Ashaka Cement Plc
The shares of Ashaka Cement Plc, subsidiary of Lafarge SA, fell by five per cent at the stock market, the highest fall in seven weeks as holders reacted to Dangote Cement Plc’s decision to shut down its Gboko cement plant, citing a supply glut in parts of the country.
Ashaka Cement shares declined by 95 kobo from N19 to close at N18.05 per share.
Bloomberg news reported that about 1.4 million shares, or double the three-month moving average, traded..
Dangote Cement, Africa’s biggest producer of the building material, shut its plant in Gboko in central Nigeria because an influx of imported cement had made it uneconomical to continue producing, the spokesman for the company, Anthony Chiejina, said yesterday.
The country’s southeast served by the Gboko plant has seen a “massive importation and dumping of low-quality, cheap cement,” he said.
“The news of a glut in the market could have led to the sell-off on Ashaka,” Head of Research at Lagos- based Vetiva Capital Limited, Pabina Yinkere, said.
“ Dangote’s shares were unchanged probably because Gboko “is the smallest of its plants, Yinkere said.
Dangote has the capacity to produce 19.25 million metric tons of cement a year, to which the closed plant contributed 4 million tons.
Ashaka’s net income for the nine months through September rose to N3.7 billion from N2.46 a year earlier, the Gombe, Northern Nigeria-based company disclosed in October. Revenue rose stood at N16.5 billion from N15.8 billion..
However, Ashaka’s price has risen 60 per cent this year, compared with a 28 per cent increase in the Nigerian Stock Exchange All-Share Index.