Nigeria’s biggest listed company, Dangote Cement has opened a $1 billion cement plant, raising its production capacity in Africa’s most populous nation by more than 40 percent.
The new plant, commissioned by President Jonathan on Thursday, is situated in Ibese, Ogun State in southeast Nigeria, just outside the commercial hub Lagos. It will produce 6 million metric tonnes of cement per annum (mtpa), which along with Dangote Cement’s two other plants will take total production to 20.25 mtpa.
President Goodluck Jonathan, who commissioned the plant expressed satisfaction with the expansion of Dangote Cement plants saying that soon Nigeria “will not only be exporter of crude oil, but will be exporter of cement.”
Jonathan hailed the billionaire owner of the plant and said that it was because of Mr Dangote’s contributions to the economy that justified the conferment of Grand Commander of the Order of the Niger (GCON) award on him, an award that hitherto have been conferred on Vice Presidents.
The President said that the plant which will directly employ over 7,000 workers will help to reduce the rate of employment in the country and reduce the cost of housing in Nigeria.
He said for the country to achieve its aim of joining the top 20 economy in the world by the year 2020 “we need to multiply people like Dangote.”
President Goodluck Jonathan said he welcomed news of business development in a country grappling with major security threats.
“Whenever you call me to come and commission new investments, I will come again because these are the kind of stories we want to hear in Nigeria.”
According to Aliko Dangote, who currently has significant interests in the oil, gas and foodstuff sectors in Nigeria, also operates in 14 other African countries, during the plant opening, “We are working towards making the company one of the eight biggest producers of cement in the world.”
“With the commissioning of the Ibese plant, Nigeria has been transformed from major importer of cement to self-sufficient in production and export.”
“We are working towards making the company one of the eight biggest producers of cement in the world,” said Dangote group president, Aliko Dangote, labelled the richest man in Africa by Forbes magazine.
Dangote said in the next two years the company’s Obajana plant, in Kogi state, would have its capacity upgraded to 15 mtpa from 10.25 mtpa currently, which would make it the world’s biggest cement plant.
Speaking at the commissioning of the plant, the Ogun state governor, Ibikunle Amosun commended the company for the choice of the state as location for the cement plant. He pleaded with the management of the company to assist the government in fixing the Lagos-Ibadan express road which is in a deplorable state.
Meanwhile, the leading Nigerian cement manufacturer, Dangote Cement Plc, said with the launch of its Ibese Plant, near Ilaro in Ogun State, on February 9, 2012, the nation would end importation of cement.
Dangote Cement, reputed to be the largest producer of the commodity in Africa, is pushing Nigeria to the top in the world as not only a producer of the vital commodity, but also a net exporter soon.
The official commissioning of the multi-billion dollar cement plant in Ibese, with production capacity of six million tonnes per annum, will effectively mark the end of the era of cement importation into the country.
President of the Dangote Group, Alhaji Aliko Dangote, said his organisation has taken up the challenge in leading the way to make the nation self-reliant in cement production. He said the country was losing a huge sum in foreign exchange on importation of cement and other building materials.
According to him, Dangote Cement is poised to ensure that the country not only moves away completely from importing certain commodities, including cement, but also strengthen the local production capacity to make the country a major exporting nation and boost its foreign reserves.
“Our long-term ambition is to develop 46 million metric tonnes of production and terminal capacity in Africa by 2015. We want to become a truly pan-African champion in the sector, capable of competing globally with the largest cement companies in the world.”
Dangote’s current projection in cement manufacturing would further extend the company’s investments in Africa. Its cement business, which generated revenues of US$3 billion in 2010, is in 14 African countries, including Nigeria, Benin, Cameroon, Cote d’Ivoire,the DRC, Ethiopia, Gabon, Ghana, Liberia, Senegal,Sierra Leone, South Africa, Tanzania and Zambia.
Group Head, Corporate Communication of the Dangote Group, Anthony Chiejina, said ‘considering Nigeria’s cement need which is between 17 and 19 million tonnes per year, with the coming on stream of Ibese, what Dangote Group alone will be producing will be far more than the country’s demand.
“That will set the pace for exportation of our products which will lead to increased products, more revenue for the company and better returns for the shareholders.”
Managing Director of Dangote Cement, Lagos Terminal, Mr. Akin Adesokan, also told distributors in Lagos that the coming of Ibese plant would bring a new lease of life in cement business.
He noted that distributors would now have an effective, smooth and timely transaction with the opening of the Ibese plant.
