Dangote cement expansion
Goal is to capture an ever bigger share of Africa’s market
NIGERIAN businessman Aliko Dangote is capturing a share of the African cement market, with his company, Dangote Cement, saying yesterday that interim volumes across the entire region had increased by 12.6 percent.
Dangote competes against other cement manufacturers in Africa, such as Lafarge and PPC in addition to other smaller producers.
“Our pan-African operations are growing well and increasing market share.
“We saw our first sales from Sierra Leone in the first quarter and our new plant in the Republic of Congo will be in production at the end of July, further increasing our footprint across Africa and strengthening our position as its leading manufacturer of cement,” chief executive Onne van der Weijde said.
Volumes in Africa, excluding Nigeria, increased to 4.7 million tons during the first half period to the end of June, driven by nearly 1.1 million tons sold in Ethiopia, followed by about 0.7 million tons in Senegal as well as 0.6 million tons and 0.5 million tons of cement that the manufacturer sold in Cameroon and Ghana respectively.
In Tanzania, Dangote sold 0.4 million tons, while the volumes for Zambia surged to 0.3 million tons.
However, the Nigerian home market fell from 8.8 million tons to 6.9 million tons attributed to “the onset of rains which stalled many construction projects” in the country.
The surge in volumes for the rest of Africa saw revenues climbing by 63.7 percent to $924.5 million (R12.02 billion).
The revenue surge has come on the back of “foreign exchange gains when converting the sales from country local currencies” into naira.
Inside Nigeria, revenues rose by 34.5 percent, despite the slide in volumes which declined 21.8 percent to 6.9 million tons.
“We estimate our market share to have been about 64.5 percent during the first six months of 2017,” the company said.
Analysts at Exotix Partners said recently that Dangote Cement’s African operations continued to record operating losses due to the high cost base in markets such as Tanzania and new operations in Sierra Leone.
However, the analysts noted key negatives for the company such as the 51 percent year-onyear increase in group cost per ton for the first quarter period “on account of new high-costbase subsidiaries, the impact of devaluation on dollar-linked costs and translation of subsidiaries, albeit cost per ton declined 18 percent quarter-on-quarter, reflecting strong cost management” in Nigeria.