As part of its move to exit Nigeria, a Swiss building materials company, Holcim, has agreed to sell its Nigerian business to a Chinese firm, Huaxin Cement Limited.
According to a statement, the deal, valued at $1 billion, would lead to the sale of Holcim’s 83 per cent stake in Lafarge Africa.
Lafarge Africa Plc is a member of the Holcim Group — a maker of roofing and other housing products, such as cement, aggregates for construction and ready-mix concrete.
The company said the agreement had been signed, noting that the transaction is expected to close next year.
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“Holcim has signed an agreement with Huaxin Cement Ltd to sell its entire 83.81% shareholding in Lafarge Africa Plc, at an equity value of $1 billion on a 100% basis.
“The transaction is expected to close in 2025, subject to customary and regulatory approvals,” the statement reads.
However, Holcim is silent on reasons for its exit.
Daily Trust reports that a number of companies have recently announced their exit from Nigeria rising inflation, which has eroded purchasing power of Nigerians.
In October, South African grocery retailer Pick n Pay sold its 51 per cent stake in a joint venture ahead of its exit from the Nigerian market.
CEO Sean Summers announced the decision as part of a broader restructuring strategy outside its home market.
Pick n Pay, which entered Nigeria less than five years ago through a partnership with A.G. Leventis, currently operates two stores in the country.
The grocery retailer braved the odds to enter the Nigerian market four years ago when other giants in the retail industry had planned to exit the country.
Consumer goods companies have been blighted by inflation, which has eroded the purchasing power of Nigerians coupled with significant depreciation of the Naira.
In June 2024, another South African retailer- Shoprite announced the closure of its Abuja store citing harsh business climate in Nigeria, which has negatively impacted its financials.
The closure of Shoprite’s business in Abuja in June follows a similar closure of Shoprite’s store in Kano in January 2024.
In 2023, three pharmaceutical companies exited Nigeria.
Profitability remains a significant challenge for many retail operators managing supermarkets, discount stores, and grocery outlets across Nigeria.
The rising cost of operations and persistent inflationary pressures are pushing numerous companies, including small and medium-sized businesses, out of the market.
Earlier, Jumia announced the complete shutdown of its food delivery arm, Jumia Food, in Nigeria, citing a difficult business environment and challenges in achieving sustainable profitability.
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