“Now, you have business to do. Cement is now within your reach, no delay again. The opening of Ibese plant is for you all. You don’t have to wait endlessly again. As you know, Dangote Cement has beefed up its distribution network with acquisition of more trucks. We are ready to meet your needs and those of Nigerians at large.”
The new plant at Ibese, in south-western Ogun State, will be able to produce six million metric tonnes of cement per year and will boost Dangote’s annual production capacity to 20.25 metric tonnes, including its two other plants.
Dangote Group Plans 50 Million Tonnes Of Cement Across Africa By 2015
The new Dangote’s new 6 million tonnes per annum Cement factory at Ibese, Ogun state has effectively met the national domestic consumption which hovers around 18 million tonnes per annum, when added to the productions from Obajana, Gboko plants, equally belonging to Dangote Cement and of course those of other competitors.
President of the Dangote Group, Alhaji Aliko Dangote, revealed that the commissioning of his 6 mtpa (combined production from two lines) new Ibese plant will mark the end of importation of the vital products into Nigeria.
Dangote is making an arrangement to lay the foundation stone for another two lines that will produce additional 6mtpa to give vent to the promise of putting Nigeria on the world map not only to meet local consumption but become notable exporter of the essential building commodity. This objective will be fully realized when the additional two lines come on stream, which will make Ibese plant the largest cement plant in Africa.
As the company expands in the home market, it will spend about 50 billion naira (US$309 million) to upgrade its Gboko plant to a four-million ton annual capacity by 2012, up from the current 3.5 mtpy. With ten million tons of capacity upgrade of Obajana and present six million in Ibese, the company’s cement production will hit 20 million tons in the first quarter of 2012.
In 2011 Dangote integrated his cement investments across Africa and established his company as the largest entity on the Nigerian Stock Exchange with a market value of US$10 billion.
The cement maker is planning to raise funds in a London share sale before the end of 2012, a US$3.9 billion investment, as it moves to more than double output to 50 million metric tons by 2015 from an estimated 20 million tons this year.
Dangote is building eight new plants across Africa and constructing cement import terminals in five countries. With his strategic goal to build substantial new capacity in Africa’s growth economies, Dangote is voicing ambitions to become one of the leading cement producers in the world. Dangote Cement, Africa’s biggest cement producer, is cruising ahead.
The company announced a 23 percent profit increase for the January-September period, thanks to higher cement sales. Net income for the period increased to 92.8 billion naira (US$589 million), from 75.3 billion naira a year earlier. Revenue climbed 19 percent to 173.8 billion naira (US$1.1 billion).
“We strongly believe in the future growth of the African economy and of continued growth across the whole of Africa. The level of our investment here and in other markets is a clear proof of this,”Dangote had said. “The fact that Africa offers one of the highest returns on investment (ROI) in the world is an additional incentive for any discerning investor who can take calculated risks.”
One of the driving force behind the cement business expansion of Alhaji Dangote and his many other businesses, according to him stems from his desire to give people jobs as well as to create an African success story. He admits that Nigeria is still plagued by corruption, but shows nevertheless a great confidence in the future.
“Nigeria is the best place to invest, one of the best places to make money all over the world. It is actually the best kept secret in terms of investment,” Dangote said in an interview with the CNN.
Dangote Cement announced in October 2011 its plans to set up a US$400 million plant in Ethiopia, in the Oromiya region. The plant is expected to produce two million tons per year, and the project should be finalized in the next two years.
Also in October, Dangote said he will spend about 2 billion CFA francs (US$4 million) to start a new cement factory in the Democratic Republic of Congo that is expected to have an initial capacity of 1.5 mtpa. If demands for cement increases, the plant could be upgraded to a 2.5 mtpa capacity.
Dangote Cement has not yet announced when construction would begin in the DRC, but another plant, with a yearly capacity of 500,000 tons, is planned in Sierra Leone with construction slated for 2013.
In addition, the company announced in September 2011 that it eyes an investment of US115 million in Cameroon. A plant will be built in the economic center of Douala to produce about 1.5 mtpa of cement. Aliko Dangote’s aggressive expansion is not always seen with good eyes, of course.
His intention to enter the Senegalese market, for example, has been criticized by worried competitors. “In Senegal, there is no room for a third player,” said a top executive of Ciments du Sahel, which annually produces 2.4 million tons of cement, roughly the annual need of the domestic market.
