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It's official: Dangote Cement intends to build the 'biggest cement plant in the world' at Obajana, Nigeria by 2014! What exactly does this mean?
The news emerged at the opening of the company's new Ibese plant on Thursday 9 February 2012. Itself no minnow, the Ibese plant has a capacity of 6Mt/yr, boosting Dangote's production by 40% in Nigeria. Yet within the next two years Dangote plans to increase Obajana's capacity from 10Mt/yr to 15Mt/yr, making it the largest by installed capacity, according to company chairman Aliko Dangote.
Unfortunately Obajana's mighty ambition to meet 15Mt/yr looks miniscule compared to the total capacity of Anhui Conch Cement in China with its gargantuan 70Mt/yr from 36 dry kilns. Flicking through the Global Cement Directory 2012 reveals at least five plants with capacities over 15Mt/yr in Japan and China. Dangote likely meant 'capacity per kiln' but the comment reveals the variety of ways that scale in a cement plant can be determined.
Regardless, there is no question that Dangote's cement is needed. In January 2012 Global Cement Weekly reported Nigerian price rises of 25%. Around the same time of the Ibese opening Nigeria's National Bureau of Statistics reported that 60.9% of Nigerians in 2010 were living in 'absolute poverty', a rise from 54.7% in 2004. From national infrastructure improvements to jobs (as mentioned in our other Dangote news story this week from Zambia) 6Mt/yr of extra cement is sure to be welcome, especially if the extra capacity brings prices down to affordable levels.
Spain: The Spanish cement producer Cementos Portland Valderrivas has announced that it will appoint Juan Bejar Ochoa as its executive chairman. Bejar will replace Dieter Kiefer, who will leave the company after four years at the helm. Juan Bejar joined the company recently in January 2012.
The changes in Cementos Portland's top management come at a tough moment for the firm given the slump in cement sales on the domestic market, as well as the problems at its production sites in Tunisia.
Jordan: Toufic Ahmed Tabbara has been appointed as the CEO of Lafarge for Jordan. Tabbara will assume this new role in February 2012 and will be responsible for both cement and concrete. Before this new appointment, Tabbara worked at several roles across the Lafarge group in various countries.
Tabbara started his career as a financial analyst with Republic National Bank of New York in London. In 1998, he joined Lafarge as Manager of Strategy and Development of Gypsum Activity in Reston, US. He then worked at several managerial roles in Lafarge Group in US, Canada and Egypt.
Tabbara holds a BA degree in Business Administration from the American University of Beirut, Lebanon and an MBA degree from American Graduate School of International Management.
Mexico: Mexico's antitrust commission said it has fined the country's biggest cement company Cemex US$796,000 following an investigation into a failed attempt by a competitor to import cement into Mexico in 2004.
The Federal Competition Commission (CFC) said that the fine was for 'relative monopolistic practices,' which can include displacing competitors from the market.
Cemex said that it had been notified of the ruling, which it considers unfounded, and plans to contest it. "Cemex always acts in strict accordance with the law and will proceed with the legal resources that apply in this case," the company said.
The antitrust investigation followed a complaint by a group that was blocked from importing cement from Russia in 2004. Comercio para el Desarrollo Mexicano (CDM), which had been formed by local entrepreneurs and several foreign partners, was kept from unloading a 26,000t shipment, and had said it intended to import up to 0.5Mt/yr.
Zambia: Work on the construction of a new US$500m Dangote Cement plant in the Masaiti District of Zambia is progressing well and will be completed on schedule, according to company logistics manager Kampew Nundwe. The 1.5Mt/yr plant will be the largest in the country when it reaches its full capacity in 2013.
The plant is expected to create more than 1500 direct and indirect jobs during the construction and operational phases. "At the construction stage, 500 casual workers will be employed and up to 1000 people will be employed when full operations start," said Nundwe.
Nundwe said that the Chinese contractor working on the project has completed construction of temporary offices would soon be moving to the main construction site, with 80 trucks carrying materials from Germany and China scheduled to arrive from 15 February 2012 onwards.
Argentina: Cementos Avellaneda has dedicated a new 2.5Mt/yr cement plant at Olavarria, where it has invested US$85m, with the aim of meeting growing demand in Argentina. Cement sales increased to 11.6Mt in 2011, an 11% rise compared to sales in 2010. Demand in 2003 was just 6.5Mt.
Saudi Arabia: Saudi Cement Company has announced that it will re-start operation of its 4000t/day Kiln No. 6 by the start of May 2012 at the latest. It will have completed a large-scale environmental overhaul and conversion of the kiln from gas to crude-oil by this date.
The company will also recommence operation of three older kilns over a similar timescale. These have a combined capacity of 1325t/day. The total additional available capacity available in May 2012 will be 5325t/day, helping to meet rising demand in the country.
