DailySun
The expansion of Chinese cement factories in Africa is an undeniable trend. In 2023, we documented the initiation of nine new cement projects funded by Chinese investments across the continent, with five more expected to launch in 2024.
The gap between economic situations in China and Africa is driving this surge in cement investments. In China, the property sector is facing challenges, leading to cement consumption of just 60 million tonnes annually against a production capacity of 130 million tonnes. This surplus increases the bankruptcy risks for producers who lack robust export markets. Stringent environmental laws in China further discourage domestic cement production, pushing companies to relocate operations internationally.
As a result, Chinese enterprises are keenly seeking lucrative opportunities abroad, and Africa’s growing infrastructure needs align perfectly with this strategy.
While cement prices in China have plummeted to $41 per ton in 2023, prices in pivotal markets such as Ethiopia and the DRC have risen to $111 per ton.
Moreover, according to certain forecasts, Africa’s cement market is projected to grow from approximately $35 billion in 2024 to about $42 billion by 2030, demonstrating a compound annual growth rate (CAGR) of 4.7%. In contrast, China’s global cement production share is expected to decline from over 50% in the early 2020s to roughly 35% by 2030.
This increasing demand for cement is driven by a persistent construction boom across the continent, spurred by rapid urbanization, population growth, and existing infrastructure gaps. Countries like Ethiopia, Mozambique, and Rwanda are experiencing significant cement demand to support the building of roads, bridges, and housing projects. These developments align with the wider objectives laid out in the African Union’s Agenda 2063, which emphasizes industrialization and extensive cross-border infrastructure projects.
Leading Chinese Companies
West China Cement Limited is a key 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 per day, fulfilling half of the national demand. Developed in partnership with East African Holding within a Building Materials Industrial Park, it began production in September 2024 and exemplifies the scale of substantial Chinese investments in the industry.
In Rwanda, the Anjia Cement Factory, which represents a $50 million investment from West International Holdings, illustrates the feasibility of smaller-scale projects even in less populated markets. This facility aids Rwanda in achieving self-sufficiency in cement production and creates over 1,000 local jobs. Sinoma International Engineering and Huaxin Cement are also expanding their presence across the continent, investing in Tanzania, Zambia, South Africa, and Mozambique.
These firms benefit from strong policy support linked to China’s Belt and Road Initiative (BRI) and associated FOCAC funding. For instance, South Africa’s Mamba Cement plant, established in 2014, is a joint venture between Jidong Development Group (60%) and the China-Africa Development Fund (CAD Fund) (40%), primarily serving the local market. Important Chinese provinces with cement operators eager to expand abroad include Shaanxi, Xinjiang, and Guizhou. In March 2024, WCC’s Chairman, Zhang Jimin, remarked that the company’s African operations were the “major contributor of profits to the overall business last year.”
Sustainability and Scale Challenges
While the arrival of Chinese cement factories offers opportunities, it also brings several challenges. Environmental sustainability is a pressing concern, and a heavy reliance on Chinese investments for cement production could threaten the growth and stability of Africa’s domestic industries amid their economic struggles. Addressing these issues will require careful policy planning and coordination.
Despite Africa making significant strides as a global cement producer, it still lags behind China in scale. For example, Dangote Cement, Africa’s largest producer, boasts an annual production capacity of 52 million tonnes on the continent. In stark contrast, China’s largest cement producer, China National Building Material Co. Ltd. (CNBM), has a total capacity exceeding ten times that figure—530 million tonnes per year.
With nearly four times the land area of China but only 4% of the world’s existing infrastructure, there exists a compelling business case for African cement producers in regional hubs like Nigeria to match or surpass the operational scale of their counterparts in China.
The truth is that Africa’s infrastructure needs and ambitions lack sufficient backing from accessible, low-cost financing, which in turn constrains the cement market. Consequently, the commercial opportunities that do progress often focus merely on real estate developments targeting upper and middle-class consumers.
Although the findings indicate that Chinese cement producers recognize Africa’s potential more than many other foreign investors—who often lack an understanding of rapid urbanization and infrastructure development—such engagements remain limited and do not fully realize their potential, especially from a developmental perspective.
Capitalizing on the Opportunity
So, what are the next steps to take advantage of this opportunity?
Two pivotal actions are essential: one aimed at achieving immediate outcomes and the other focused on mid-term results.
Firstly, it’s clear that Chinese cement producers will continue to seek both greenfield and brownfield investment opportunities in Africa. African governments should actively market their nations—particularly special economic zones—as investment hotspots directly to major cement enterprises in China. To harness the full benefits of these investments, Chinese companies must prioritize sustainable production methods to mitigate reputational risks and align with China’s aspirations for a more eco-friendly Africa-China future. Facilities leveraging Chinese technology have already achieved sustainability advancements in domestic cement production, resulting in emissions reductions of over 50% in some instances.
Secondly, collaboration between African governments and both African and Chinese financial institutions is essential to unlock Africa’s growing infrastructure demands—especially in large-scale cross-border projects. African institutions like AfDB, Afreximbank, AFC, and Shelter Afrique are taking the lead in financing cement plants or infrastructure projects that will increase cement demand. On the Chinese side, China Eximbank, CADFUND, CAFIC, Silk Road Fund, CDB, along with China-based multilateral organizations such as NDB and AIIB, play significant roles. The latter, in particular, holds the potential for innovative financing solutions for regional infrastructure development, further bolstering initiatives like the AfCFTA and the AU’s Agenda 2063.
In summary, the data illustrates 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 equilibrium tilts towards Africa is crucial and offers a pathway for millions of Africans to escape poverty through extensive infrastructure investments. Our view on cement is that attaining this will require deliberate strategies and innovation. Nevertheless, it is certainly plausible—China itself exemplifies this potential.