With a third cement producer in the market, the two current competitors—Sococim and Ciments du Sahel—may reach an overproduction of one to two million tons each between 2012 and 2015. Of course, they have cause to be afraid given the exploits of the Dangote Cement in the home turf and its dominance in the West African coast.
Dangote Cement has invested 250 billion CFA francs (US$505 million) in a plant based in the Thies in Pout region in western Senegal and intends to start operations by the end of the year.Dangote wants to come up with 2.5 mtpa of cement, of which 60 percent would be sold in Senegal.
According to Dangote, “Our long term ambition is to develop 46 million metric tons of production and terminal capacity in Africa by 2015. We want to become a truly pan-African champion in the sector, capable of competing globally with the largest cement companies in the world.”
Every Nigerian has heard of the Dangote Group. The Group is active in sugar, flour, textiles, telecom and many others, with cement standing out as the pearl of the crown.
Dangote’s current project is to further extend his consortium across Africa. His empire, which generated revenues of US$3 billion in 2010, already reaches 14 African countries: Nigeria, Benin, Cameroon, Cote d’Ivoire, the DRC, Ethiopia, Gabon, Ghana, Liberia, Senegal, Sierra Leone, South Africa, Tanzania, and Zambia.
His corporation accounts for about 30 percent of the Nigerian Stock Exchange by market value.
Since the Dangote Group his company is expanding faster than Nigeria’s economy, it is considering investing in the national infrastructure as well.
Alhaji Dangote said: “It is in my best interest to contribute towards the growth of Nigeria first, before contributing to my own company, because my own company has limitations. Nigeria must do better for Dangote to do well in terms of business.”
To support the cement business and by extension the national economy, the Group plans to construct rail track from its facilities and connect it to the national railway.
As a way out of the bottleneck that had bedeviled the cement distribution in Nigeria, The Dangote Cement had purchased 5,000 trucks to enhance distribution and bring down the price. According to him, Dangote Cement arrived at decision to construct rail line because the cost of transporting bulk goods such as cement in the country was still huge.
“The challenge is taking our goods from the factory to the various depots, and since there is no railway system, it makes transportation of bulky goods burdensome,’’ one of the executive manager of Dangote’s Lagos cement operations explained. Additionally, Dangote would also establish a vessel freight to boost the exportation of goods to the Economic Community of West African States (ECOWAS) markets, he added.
When he received his 2011 Business Leader award, Aliko Dangote spoke about the future of the continent as a new era in terms of business environment. “Reforms are changing the face of doing business in the continent,” he said. “Over 84 percent of economies in sub-Saharan Africa have implemented regulatory reforms making it easier to do business. There are still challenges to doing business in Africa, but there is hope. This is a new Africa. Governance is much better. Yes, there is corruption and it is still an issue. But looking at where we have come from, things are getting better and fast.”
The African expansion is far from being over. Dangote Cement says it plans to build more units in Africa in the coming years and has named Gabon, the DRC, Algeria and Tanzania as potential destinations. Dangote has chosen European and Chinese technology for the construction of its planned cement plants.
He selected a consortium of Chinese state-owned AVIC International Beijing Company and Germany’s KHD Humboldt Wedag, an alliance which has already built 13 cement plants across the world, as an effective combination between high quality and low cost.
Considering that Nigeria’s cement need is between 17 to 19 million tons per year, “by implication, what Dangote Group alone will be producing will be far more than the country’s demand,” the Dangote Group said in a statement. “That will set the pace for exportation of our products which will lead to increased products, more revenue for the company and better returnsfor the shareholders.”
For Aliko Dangote, the focus is not his own achievements but a larger future for Africa: “We are motivated to create an African success story because we believe that entrepreneurship, especially our own home-grown African entrepreneurship, holds the key to the future economic growth of the continent.
Africa is gradually taking its destiny in its own hands rather than wait for investors from outside. Investment in the real sector of the economy is the only way that our continent can achieve the much desired accelerated growth and development that we have yearned for.”
Facts & Figures:
* $505 million cement plant in Senegal
* $ 400 million cement plant in Ethiopia
* $115 million cement plant in Cameroon
* Building 8 cement plants in as many African countries, 5 cement import terminals as well
* Obajana to become largest cement plant in the world by 2015, Ibese plant will be the largest cement plant in Africa by 2014
* Nigeria commences export of cement in 2012
Reports By Blank NEWS Online, With Agency Reports From AFP, SUN, CHANNELS TV
*Photos: Henry Unini