

Cement plants in Nigeria are usually powered by low pour fuel oil, gas or coal but alternative fuels are considered cleaner, more sustainable, and also helps surrounding communities dispose of waste more efficiently.

According to El Dokani, the Lafarge Africa’s target is to have alternative fuels account for 35 percent of the energy needs of all plants by 2023. At the moment, alternative fuels account for up to 40 percent of fuel used to power its Ewekoro plant. The chief executive said that a transition to alternative fuels could lead to a 30 percent reduction in current fuel cost.

Lafarge Africa is also investing 7.3 million Swiss Francs to modernize a production line at its Ewekoro plant. This is in line with its commitment to continuous improvement and to sustain environmentally friendly and sustainable operations.

El Dokani said that the upgrade of the plant will require a six-month stoppage of production at the line. The upgrade is aimed to eliminate dust emissions from the line. The CEO said that the company will increase production at other lines to compensate for the production stoppage at Ewekoro Line I.

In its results for the nine months up to September 2020, Lafarge Africa reported a 10.3 percent rise in turnover. However, sales in the second and third quarters lagged sales in the first quarter of the year.