Nigeria’s cement manufacturing sector faced a staggering rise in operational costs in 2024, with energy expenses soaring to ₦1.12 trillion an 87.4% jump from ₦598.14 billion recorded in 2023. The increase, driven by currency depreciation and inflation, is squeezing profit margins despite strong revenue growth across industry leaders.
Financial data from Dangote Cement Plc, BUA Cement Plc, and Lafarge Africa Plc compiled from audited and unaudited reports by THE WHISTLER revealed that energy costs alone accounted for 21.75% of the industry’s total revenue of ₦5.15 trillion in 2024, up from ₦3.06 trillion the previous year.
Energy expenses also represented 43.64% of the combined ₦2.57 trillion cost of sales for the three companies underscoring how critical power and fuel inputs remain to cement production.
The companies attributed the spike in costs to the continued depreciation of the naira, persistent inflation, and macroeconomic reforms such as the removal of fuel subsidies and the unification of exchange rates. These factors have sharply driven up the prices of imported raw materials and energy sources most of which are dollar denominated.
Despite these headwinds, Nigeria’s leading cement producers recorded robust topline growth. Dangote Cement Plc, Sub-Saharan Africa’s largest cement firm, posted a profit before tax of ₦732.54 billion for the 2024 financial year a 32.4% increase over 2023. Its revenue surged by 62.2% year-on-year to ₦3.58 trillion, buoyed by strong domestic demand for cement and clinker.
However, the company’s cost of sales rose even faster, climbing by 63.3% from ₦1.01 trillion to ₦1.64 trillion representing nearly 46% of total revenue.
Industry analysts warn that unless macroeconomic stability is restored, rising input costs could erode future gains and place additional pressure on infrastructure development and housing delivery sectors heavily reliant on affordable cement.