Lithuania: Akmenes Cementas, Lithuania's only cement manufacturer, posted a revenue of Euro63.2m for the whole of 2011, a rise of 37% compared to the Euro46.4m it took in 2010. Cement sales increased by 19% to nearly 0.98Mt.
Lithuania accounted for 55% of the company's sales, with sales rising by 14% year-on-year to 0.54Mt. Sales in the Russian exclave of Kaliningrad rose by 25% to 0.18Mt, or 19% of total sales, while sales in Belarus fell by 25% to 71,000t. Its sales in EU countries surged by 67% to 185,000t.
Akmenes Cementas is in the process of implementing its biggest-ever production modernisation project, worth Euro101m, which involves shifting from wet to dry cement production.
Indonesia: PT Semen Gresik has announced plans to build a new 0.6Mt/yr, US$133m integrated cement plant at Manokwari in Papua. Company CEO Dwi Sutjipto said that Semen Gresik wanted to 'dominate' the cement market in Indonesia's eastern regions.
The plant will be commissioned in 2014 after the installation of a new packaging plant in the region, which is expected be commissioned by August 2012. The company has announced ambitious plans to develop a large number of new packing plants in strategic areas along the archipelago with the aim of improving product distribution and consequently cutting logistics costs. "Currently, Semen Gresik has 18 packing plants. We hope to have 16 to 17 more in the next five years to lower distribution costs," said Semen Gresik's finance director Ahyanizzaman, who added that each of the 0.2-0.3Mt/yr plants would require an investment of about US$10m.
Semen Gresik expects to complete the construction of at least four packing plants in 2012, with ongoing packing-plant projects at Sorong in Papua, Banyuwangi in East Java, Banjarmasin in Kalimantan and Balikpapan in Riau. "The packing plant in Banyuwangi is almost finished and the Papua plant is about 50% complete. Meanwhile, we are ready to construct the plants in Kalimantan. We expect to build in more areas in Kalimantan but we remain constrained by land acquisition," added Ahyanizzaman.
New packing plants are part of Semen Gresik's effort to improve its distribution, especially in areas in eastern Indonesia, which frequently face delivery hurdles leading to higher cement prices. Each packing plant will bag cement sent from its closest Semen Gresik factory.The Sorong plant, for example, will process cement produced by Semen Gresik's factories in Sulawesi. The packing plant will have a capacity of bagging 0.6Mt/yr. The company is investing around US$22.2m= in the Papua packing plant, which will be supported by a 10,000t silo and a 150m harbour.
The finance director also said that he expected Semen Gresik to increase its revenue by 10-12% in 2012 due to the new plants and ongoing work on integrated facilities at Tuban and Tonasa. The company forecasts a more moderate increase in its net profit due to its capital expenditure. "We estimate a growth of 1-2% in net profit in 2012 compared to 2011," said Ahyanizzaman. "The slight increase is due to the new factories producing below their full capacity."
Nigeria: Nigeria's biggest listed company, Dangote Cement opened its new US$1bn cement plant in Ibese, Ogun State, on 9 February 2012, increasing its production capacity in Africa's most populous nation by more than 40%. The new plant will produce 6Mt/yr of cement, taking Dangote's total Nigerian production capacity to 20.25Mt/yr.
"We are working towards making the company one of the eight biggest producers of cement in the world," said Dangote's billionaire owner Aliko Dangote at the plant opening. "With the commissioning of the Ibese plant, Nigeria has been transformed from major importer of cement to self sufficient in production and export."
Dangote said that the new plant would generate around 7000 direct and indirect jobs for local people and spoke about his '20:2020' vision. He forecast that by 2014 his company would be active across 14 African countries, with its production capacity hitting 60Mt/yr.
Giving further details, Dangote added that within the next two years the company would complete upgrades at its Obajana plant in Kogi state, taking its capacity to a massive 15Mt/yr from 10.25Mt/yr at present. If realised, the expansions would make Obajana the largest in the world by installed capacity.
The ceremony was attended by the Nigerian President, Goodluck Jonathan, who cut a symbolic ribbon to officially open the plant for production. He spoke of security challenges in Nigeria, saying that Nigerians were 'tired' of (Boko Haram) bombings and needed more positive developments, like the opening of the Ibese plant.
"This story about commissioning is what Nigerians want to hear," said the President. "We have security challenges in the country. We have challenges in terms of infrastructure but we are totally committed individually and collectively to getting the country out of this situation. Our children want a better Nigeria than this."
The President also spoke about plans for major highway construction and redevelopment projects in Nigeria, many of which will likely source cement from the new plant.
His comments were echoed by the Govenor of Ogun State, Ibikunle Amosun, who said that ongoing industrialisation would be severely hindered without the easy and safe transportation of people and goods. Amosun commended Dangote for 'creating the enabling environment for this kind of gigantic project to materialise.'