KEY POINTS
- Holcim shifts focus to high-growth markets and sustainability, preparing for a U.S. listing in 2025.
- Huaxin Cement solidifies its African footprint, building on acquisitions in Zambia, Malawi and South Africa.
- Holcim invests in low-carbon tech and infrastructure, achieving a $1.9 billion operating profit in Q3 2024.
Holcim, the Swiss cement leader, is exiting its stake in Lafarge Africa by selling 84 percent of the company to China’s Huaxin Cement for $1 billion.
The strategic move is part of Holcim’s broader plan to streamline its operations and prioritize markets with higher growth potential, particularly as it prepares for a U.S. listing of its North American business set for 2025.
Sustainability push
The sale, which is pending regulatory approval and expected to close in 2025, underscores Holcim’s shift towards more lucrative markets.
While the company did not elaborate on the rationale behind the deal, it aligns with broader strategic realignments initiated in the past year, focusing on high-margin, sustainable ventures.
Huaxin Cement’s strategic African acquisitions
For Huaxin Cement, the acquisition is another step in its aggressive expansion strategy across the African continent. The Chinese cement manufacturer has already secured key positions in several African nations, including a 75% stake in Lafarge Zambia and the full acquisition of Lafarge Cement Malawi in 2021. It further solidified its African presence by purchasing South Africa’s Natal Portland Cement in 2023.
These moves, as reported by Reuters are in line with Huaxin’s ambition to be a global leader in innovative and sustainable building solutions, leveraging its footprint in core markets like Africa to expand its influence.
Holcim focuses on sustainable growth and infrastructure investments
Holcim’s strategic pivot also includes a greater emphasis on sustainability. The company continues to concentrate on higher-margin products and infrastructure projects, while bolstering its environmental footprint.
In September 2024, Holcim took a stake in the U.S.-based tech startup Sublime Systems, which is pioneering low-carbon cement solutions, further reinforcing Holcim’s commitment to reducing the environmental impact of its operations.
The company’s financial performance has reflected the success of this shift. In the third quarter of 2024, Holcim reported a recurring operating profit of 1.67 billion Swiss francs ($1.90 billion), exceeding analyst expectations and signaling the success of its strategic overhaul.
Holcim’s exit from Lafarge Africa and its refocused investment strategy illustrate a decisive move towards higher-growth, more sustainable markets, as the company prepares for its next phase of growth and global expansion.
