“The hard­est part is to have the land”

The Africa Report - - COUNTRY FOCUS - Paavo Wiro Coun­try man­ager, Dan­gote Ce­ment Cameroon

TAR: What chal­lenges have you faced in set­ting up? The in­stal­la­tion here started in 2012 as a con­struc­tion project, and be­cause of dif­fi­cul­ties with the soil we had to build pil­lars and it took us some more time. In April 2015, the con­struc­tion was of­fi­cially fin­ished. […] We started pro­duc­tion pro­gres­sively but went very quickly. We started with a 0% mar­ket share and in April 2016 we over­passed 50% of the mar­ket share in the coun­try. Our com­peti­tor, La­farge, which has a very good brand name, has been here for 50 years as a mo­nop­oly but now they have about 30%. We have a ca­pac­ity of 1.5m tonnes per an­num […]. To­day we have more or less 700 peo­ple here and I am very proud to say they are 99% Cameroo­ni­ans. If you take the ce­ment plant plus the jetty, it is an investment of more than $200m. We have the most mod­ern ma­chines, which are Ger­man ones and they are not so very cheap. Our mar­ket share is float­ing be­tween 47-50%, and we are only mak­ing one prod­uct. With the four pro­duc­ers, we have about 4m tonnes of ca­pac­ity. We asked the govern­ment to stop im­ports of ce­ment in Jan­uary 2016 and now we are self-suf­fi­cient in ce­ment pro­duc­tion. The mar­ket is not so huge […] we say the re­al­is­tic num­ber is 2.8m tonnes with maybe 200,000tn of flex­i­bil­ity for govern­ment projects. So it means we have 1m tonnes of over­ca­pac­ity al­ready. So that is not enough be­cause we are plan­ning to open our new ce­ment plant in Yaoundé with more or less the same ca­pac­ity, maybe 1m tonnes.

How ad­vanced is the Yaoundé project? It started about a year ago. But the hard­est part is to have of­fi­cially the land and to know who are the land own­ers. In this coun­try, it is very tricky. For the same land, you have maybe three or four of­fi­cial own­ers […]. With these de­lays, we could be op­er­a­tional in late 2018. Our com­peti­tors – or, as we say, our col­leagues – are plan­ning their own ex­pan­sions, and in two years’ time we could be hav­ing 7m tonnes or more. The mar­ket is not grow­ing so fast and we think it could be some­thing like 5-8% per year. The 1.5m tonnes is a the­o­ret­i­cal ca­pac­ity and I would say we are pro­duc­ing and sell­ing 1.3m tonnes. Ce­ment pro­duc­ers have to im­port raw ma­te­ri­als, there is an en­ergy deficit and the mar­ket is al­ready sat­u­rated, so what is the strat­egy of com­pa­nies seek­ing to boost pro­duc­tion? We have started to ex­port al­ready. We have built one ware­house on the bor­der ar­eas and we will have maybe a cou­ple of oth­ers. We have al­ready opened a cou­ple of mar­kets in neigh­bour­ing coun­tries.

“We have more or less 700 peo­ple here and I’m proud to say 99% are Cameroo­ni­ans”

What is your client base like? To­day, we have three distri­bu­tion chan­nels. The main one is the whole­salers. We are a young com­pany and have not had time to de­velop […] and they rep­re­sent 80% of sales. The other chan­nel is the con­struc­tors, the project guys. We were hand­i­capped be­fore be­cause we did not have bulk trucks. We have 200 of our own trucks here that were im­ported from Nige­ria, rep­re­sent­ing 20% of all the distri­bu­tion we are mak­ing. And now we have our first 10 bulk trucks. The third chan­nel is the ex­port chan­nel, and we started that three weeks ago. […] The ideal sit­u­a­tion would be 55-60% dis­trib­u­tors and the rest split by con­struc­tors and ex­port. In­ter­view by Rein­nier Kazé in Douala and Mar­shall Van Valen

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