Dangote Cement Plc, BUA Cement Plc, and HBM Nigeria Plc are increasingly focusing on expanding their green logistics as part of broader efforts to protect profit margins, improve product availability, and strengthen their reach across Nigeria’s construction market.
The shift reflects the growing importance of transportation in cement manufacturing, where the cost of moving heavy products from factories to distributors, retail outlets, and construction sites can significantly influence manufacturers’ operating expenses and final selling prices.
BUA Cement is among the manufacturers adopting alternative transportation solutions, introducing liquefied natural gas (LNG)-powered trucks as part of its efforts to reduce logistics expenses and improve market penetration.
In its nine-month 2026 financial results, the company said savings from the introduction of LNG-powered trucks, alongside lower operations and maintenance charges, contributed to improvements in its gross profit and earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins, which rose by seven and 6.3 percentage points to 57.1 percent and 52.7 percent, respectively.
The company also attributed its stronger commercial performance to adding bulk customers and further restructuring its logistics operations.
Yusuf Binji, managing director and chief executive officer of BUA Cement, said the acquisition of LNG trucks would support market penetration and operational efficiency while reducing the company’s environmental footprint.
“The LNG trucks are eco-friendly, thus reducing our carbon footprint on the environment while harnessing the country’s abundant gas reserves. This investment will also enhance market penetration and operational efficiency. Energy costs were elevated during the quarter due to supply constraints but have since normalised,” he said.
The investment comes amid difficult operating conditions, including heavy rainfall and poor road infrastructure, which the company identified as challenges to its distribution activities during the period.
BUA said it would continue pursuing profitable partnerships with distributors and reducing its cost to serve customers as it enters the final quarter of the year.
Dangote Cement is also increasing its focus on distribution infrastructure, including investments in distribution trucks and energy-efficient logistics.
The company’s nine-month 2026 financial statements show that capital expenditure formed part of a broader investment programme covering new production facilities, distribution trucks, and energy-efficiency improvements.
The manufacturer, which operates cement plants across Nigeria, also maintains an extensive distribution network supported by its fleet of more than 5,000 trucks and strategically located depots, enabling it to supply distributors and deliver directly to customers’ construction sites.
Its investment in logistics is becoming increasingly important as the company expands its domestic and regional distribution activities.
Dangote Cement’s Nigerian sales volumes increased 6.4 percent to 14.1 million tonnes in the nine months ended September 2026, while cement and clinker exports rose 41.8 percent to 1.5 million tonnes.
According to Dangote Cement’s financial statements, higher haulage expenses were a major contributor to the increase in its selling and distribution expenses, highlighting the pressure manufacturers face in transporting cement amid higher fuel and operating costs.
The company’s selling, distribution, and administrative expenses increased 20.2 percent to N845 billion during the period, largely driven by higher haulage expenses.
This suggests that even as manufacturers improve production efficiency, transportation remains a significant source of cost pressure, particularly with higher fuel prices and the need to move products across geographically dispersed markets.
Dangote Cement’s logistics investments are also extending beyond Nigeria. The company commissioned 500 compressed natural gas (CNG) trucks in Tanzania in September and introduced a mobile refuelling unit at its Okpella operations.
Although the 500-truck deployment was in Tanzania, the investment reflects the company’s wider strategy of incorporating alternative fuels into its distribution and operational systems.
HBM Nigeria, formerly Lafarge Africa, is also placing greater emphasis on distribution efficiency and supply reliability as it seeks to strengthen its competitive position.
The cement manufacturer has used CNG trucks for over nine years and recently expanded its infrastructure to support high-capacity CNG refueling stations for its fleet.
The company’s nine-month results showed that improved distribution efficiency, operational stability, and volume growth supported a 19 percent increase in net sales to N928.2 billion.
The company operates four major production plants across Ogun, Gombe and Cross River states, alongside ready-mix operations in Lagos, Abuja and Port Harcourt.
Its geographical footprint makes efficient transportation and supply coordination important to serving customers across different regions.
The logistics focus comes against the backdrop of rising distribution costs across the industry.
Analyst view
Gideon Oshadumi, research analyst at Chapel Hill Denham, said the adoption of CNG-powered trucks was driven by both cost savings and the need to meet environmental, social, and governance (ESG) requirements.
“CNG trucks are relatively cheaper to operate than diesel- or petrol-powered trucks, and we have been seeing the efficiency reflected in companies’ margins,” he said.
Related News
Chinwe Michael is a Nigerian business journalist and media professional with over 4 years of experience covering companies, financial markets, banking, fintech, economic policy, financial inclusion, and corporate affairs. She currently leads the Companies & Markets desk at BusinessDay, where she drives coverage of Nigeria’s corporate and capital markets, translates complex financial data into accessible stories, and mentors younger journalists. Prior to that, she was the head of the financial inclusion/fintech desk. With a background in banking and finance and extensive experience in media and communications, Michael has developed expertise in financial journalism, economic analysis, investigative reporting and market intelligence. Her work examines how monetary policy, corporate performance, capital flows, technology, and regulatory decisions affect businesses, investors, and households. She was selected from about 3,000 applicants as one of 20 journalists for Cohort 4 of the MTN Media Innovation Programme, gaining exposure to new approaches to journalism, technology, and media innovation. Her international journalism experience and engagement with professionals across Russia, Dubai, Saudi Arabia, and others in different sectors have further broadened her understanding of global communication and development.
Source: