Dangote Cement to double capacity in 2014

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Nigeria: Dangote Cement expects to double its cement production capacity across Africa in 2014 to 40Mt/yr, according to Devakumar Edwin, chief executive of Dangote.

Edwin said that in Lagos the firm would add 9Mt/yr of capacity, bringing it to 29Mt/yr. Dangote will also open plants across Africa that have been several years in the making, adding a further 11Mt/yr of production capacity.

Dangote Cement saw its 2013 profits increase by 40% to US$1.16bn, up from US$498bn in 2012. "The key driver is the increase in volumes. We have kept a focus on controlling costs, however, our focus on volume growth is what has increased our profits," Edwin said.

Dangote has cement plants spanning Africa, though most are in the construction phase. Between them they contribute less than 1Mt/yr to the group's current overall production capacity. That will change in 2014, as plants in Senegal, Sierra Leone, Cameroon, Zambia, South Africa and Ethiopia begin operations. Additional capacity in Ivory Coast, Ghana, Liberia, Tanzania, Congo and in Nigeria would mean that by mid-2016 Dangote is expected to have a 60Mt/yr capacity.

Almost all of the expansion has been funded with internal cash flows, according to Edwin, 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.

Last modified on 08 April 2014

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