The Dangote Group is leaving no stone unturned to consolidate its cement assets, and bridge the gap in supply of the product in the market, reduce the country’s reliance on imported brands, as well as boost employment and the nation’s gross domestic product, GDP. The company recently warded off challenges emanating from the ongoing banking crisis in the country by liquidating a $1.27 billion loan facility it took from a consortium of 10 Nigerian banks in May 2008 to finance expansion projects within its cement division, five and a half years ahead of schedule. The banks, which smiled home with their cheques after the repayment ceremony at Ibese, Ogun State last week, are Guaranty Trust Bank, First Bank, Zenith Bank, First City Monument Bank, Fidelity Bank and Stanbic IBTC. Others are United Bank for Africa, Afribank, Access Bank and Bank PHB.

Aliko Dangote, president and chief executive of the group, said at the ceremony that the execution of the projects had progressed in the last 20 months, and should be completed on schedule. Half of the cement consumed in Africa comes from Asia, and with the expansion programme, Dangote wants to reduce the continent’s dependence on imports. The projects when they fully come on stream by the first quarter of next year will bring the total output of the group in the Nigerian market to 20 million tonnes of cement per annum. The cement output from the company’s investments in Zambia, Senegal and Ghana by the same period is also expected to reach 4.5 million tonnes per annum, bringing its African output to 24.5 million tonnes per annum.

These developments, an elated Dangote told a gathering of stakeholders

at Ibese, will make the Dangote Group the second largest cement manufacturer in Africa and amongst the top 12 in the world. He said the group’s strategy is to consolidate its position prior to listing the entire cement operations sometime this year. Two of his companies, Dangote Flour and Dangote Sugar are already listed on the Nigerian Stock Exchange. “It is quite obvious that we are determined to succeed as our commitment is clear. We have decided to put our money where our mouth is, with the aim of making Nigeria’s economic development a reality. At this critical moment of our history, destiny demands that we play a critical role in job creation, developing skills and boosting our GDP,” Dangote enthused.

He added that Nigerians were desirous of seeing cement price come down to N1,000 per bag, and wondered how they arrived at that price. That notwithstanding Dangote assured that that expectation has been a guiding principle in the group’s mission to touch the lives of people by providing basic services. He said the group has so far invested over $3.5 billion in the cement expansion projects in Nigeria and across the continent, of which only $1.27 billion was sourced from a consortium of local banks, with the balance from cash flow generated by the group.

1. Raju Bhima, senior project manager (mechanical), at the Dangote Cement Works Limited,  Ibese, explained during the tour of the facility last Monday that the output of the Ibese factory would surpass that of Obajana, Kogi State when it comes on stream next year. “It is a long-term project, but it has bright prospects. We have a limestone deposit here to last

to last us for more than 50 years,” he explained.   

The business activities of the Dangote Group, the leading indigenous industrial conglomerate, encompass cement, sugar, salt, flour and semolina, pasta, noodles, poly products, port management, haulage and real estate. Apart from Obajana and Ibese, the group’s cement operations also include manufacturing plants in Benue and Shagamu and bulk terminals in Lagos, Port Harcourt and Onne. The company has acquired mining leases in Tanzania, Ethiopia and Angola, and is currently considering doing same in Equatorial Guinea and Ghana.

The President Umaru Yar’Adua administration has been concerned by the soaring prices of cement in the Nigerian market, and in a bid to check the trend, opened the floodgate for the importation of the product, which was banned by its predecessor. As a result, the administration in 2008 lifted the ban on importation of bulk cement and granted import licences to six new firms along with the existing cement manufacturers to flood the market with the product and force prices down. At the time, the administration said the move was to make up for the 11.5 million tonnes per year shortfall in the cement market. Local operators, data showed, were only able to supply about 6.5 million tonnes of the installed capacity of 9 million metric tonnes into the Nigerian market, while total national demand was estimated at between 18 and 20 million tonnes per year.

But this has not happened, as the import licences has done little to influence prices as anticipated. According to observers, this is largely on account of the high cost profile of local producers a

and financial and logistics difficulties confronting those granted the import licences.

 

Dangote: Determined to make Nigeria’s economic development a reality

Obajana Cement factory

Bhima: Ibese factory has bright prospects

Dangote Cement factory, Ibese: Bridging the gap in cement suppply