…Cordros identifies road construction projects as a key driver of cement volume in 2025, given FG’s intensified efforts in mobilizing CAPEX funding through various infrastructure-focused schemes
MON MAY 19 2025-theGBJournal| Cement sector operators are set to benefit from sustained construction and infrastructure activity, with additional support from relative currency stability and stronger operational efficiency, says investment analyst Cordros Research in latest report on the Industrial Goods Sector (Cement).
”We believe the sector is positioned for solid growth in 2025E, supported by resilient demand, pricing strength, improved cost dynamics, and a more stable macroeconomic backdrop.”
While risks around fiscal policy execution and regulatory oversight persist, Cordros believe the sector is transitioning into a more stable and fundamentally driven phase.
Across Cordros coverage, they maintain a “BUY” rating for Lafarge Africa Plc (WAPCO; N104.71/share), supported by a strong revenue outlook, anticipated EBITDA margin expansion, low leverage, and a healthy balance sheet.
Meanwhile, the investment analytical firm upgraded Dangote Cement Plc (DANGCEM; N542.98/share) to a “BUY” rating, reflecting their expectations for EBITDA margin expansion, a decline in FX losses and earnings acceleration.
Lastly, BUA Cement Plc (BUACEMENT; N75.87/share) was upgraded from “SELL” to “HOLD” given expectations of subdued cost growth, EBITDA margin expansion, and lower FX losses.
Cordros identifies road construction projects as a key driver of cement volume in 2025, given FG’s intensified efforts in mobilizing CAPEX funding through various infrastructure-focused schemes, such as the Renewed Hope Infrastructure Development Fund (RHIDF), the Highway Development and Management Initiative (HDMI), the Presidential Infrastructure Development Fund (PIDF), and the Road Infrastructure Tax Credit Scheme (RITC).
”These platforms have been instrumental in de-risking capital deployment and enabling Public-Private Partnerships (PPPs) for large-scale road projects, with an increasing shift toward concrete road technology following FG’s directive in 2023.”
As of February 2025, N4.20 trillion has been approved for major road and bridge works in 2025, including N1.33 trillion for a section of the Lagos-Calabar Coastal Highway covering 130.00 km.
”While we acknowledge that implementation gaps may persist, we anticipate stronger execution under the Public-Private Partnership (PPP) framework, reinforced by stricter contract enforcement mechanisms.”
Besides, ongoing infrastructure projects is expected reinforce demand upside.
The federal government’s project pipeline includes several large-scale initiatives such as the 203.00 km Kano–Kaduna standard gauge railway, the 614.00 km Ajaokuta Kaduna–Kano (AKK) gas pipeline, Gurara II hydroelectric power station, UTM offshore floating LNG plant, and the Bakassi deep seaport.
To fund these projects, the government is leveraging a growing mix of bilateral and multilateral financing.
Most recently, China’s Development Bank disbursed USD255.00 million toward the USD973.00 million Kano–Kaduna Railway project, while the Cross River State Government secured USD3.50 billion from AFREXIM Bank for the Bakassi deep seaport project.
Increased capex allocation is also a major boost, but implementation risks remain. The FG’s 2025 budget also emphasises infrastructure-led growth, with capital expenditure (capex) allocation rising to N23.40 trillion, a 69.9% y/y increase from N13.77 trillion in 2024. However, actual implementation remains a concern.
The real estate sector is equally poised for a measured rebound in 2025. ”We believe the real estate sector may emerge as a quiet outperformer in 2025, driven by a resurgence in both public and private investments,” Cordros said.
Cordros Research reckons the industry is likely to shift from aggressive price increases to a more measured pricing strategy, reflecting easing inflation, relative FX stability, and sustained regulatory pressure on price controls.
They forecast an average price increase of 22.7% y/y across major players, significantly below the 54.3% jump recorded in 2024.
Meanwhile, in the retail market, cement prices have averaged between N8,000.00 and N10,500.00 per 50kg bag (Jan–Apr 2025), depending on location (2024FY avg. N7,500.00 – N9,500.00), despite the govt’s persistent but largely ineffective efforts to cap prices at the N7,000.00 – N8,000.00 band.
Looking ahead, Cordros believe prices will remain within a tight band and are unlikely to breach N11,500.00, assuming a relatively stable macroeconomic environment.
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