Nowadays, the market of building materials in developed areas of the world is increasingly saturated. Africa is rich in resources. As an emerging market, it has been paid more and more attention by building materials enterprises. The following three factors give birth to the huge development potential of African building materials industry:
1. Fast growing population and urbanization process
By the end of 2016, Africa’s population has exceeded 1.2 billion, and solving the housing problem has become the current challenge, which also provides opportunities for investment in residential and commercial real estate.
2. Lack of infrastructure
Although African countries have been striving for infrastructure construction, the current traffic situation in Africa is poor, and more infrastructure such as railways, roads and ports are still needed. African governments have also invested more and more funds in infrastructure construction, which provides a strong driving force for the sustainable growth of building materials industry in Africa.
3. Serious shortage of office space
Taking the Kenyan market as an example, the demand for office space is a key driver of the Kenyan construction industry. Many multinational enterprises that are committed to developing their business in Africa regard Kenya as an ideal destination for setting up their headquarters in Africa, which also makes Kenya face a serious shortage of office space. Some companies, such as UAP, rahimtulla and fosroc, even rent and sell part of their office buildings to other companies. Nevertheless, Kenya is still unable to meet the demand of more and more multinational companies for local office space.
In 2019, the distribution of construction projects in Africa, southern Africa accounted for the largest proportion, the corresponding market demand for building materials is also the largest. According to the report, there will be 119 construction projects in southern Africa in 2019, with a total value of about US $145 billion; Northern Africa accounted for the smallest proportion, about 9.116 billion US dollars.
Nigeria building materials market
Nigeria’s current construction industry is worth about 69 billion US dollars, and its employees account for 5% of the 186 million local population. Along with the economic growth, the government’s support policies and the expanding middle class have brought huge business opportunities for Nigeria’s building materials market to varying degrees.
Nigeria’s local building materials market is in the early stage of development, and there is a lack of international suppliers. The local government actively promotes the construction of various infrastructures, including commercial, industrial and residential structures. It is bound to need a lot of construction machinery and equipment, which undoubtedly provides powerful opportunities for international suppliers who are committed to exploring the African market.
Nigeria’s domestic attention to infrastructure construction is increasing, and the demand for cement, steel and other building materials is sharp, especially the demand for cement has increased from 18 million tons to 40 million tons. Less than one third of Nigerian local suppliers lead to high cement prices, which seriously affects the development of the construction industry.
As early as 2010, an analysis report issued by the authoritative organization Global Architecture prospects predicted that the building materials market in Nigeria will develop rapidly in the next 10 years. At present, the growth rate of the construction market in Nigeria has surpassed that of India, second only to China. The analysis report also points out that Nigeria has a population of 186 million, which has become one of the countries with the fastest population urbanization in the world. However, the construction industry accounts for only 3.2% of GDP, which is far from meeting the domestic housing demand. It can be predicted that from 2009 to 2020, Nigeria will have a higher growth rate than China in the construction industry and become the largest construction market in the world, The potential is unlimited.
In 2019, China’s total export value of African building materials products (mainly 25, 3922, 68, 69 and 7016 categories) is about US $1.357 billion. Among them, South Africa, Nigeria, Algeria, Kenya, Ghana, Egypt, Senegal, Djibouti, Tanzania and Angola are the top 10 markets for China to export building materials products to Africa.
The high demand and rapid development of African building materials industry are mainly driven by development and consumption factors.
In terms of development, if Africa wants to seek sustainable development, it is bound to vigorously develop infrastructure, build roads to connect, promote people’s livelihood to support society, and build industries to honor economy, which will naturally greatly promote the development of African building materials industry.
In terms of consumption, with the advancement of urbanization in Africa, the growth of the middle class and the global focus on Africa, more and more international investors have entered Africa, which has given birth to the prosperity of commercial real estate and residential real estate industry in Africa, as well as the prosperity of the upstream building materials industry in real estate.