Nigeria has leapfrogged South Africa as the biggest cement manufacturer in sub-Saharan Africa, making it the third-largest in the broader Middle East, only lagging behind Egypt and Saudi Arabia, a 2013 research by Renaissance Capital has revealed.

Nigeria’s current industry capacity surpassed the 20 metric tons per annum  mark, reaching 28 metric tons, well above South Africa’s production of 18.3 metric tons per annum, BusinessDay quoted the Renaissance research report.

The research also shows that cement consumption has remained strong in the country, growing from 14.8 metric tons in 2009 to 18.3 metric ton in 2012. The momentum has been maintained into 2013 despite the negative impact of flooding that occurred in late 2012.

This strong performance has also been mirrored in the cement companies’ share prices, with combined returns from a portfolio of the four listed stocks, Dangote Cement, Lafarge WAPCO, Ashaka, and Cement Company of Northern Nigeria , returning 50.2 percent  this year, compared to a 36.6 percent gain in the NSE All Share Index.

This milestone is attributed to the convivial environment in which cement manufacturers operate, as well as increased economic activities that have characterized the country’s market in recent times.

“The Nigerian cement market has changed significantly, driven by favorable government regulation, rising demand, and increased investment on the back of aggressive economic growth,” said Renaissance Capital research team led by David Nangle.

The implementation of the Backward Integration Policy (BIP) in the country has also seen the cement industry’s production base grow by over 95 percent between 2005 and 2012. This increase was led by Dangote Cement (from 8.00mnt to 19.25mnt), followed by Lafarge WAPCO (from 2.0mnt to 4.5mnt).

Renaissance Capital said this had encouraged on-going expansion projects by a number of players, possible increase in capacity to 50 metric tons per year by 2017, and opening vistas of opportunities for investors.

“We are optimistic about the sustainability of Nigerian cement demand in the long term, given the quickened pace of socio-economic development currently being experienced in the country. This is also backed by the strong potential presented by the poor state of the country’s housing and road infrastructure,” the Renaissance Capital said.