Chinese cement firms look for boom in African construction to make up for woes at home

Major cement producers see higher prices – and profits – in countries such as DRC, Mozambique and Ethiopia amid China’s property crisis

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In Ethiopia, the Addis Ababa urban renewal project highlights the need for cement in Africa, and opportunities for Chinese cement companies. Photo: AFP

Published: 4:00pm, 20 Aug 2024Updated: 6:09pm, 20 Aug 2024

Chinese cement makers are looking to growth potential in Africa to make up for a shrinking domestic market amid a protracted property crisis and slow economic recovery at home.

Thanks to its investment in Ethiopia, the Democratic Republic of the Congo (DRC) and Mozambique, major cement producer West China Cement Limited said its African operation was the major contributor of profits to the overall business last year.

“High quality development in Africa will be a major focus in 2024 and beyond,” chairman Zhang Jimin said in March.

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Both the average selling prices and profit margins were higher in its African plants than its domestic business, according to the company’s annual earnings report.

Prices at its Chinese operation stood at 292 yuan (US$41) per tonne in 2023, far below the 813 yuan (US$813) produced by its African plants.

As a result, the gross profit at its Mozambique operation is 358 yuan per tonne, and even more in the DRC (509 yuan) and Ethiopia (504 yuan) – much higher than the 44 yuan of its China operation.

“It justifies the company’s expansion into the region,” said Hu Huiling, senior analyst at REDD Intelligence.