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Chinese Cement Companies Strengthen Presence in Africa

The growth of Chinese cement factories in Africa is an undeniable trend. In 2023, we recorded nine new cement projects backed by Chinese investments in Africa, with an additional five anticipated in 2024 so far.

The discrepancy between economic conditions in China and Africa is fueling this increase in cement investments. In China, the property market is struggling, with cement consumption at 60 million tonnes annually, compared to a production capacity of 130 million tonnes. This surplus heightens bankruptcy risks for producers lacking strong export markets. Strict environmental regulations in China further deter local cement production, prompting companies to move operations overseas.

Consequently, Chinese firms are actively pursuing lucrative opportunities abroad, and Africa’s increasing need for infrastructure fits this strategy seamlessly.

While cement prices in China dropped to $41/ton in 2023, prices in critical markets like Ethiopia and DRC surged to $111/ton.

Additionally, according to some projections, Africa’s cement market is expected to grow from around $35 billion in 2024 to approximately $42 billion by 2030, reflecting a compound annual growth rate (CAGR) of 4.7%. In contrast, China’s share of global cement production is predicted to decline from over 50% in the early 2020s to about 35% by 2030.

This escalating demand for cement is driven by an ongoing construction boom across the continent, fueled by rapid urbanization, population growth, and existing infrastructure deficits. Nations such as Ethiopia, Mozambique, and Rwanda are witnessing substantial demand for cement to support the construction of roads, bridges, and housing projects. These developments align with broader goals outlined in the African Union’s Agenda 2063, which emphasizes industrialization and extensive cross-border infrastructure initiatives.

Key Chinese Players

West China Cement Limited stands out as a prominent player, operating in Ethiopia, Mozambique, the DRC, and Rwanda. In Ethiopia, WCC’s $600 million Lemi National Cement Factory, the largest in the country, produces 15,000 tonnes of cement daily, satisfying half of the national demand. Developed in collaboration with East African Holding within a Building Materials Industrial Park, it commenced production in September 2024 and illustrates the scope of large-scale Chinese investments in the sector.

In Rwanda, the Anjia Cement Factory, a $50 million investment from West International Holdings, showcases the viability of smaller-scale projects even in less populous markets. This facility aids Rwanda in achieving self-sufficiency in cement production while generating over 1,000 local jobs. Sinoma International Engineering and Huaxin Cement are also broadening their reach across the continent, investing in Tanzania, Zambia, South Africa, and Mozambique.

These firms benefit from robust policy support connected to China’s Belt and Road Initiative (BRI) and related FOCAC funding. For example, South Africa’s Mamba Cement plant, established in 2014, is jointly owned by Jidong Development Group (60%) and China-Africa Development Fund (CAD Fund) (40%), primarily catering to the local market. Important provinces in China with cement operators eager to expand overseas include Shaanxi, Xinjiang, and Guizhou. In March 2024, WCC’s Chairman, Zhang Jimin, stated that the company’s African operations were the “major contributor of profits to the overall business last year.”

Sustainability and Scale Challenges

While the influx of Chinese cement factories brings opportunities, it also comes with several challenges. Environmental sustainability poses a concern, and an overdependence on Chinese investments for cement production could jeopardize the growth and stability of Africa’s domestic industries amid their struggling economies. Tackling these issues will necessitate thoughtful policy planning and coordination.

Nevertheless, although Africa is making considerable advancements as a global cement producer, it still significantly lags behind China in terms of scale. For instance, Dangote Cement, Africa’s largest cement producer, boasts an annual production capacity of 52 million tonnes across the continent. In stark comparison, China’s largest cement producer, China National Building Material Co. Ltd. (CNBM), has a total capacity exceeding ten times this amount—530 million tonnes per year.

With nearly four times the land area of China but only 4% of the world’s existing infrastructure, there is a strong business rationale for African cement producers in regional hubs like Nigeria to match or exceed the scale of those in China.

The reality is that Africa’s infrastructure demands and ambitions are not adequately supported by accessible, low-cost financing, which, in turn, stifles the cement market. Consequently, the only commercial opportunities that progress unhindered often involve real estate developments aimed at upper and middle-class consumers.

Although the data highlights that Chinese cement producers recognize the potential within Africa more than many other foreign investors—who lack familiarity with rapid urbanization and infrastructure development—such engagements remain constrained and do not reach their full potential, particularly from a developmental standpoint.

Seizing the Opportunity

So, what are the next steps to capitalize on this opportunity?

Two key actions are essential: one aimed at achieving immediate outcomes, and the other focused on medium-term results.

First, it is certain that Chinese cement producers will continue to explore both greenfield and brownfield investment opportunities in Africa. African governments should actively promote their countries—particularly special economic zones—as investment destinations directly to major cement firms in China. To maximize the benefits of these investments, Chinese companies must prioritize sustainable production practices to reduce reputational risks and align with China’s commitments towards a more environmentally friendly Africa-China future. Facilities utilizing Chinese technology have already facilitated sustainability improvements in China’s domestic cement production, achieving reductions in emissions by over 50% in some cases.

Second, collaboration between African governments and both African and Chinese financial institutions is crucial to unlock Africa’s burgeoning infrastructure demand—particularly in large-scale cross-border projects. On the African side, institutions like AfDB, Afreximbank, AFC, and Shelter Afrique are taking the lead in financing cement plants or infrastructure projects that will drive up cement demand. On the Chinese side, China Eximbank, CADFUND, CAFIC, Silk Road Fund, CDB, alongside China-based multilateral organizations like NDB and AIIB, have important roles to play. The latter, in particular, holds the potential for innovative financing solutions for regional infrastructure development, further supporting initiatives like the AfCFTA and the AU’s Agenda 2063.

Overall, the data reveals a reality we at DR frequently observe in Africa-China relations: the mutually beneficial economic equation that expanding African markets often present for Chinese firms. However, ensuring that this balance of benefits skews towards Africa is critical and presents an opportunity for millions of Africans to escape poverty through large-scale infrastructure investments. Our perspective on cement is that achieving this will necessitate deliberate strategies and innovation. Yet, it is certainly achievable—China itself exhibits this potential.

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