Lafarge Cement of Nigeria Falls Most in 4 Years on OversupplyVincent Nwanma
Lafarge Cement WAPCO Nigeria Plc, the second-biggest producer of the building material by market value, declined the most in more than four years after a newspaper reported it may halt output because of product oversupply.
The stock fell for a fourth day, declining 5.2 percent to 52.12 naira by the close in Lagos, Nigeria’s commercial capital. That’s the largest drop since Oct. 31, 2008, according to data compiled by Bloomberg.
Lafarge may shut production in response to a glut in the country’s cement market, Punch newspaper reported on Dec. 31, citing Plant Manager Lanre Opakunle. The Ewekoro, southwestern Nigeria-based company has already cut output by half, the newspaper cited him as saying.
The excess supply is affecting all Nigerian cement companies, David Adonri, chief executive officer of Lambeth Trust and Investment Co., said by phone from Lagos. “I expect it to be a temporary setback that will be addressed soon by the government.”
Dangote Cement Plc, Nigeria’s biggest company by market value and Africa’s largest producer of cement, shut its Gboko plant in central Benue state because of a glut in the market from cheap imports, it said on Dec. 6. Dangote’s shares were unchanged at 125 naira.
Lafarge WAPCO, a unit of the world’s biggest cement producer Lafarge SA took loans worth 45 billion naira ($287 million) to expand its plant.
The stock has fallen 11 percent in 2013, compared with a 1.4 percent rise in the Nigerian Stock Exchange All-Share Index.