By Kunal Bose
World trade in general was in tumult last year, thanks principally to the US introducing a series of highly punishing tariffs targeting one country after another which naturally invited retribution by affected countries. Thankfully, the tariff war didn’t cause any major changes to “seaborne cement and clinker trading routes or supply sourcing in 2025.” Whatever changes happened in trade flows were more due to geopolitical disturbances and “domestic supply and demand dynamics.” Global import and export trade flows of clinker and cement totalled around 230m tonnes last year in which the share of seaborne trade was in the range of 150m tonnes to 170m tonnes.
In spite of falling production, cement supply in China has continued to exceed demand. This along with falling prices has created compulsion for producers to sell growing quantities of cement and clinker in foreign countries at better prices than available locally. Exports surged 118% in 2025 to 11.71m tonnes, thanks to the industry’s proactive sales strategy, competitive pricing and overseas demand for Chinese products. The principal export destinations for Chinese cement and clinker are Southeast Asia, central Asia (Kyrgyzstan and Uzbekistan in particular) and some African countries. What comes to the aid of Chinese exports are the infrastructure projects funded under the Belt and Road Initiative (BRI) in a number of countries.
Export expansion certainly brought some relief to the Chinese industry. But cement groups beleaguered by massive capacity lying idle and under pressure from the government to do away with ageing, energy guzzling plants discovered that the only route of growth in the circumstances is to build cement profile abroad. Since the industry wanderlust falls in line with President Xi’s pet BRI programme, the industry is getting all support in building capacity in Africa and central and Southeast Asia. The countries where the Chinese industry has a footfall are all members of BRI and under that umbrella they are engaged in implementing infrastructure projects, some of which are massive.
A report says China has in operation more than 50 cement mills in over 20 countries in multiple continents – Africa, Asia and South America. The signing of an agreement late last year between China and Mozambique to build two cement factories in Mozambican provinces of Nampula and Cabo Delgado is one more instance of Beijing being aggressive in seizing investment opportunities in Africa. The two factories along with a jetty will involve an investment of $333m to be shared by two countries, but at what proportion is not disclosed. Chinese groups have remained engaged in expanding its asset base in Africa by both building greenfield mills and acquiring up to 100% equity of operating companies.
A few years ago, when Switzerland based Holcim made a decision to withdraw from non-core markets in order to focus on high value products and sustainable building solutions, its African assets came for disinvestment. As it would happen, Huaxin Cement of China acquired a significant portion of Holcim African assets, including 83.81% in Nigeria based Lafarge Africa PLC (since July 2015 Lafarge is part of Holcim through a merger.) Huaxin also bought 75% of Lafarge Zambia and entire equity in Lafarge Cement Malawi. Last year saw Huaxin completing the acquisition of 100% equity of Brazil’s Embu Sa Engenharia E Comercio. Besides Huaxin, the other major Chinese cement groups present abroad with manufacturing units are: China National Building Material (CNBM), West China Cement and Anuhi Conch Cement.
One thing common among the Chinese Cement Majors is their commitment to seize investment opportunities, particularly in Africa. An ideal condition for Chinese cement groups to rapidly capture space in Africa was created by divestment of African operations by the European industry. Besides turning their focus on sustainable building solutions, European groups, under cost pressure and prospects of growing imports need resources to build defences as also for decarbonisation and digitalisation. A good portion of the resources came from disinvestment in Asia and Africa. Interestingly, Indian groups though armed with strong balance sheets have so far not forayed in Africa either for exports or acquisition of cement assets.
Only recently, Sinoma Cement, a subsidiary of CNBM in partnership with China-Africa Development Fund completed the acquisition of Tunisia’s major cement company SocieteCiments De JBEL. In the meantime, West China Cement is pursuing acquisition of CILU Cement in Democratic Republic of Congo. China was early to realise that in view of its large capacities from steel to aluminium to cement, it is well placed to build the machinery sector in the downstream to first gradually reduce its dependence on imports from Western countries and then emerge as an exporter and an EPC (engineering, procurement and construction) contractor. For example, Simona International Engineering was the general contractor for West China Cement’s 4.5m tonne Lemi National Cement that was recently commissioned in Ethiopia.
It’s an open goal kind situation for the Chinese cement industry in Africa where Beijing through BRI is to help it earn political goodwill as it creates many economic opportunities. Implementation of infrastructure projects is creating enormous demand for raw materials, including cement. In some African countries local cement supplies are limited making opportunities for Chinese groups to invest in new cement mills. At the same time, there are instances of Chinese acquisitions of African cement companies followed by modernisation and capacity expansion. In both cases, machinery and equipment come from Chinese manufacturers and EPC is done by Chinese contractors.
Huaxin Cement always on the prowl to seize opportunities in any African country acquired South African and Mozambique assets of Inter Cement Participacoes SA in 2023 and since then added value to the business through modernisation. The company is also in control of Chilanga Cement in Zambia and Portland Cement Malawi. Expectedly a good amount of Chinese cement capacity is in the pipeline in some African countries, including Tanzania and Uganda with nearly all planning, engineering and machinery contracts going to Chinese companies.
Unlike China, only a few Indian cement groups have manufacturing operations abroad and their investment so far is largely in the Middle East and to some extent in Sri Lanka. UltraTech Cement, which is the world’s largest cement group outside China with capacity of 205.5m tonnes owns cement business in the UAE, Bahrain, Bangladesh and Sri Lanka. The combined capacity of all foreign operations of UltraTech is 5.4m tonnes.
A few years ago, UltraTech acquired majority ownership in Duqm Cement in Oman, thereby securing limestone mining leases. This is to take care of long-term requirements of its manufacturing operations in the Middle East and east Africa. The ongoing growth phase will lift UltraTech domestic capacity to 240m tonnes by 2028. Even though the company has not made any announcements about building new capacity abroad either through acquisition or greenfield ventures, analysts believe UltraTech, sitting on piles of reserves, will also remain on hunt for growth opportunities away from home.
The other Indian group with a significant production profile in the Middle East is Shree Cement with combined domestic and overseas capacity of 66.8m tonnes to be expanded to 80m tonnes by 2030. In early 2018, Shree Cement bought UAE based Union Cement Company at an enterprise value of $305.24m. Owners of Shree Cement, the Calcutta based Bangur family remains firm in the belief that cement business in the UAE will remain profitable as it will offer growth opportunities. Union Cement has clinker capacity of 3.3m tonnes and cement capacity 4m tonnes. The plant being located close to Saqr Port, it has the logistical and cost advantage of exporting cement to the Gulf, the Middle East and east Africa. Yet another large Indian cement group JK Cement is to build a clinker cum cement unit at Fujairah, part of the UAE, involving an investment of up to $400m in partnership with the Fujairah government. (IPA Service)
