Dan­gote Ce­ment to dou­ble ca­pac­ity

Daily Trust - - NEWS -

Nigeria’s big­gest com­pany by mar­ket cap­i­tal­i­sa­tion, Dan­gote Ce­ment, ex­pects to dou­ble its ce­ment pro­duc­tion ca­pac­ity across Africa this year to 40 mil­lion tonnes, its chief ex­ec­u­tive said on yes­ter­day.

De­vaku­mar Ed­win told the Reuters Africa In­vest­ment Sum­mit in the commercial hub of La­gos that the firm would add 9 mil­lion tonnes to its Nigeria op­er­a­tions, bring­ing them to 29 mil­lion tonnes, and open plants across Africa that have been sev­eral years in the mak­ing, adding a fur­ther 11 mil­lion tonnes.

Dan­gote Ce­ment, owned by Africa’s rich­est man Aliko Dan­gote with a per­sonal for­tune of $25 bil­lion, saw its 2013 prof­its in­crease by 40 per­cent to 190.76 bil­lion naira ($1.16 bil­lion), from 135.64 bil­lion naira a year ear­lier.

“The key driver is the in­crease in vol­umes. We have kept a fo­cus on con­trol­ling costs, but our fo­cus on vol­ume growth ... has been what has in­creased our prof­its,” Ed­win said.

Dan­gote has ce­ment plants span­ning Africa, from Sene­gal to South Africa, but most have been in con­struc­tion phase and be­tween them they con­trib­ute less than a mil­lion tonnes to the group’s cur­rent over­all pro­duc­tion ca­pac­ity, Ed­win said.

That would change this year, as plants in Sene­gal, Sierra Leone, Cameroon, Zam­bia, South Africa and Ethiopi­a­come on tap.

“All of them will come into oper­a­tion in the cur­rent year,” Ed­win said.

Additional ca­pac­ity in Ivory Coast, Ghana, Liberia, Tan­za­nia, Congo and in Nigeria would mean that by mid-2016 Dan­gote would have a 60 mil­lion tonne ca­pac­ity, he added.

Al­most all of this ex­pan­sion had been funded with in­ter­nal cash flows, Ed­win said, un­like ri­vals.

“Other ce­ment ma­jors bor­rowed heav­ily for merg­ers. One of the key rea­sons we have been able to grow ag­gres­sively in the African mar­ket is be­cause they are cash strapped and we do not have that prob­lem,” he said.

Dan­gote’s main ri­val in its home mar­ket is France’s La­farge.

Dan­gote has long said it in­tends to list in Lon­don, al­though a plan to do so last year has been put back. An­a­lysts say cor­po­rate gov­er­nance is­sues re­main a hur­dle. Ed­win de­nied that.

He said the com­pany had ful­filled a list of re­quire­ments, in­clud­ing ap­point­ing an in­de­pen­dent board and car­ry­ing out ap­pro­pri­ate fi­nan­cial reporting.

The rea­son it was tak­ing time to list was that in­vestors had not fully ap­pre­ci­ated the value of Dan­gote’s non-pro­duc­ing as­sets out­side Nigeria. “But that is chang­ing,” Ed­win said, adding the com­pany hoped to list some time next year.

From left: Mr. Mo­hamed Jameel, Globa­com’s Group Chief Op­er­at­ing Of­fi­cer, pre­sent­ing the key to a brand new Range Rover Sports to High Chief Peter Oje­men (MFR), a Globa­com Trade Part­ner, while Mr. David Maji, Globa­com’s Na­tional Sales Co­or­di­na­tor, pro­vides sup­port at the Glo Part­ners’ Awards on Satur­day in La­gos.

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