Africa In Focus

Africa In Focus: "The mainstream thinking now is that Africa is different and we could get it right if we want. The choice is fully ours, and it is now time for us to define what we want."

African Development Bank (AFDB) President, Dr. Donald Kaberuka.

Wednesday, 2 May 2012

Dangote Cement : Africa’s “Overachiever” Cement Compan

VENTURES AFRICA- The name Dangote Group is no longer new in the business world; especially in Africa. Known for its products such as Cement, Sugar, Salt, Flour, Macaroni, Spaghetti, Noodles, Rice, Dansa Juice, and Mowa Table water, Ziza milk, Petit tomato paste and Danvita ; the group has become one of the largest trading company operating in the Africa.
Founded in May 1981, Dangote Group is one of the largest companies in Africa. In fact, it is the only Nigerian company with such prominent presence across 14 African countries. However, what many fail to realize (apologies to those who know) is that the major source of Dangote company strength is its Cement Company.

Dangote Cement is West Africa’s biggest quoted company with a market capitalization of $10.5 billion. Prominent for its manufacturing, packaging and distributing cement services, Dangote Cement is also the largest quoted company in Nigeria and it accounts for about 30% of the Nigerian Stock Exchange by market capitalization, following its merger with Benue Cement Company Plc in October 2010. This makes it one of the biggest quoted Companies in Africa.

With its popularity and vigor in the Africa cement industry, Dangote Cement as Africa foremost Cement Company with branches spread across the continent; has full operations across the African region especially in Benin, Nigeria and Ghana. Other African countries where Dangote enjoys its prowess are Senegal, Zambia, Tanzania, South Africa, Congo (Brazzaville), Ethiopia, Cameroun.

The company cement plant in Nigeria include Obajana Cement Plc, Kogi; Benue Cement Company, Benue; and Dangote Cement Works Ltd, Ibese – all with a combined capacity of 20 million Mtp across Africa.

As part of its operation, Dangote Cement Plant has six cement terminals in Lagos and Port Harcourt to aid its importation of cement. Its terminals in Nigeria, Lagos Cement Terminal, Port Harcourt Cement Terminal, Onne cement terminal, Aliko Inland cement terminal, Continental Cement terminal all with a combined capacity of 9 million Mtpa. Its other terminals are in Ghana (3.0 million MT per annum), Sierra Leone (0.5 million MTpa), Ivory Coast (1.0 million MTpa) and Liberia 0.5 million MTper annum.
The increased viability of the company’s franchise is in its ownership of the largest sub-Saharan Africa cement plant in Obajana, Kogi State. Dangote took over the management (as core investor under a privatisation programme) of the Benue Cement Company Plc (BCC) in January 2004 while production started in 2005.

Dangote Cement constructed the biggest Greenfield cement processing plant in Africa with the capacity of producing 5,000,000 million metric tonnes per annum at a cost of $1.2 billion. As a result of the unreliable power supply in Nigeria, Dangote Cement fuels its own cement factory by laying a gas pipeline to service a factory and a power plant to service his factory. The plant thereby has the capacity of producing with total existing production and import capacity 14 million tonnes per annum and new production projects in development with 11.1 million tonnes per annum additional capacity.

Its Obajana power-plant has the largest cement plant with a capacity of 5.2 million MTpa with additional capacity of over 5 million MTpa planned. It has a vertical roller mills for energy, efficient grinding of raw material and clinker and a Gas pipeline of approx. 90 kilometer length for the supply of natural gas to cement plant and power plant from Ajaokuta to Obajana (capacity -96,000 cu.m /hr).

To further enlarge its coast as Africa’s biggest cement producer, Dangote in Feburary launched production at its new cement plant (the third cement plant in Nigeria) at Ibese and Sagamu in Ogun State. The factory would be 100 percent dedicated to exporting the Group’s product and would have a combined production capacity of about 8 million metric tonnes per annum.
In packaging its cement product, the company has a cement terminal at Tema, Ghana which is designed to produce one million metric tonnes per annum.

All these accomplishments have been achieved under the tutelage of Aliko Dangote, a graduate of Al-Azahar University who established the company and today serve as the President/Chief Executive of Dangote Group. At 55, he has so many accolades that perhaps, he could hardly remember as a result of his success in the cement industry as well as in other subsidiary businesses. Aliko Dangote over the years is credited with the net worth of $11.2 billion. He has been able to achieve the feat as the richest man in Africa and one of the top black billionaires in the world, according to recent Forbes list. He was also named BusinessWorld Investor of the Year 2010.

At the new cement plant at Ibese in Ogun State, the, Aliko Dangote said, “We envisage that by the time we complete all these projects, we will be in a position to produce about60 million metric tonnes per annum of cement by the end of 2014. This will place us among the top eight cement producing companies in the world.”

By 2015, Dangote intends to expand its annual cement production capacity from 8 million tonnes in 2011 to 48 million tonnes .
This is not to say that the journey has all been rosy. However, despite the hitch along the way has been able to build the company from a product among its par to an achiever product. He has continue through its ventures show that Nigeria is a land of opportunity where hard working entrepreneur has been able to make their mark and achieve success in their area of investment.

According to the Financial Times, the company plans to list the $11 billion cement business on the London Stock Exchange next year. The FT quotes Dangote as saying, “We want to list in London next year. By then the upside to our business will be much bigger than today.”

Farther away from achieving this magnificent feat in the cement industry, the group has recently expressed its interest in infrastructure, mining and petrochemical. Dangote reportedly intends to free-float a 20 percent stake in Dangote Cement to fund its expansion.

He also plans to build a cement plant in Congo soon.

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