BREAKING NEWS, Business
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The Nigerian cement market is soon to be flooded with the product as Dangote Cement Plc is set to increase its production capacity by nine million metric tonnes by July this year
| By Anayo Ezugwu | May 19, 2014 @ 01:00 GMT
DANGOTE Cement Plc is soon to flood the Nigerian market with more cement. This follows the company’s plan to increase its production capacity by nine million metric tonnes by July 2014. A statement by Aliko Dangote, chairman, Dangote Group, disclosed that the expansion strategies embarked upon by the management of the company would culminate in an increase of additional nine million metric tonnes. In his speech during the 5th Annual General Meeting, AGM, of the company in Lagos, Dangote expressed optimism that the current year would offer better returns because trading has remained robust in the country and the company has started witnessing a solid start to the year with increased demand in all regions. He informed the shareholders about the status of the company’s various African projects.
“In Ethiopia, work is well underway, to build 2.5 million metric tonnes per annum plant at Mugher with production expected late in 2014. In Tanzania, we have begun work on a three-million metric tonne plant at Mtwara and would be fully operational in 2015. In Zambia, work is underway on a 1.5 million metric tonnes at Ndola with cement production expected in second half of 2014. We are reviewing plans for Kenya with a view to increasing the scale of our proposed factory from 1.5 to 3.0 million metric tonnes, because we are confident there will be sufficient demand both in Kenya and neighbouring countries,” he said.
Dangote also said that plans were underway to build import and grinding facilities along the coast of West Africa to receive and process raw materials supplied from Nigeria and Senegal. He decried the high cost of production, which he explained, has resulted to the rise in the price of cement in the country. “We never envisaged that the cost of production will rise to this extent when we said that the price of cement will fall, but as you can see, foreign exchange rate has gone up, the same with the price of gas and diesel. We even constructed some of the roads our vehicles ply, all in a bid to make sure we continue production. We will continue to do our best to ensure that we sell our product moderately; after all, the price of our cement is relatively cheaper when compared to our competitors. You can now order our product through your computers. We hope to increase our market share in the short term by increasing the level of direct-to customer deliveries and competing on product superiority.”
Devakumar Edwin, group managing director, Dangote Cement Plc, also attributed the results to focused and strategic management. “Dangote Cement made excellent progress in 2013. As the Nigerian cement market grew by a strong 15.6 percent, we managed even better growth of 28.2 percent, with our revenues increasing by 29.4 percent. Our direct-delivery strategy is proving very popular with customers and I am pleased to report that direct-to-customer deliveries now account for more than half of our sales. We increased our margins despite continuing disruption to our gas supply and believe that the gas distribution infrastructure will be more robust in 2014, enabling us to improve our margins even further. At the same time, we are looking at ways to diversify our fuel supplies to mitigate the impact of any future disruption and reduce the cost of using alternative fuels to gas,” he said, adding that the company’s financial strength had increased dividend by 133 percent to 7.0 per share and that the coming year would see the company opening new factories in Africa.
Meanwhile, the shareholders who spoke at the AGM commended the board of directors and management for the impressive results recorded during the year under review. The shareholders’ association leaders, such as Farouk Umar, Timothy Adesiyan, Sola Abodurin, Bisi Bakare, among others commended Dangote for its contribution towards the growth of the company as well as the economy. According to them, Dangote Cement has done well. “The company is paying us a dividend of N7.00 per 50 kobo share, an increase of about 133 percent from what it paid last year. The company’s turnover improved from N285 billion to N371 billion in the financial year under review. The same for profitability which increased from N146 billion in the previous year to N210 billion. So, we are very happy for the performance and hope to get higher dividend come next year,” the shareholders said.
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