Dangote Cement invests $3bn to drive Pan-African growth

Nigeria’s most capitalised quoted company, Dangote Cement Plc, has invested $3 billion in its Pan-African operations as the cement group continues to invest in expansion of its plants and terminals across the continent.

Group CEO, Dangote Cement Plc, Engr. Joseph Makoju, said the cement group has invested $3 billion to build manufacturing plants and import and grinding terminals across Africa.

The group’s operations include Cameroon, 1.5 Mta clinker grinding; Congo, 1.5 Mta; Ghana 1.5 Mta import; Ethiopia, 2.5 Mta; Senegal, 1.5 Mta; Sierra Leone, 0.7 Mta import; South Africa, 2.8 Mta; Tanzania, 3.0 Mta and Zambia, which has a 1.5 Mta plant.

Makoju said total Nigeria sales volumes went up by 13.9% to 7.8Mt in the second quarter ended June 30, 2018, although Pan-African volumes reduced by 3.9%, mainly due to shutdown in Tanzania.

According to him, the group, which employed 27,952 workers in Nigeria in 2017 had its revenue increased by 16.9% from N412.68 billion in 2017 to N482.44 billion in 2018 while its earning per share also increased by three% to N6.60 kobo per share by the end of second quarter.

Makoju noted that the group achieved the largest-ever issuance of Commercial Paper by a Nigerian company when it issued N50 billion Series 1 & 2 Notes at the end of the quarter, noting that the discount rate reflected the strength of the company and its excellent credit ratings.

Key extracts of the six-month report for the period ended June 30, 2018 showed that profit before tax rose from N155.58 billion in first half 2017 to N185.54 billion in first half 2018. Profit after tax increased from N109.71 billion to N113.16 billion while earnings per share rose from N6.41 to N6.60 per share.

At the AGM of the cement group last month, Chairman, Dangote Cement Plc, Alhaji Aliko Dangote had attributed the 31% increase in the group’s turnover of N805.6 billion in 2017 to its pan African operations growth which also recorded a significant increase in revenue from N195 billion in 2016 to N258.4 billion in 2017.

He had noted that Pan African operations increased volumes by 8.4%, with Ethiopia, Senegal, Cameroon and South Africa all performing strongly and close to their operating capacity. Makoju had noted that growth was driven by the decision to increase use of local coal in Nigeria, helped to improve fuel security, maintain production uptime and reduce need for foreign currency.

On the future growth plans, Makoju said the group will focus on building new grinding plants along the coast of West Africa, and ensure it has clinker export facilities in Nigeria. “We are looking at the possibility of two new lines in Nigeria, perhaps by the end of 2020 and it is likely these will be in Edo state and Obajana, with a combined capacity of 6.0 Mta,” Makoju said.