Nigeria/South Africa: Gas shortages in Nigeria significantly impaired Lafarge Africa’s performance in 2016 in addition to local currency devaluation and a recession. Overall the group’s sales, which include those in South Africa, fell by 18% year-on-year to US$716m in 2016 from US$871m in 2015. Its operating earnings before interest, taxation, depreciation and amortisation (EBITDA) fell by 57% to US$94.6m from US$219m. Despite these problems the cement producer’s results rallied in the fourth quarter of the year, aided by changes in fuel supplies and other cost savings.

“Our turnaround plan delivered solid results in the fourth quarter of 2016 in spite of the challenging environment in Nigeria and South Africa. Technical challenges have been resolved with all our plants operating at high reliability. Our energy optimisation plan has proved successful with increased use of alternative fuel to offset gas shortages,” said Michel Puchercos, the chief executive officer of Lafarge Africa. He added that the Mfamosing line 2 is now operational and contributed to cement production in the fourth quarter of 2016. The new line is expected to enhance cost reductions in 2017.

By region, the group’s cement sales volumes in Nigeria fell by 15.4% to 5.29Mt in 2016 from 6.26Mt in 2015. A similar decline in sales volumes was also reported in the fourth quarter. The cement producer declined to provide detailed information on its operations in South Africa saying that the operating environment was challenging and ‘highly’ competitive. It did report that sales volumes of cement fell by 8% in 2016.