Lafarge Africa sets ambitious target to increase profit and decrease debt

Company chair Mobolaji Balogun wants this done by 2020 so the company can resume its expansion plans.

Africa’s second-biggest cement producer, Lafarge Africa Plc, the African unit of Switzerland-based LafargeHolcim, has said it wants to take advantage of improvements in the Nigerian economy and a recovery in South Africa to expand and boost profit.

The company’s chair, Mobolaji Balogun (pictured), has said:

“As soon as the debt becomes more comfortable, we don’t sit there, we will put the foot down on the next round of expansion.”

Balogun says the African subsidiary’s total debt dropped to around $600 million from more than $1 billion after using funds, including the proceeds of a 131 billion naira ($361.7 million) rights offer, to curb liabilities. He further noted that the company incurred debt to expand capacity at its cement plant in Calabar, southeast Nigeria, and plans to add more production in the short-to-medium term to plants in the southwest and the north.

According to Bloomberg, the company sees earnings before interest, taxes, depreciation and amortization more tolerable at about $200 million this year.