Displaying items by tag: Dangote Cement
Dangote Cement begins trial production in Ethiopia
02 June 2015Ethiopia: Dangote Cement, which entered the cement sector in Ethiopia with an investment of US$600m, began trial cement production at its new 2.5Mt/yr capacity plant in May 2015. The plant, which received its licence from the Ethiopia Investment Commission on 8 September 2008, is located at Muger in Adebern Wereda, Oromia. Dangote has started work with 1000 employees.
Dangote Cement has imported 1.2m packaging bags from Egypt, with more to be imported soon. Twenty-three heavy trucks imported for transport have also arrived at the port in Djibouti, with a duty free privilege provided by the government to the company, said Mesfin Abera, Dangote's sales and marketing manager in Ethiopia. The company will import a total of 600 trucks.
According to data obtained from the Ministry of Industry's Cement & Related Industry Development Institute, cement demand in Ethiopia is expected to reach 10.6Mt/yr in 2017.
Nigeria: Dangote Cement has announced a gross profit of US$375m for the three months that ended on 31 March 2015, a 10.5% increase over the US$340m recorded in the same period of 2014. Its revenues rose to US$576m from US$520m in the corresponding quarter of 2014. The improvement was buoyed by maiden contributions from non-Nigerian plants. Net profit was up by 44.1% to US$345m.
Group cement sales volumes were up by 3.4% to 3.8Mt, driven by contributions from South Africa, Senegal, Cameroon and new lines in Nigeria. The margins from Nigeria increased due to pricing, improved gas supply and more use of coal. Dangote's newly-operational cement plants in Zambia and Ethiopia are expected to impact positively on its future financial situation.
"Our African projects are now beginning to deliver revenue growth for the group and even at this early stage we are seeing good potential in all the countries into which we are expanding," said company CEO Onne van der Weijde. "Senegal has made an excellent start, Cameroon is poised for a strong entry into an exciting growth market and Sephaku Cement is shaking up the South African market as the first new entrant in many years. Although sales fell in Nigeria, we improved both revenues and margins thanks to pricing actions in December 2014 following the collapse of the oil price and currency devaluation. We are making a significant investment to improve our logistical capabilities and I am pleased to report a much more favourable fuel supply in the first quarter of 2015. We have invested for growth in Africa and each new plant that opens will generate good returns for shareholders as we deliver on our promise to become Africa's leading cement company."
Nigeria: Dangote Cement has appointed Douraid Zaghouani as a non-executive director with effect from 29 April 2015. Zaghouani holds a degree in Civil Engineering from École Nationale des Travaux Publics de l'État in France and is also a graduate in Business Administration from the École Supérieure des Sciences Commerciales business school in Paris.
Zaghouani is presently the Chief Operating Officer of the Investment Corporation of Dubai (ICD). In this role, he supports the CEO's Office in corporate strategy development and is responsible for the efficient operational management of the organization.
Nigeria: In November 2013, FLSmidth signed a number of contracts with Dangote Cement for operation and maintenance of production lines at its Ibese and Obajana cement plants in Nigeria for five years. Due to changes to market conditions, Dangote and FLSmidth have reached an agreement to end the operation and maintenance collaboration at the two plants.
The discontinuation of the operation and maintenance contracts will have no impact on FLSmidth's Group guidance for 2015. However, the demobilisation in Nigeria will have a negative impact on earnings before interest, taxes and amortisation (EBITA) in the customer services division in the first quarter in 2015 of US$11.1m. Additionally, the order backlog was reduced by US$102m at the end of the first quarter of 2015 as a consequence of the agreement.
What price for cement industry development in Cameroon?
22 April 2015Cameroon announced this week that it intends to ban imported cement to aid the sales from the new Dangote owned cement plant in the country. Readers should note that Dangote is a Nigerian-based company. Protective legislation such as this should come as no surprise given the rise of Nigeria's own cement industry and similar initiatives in that country. The difference here, however, is that the Cameroonian government is protecting investment by a foreign company rather than propping up any home grown concerns.
The new Dangote-run cement plant in Douala will start with a cement production capacity of 0.95Mt/yr with the intention to rise to 1.5Mt/yr in 2016. A meet-and-greet by company officials with local press in early April 2015 revealed that the company intends to snatch 30% of the local cement market in 2015 with prices primed to just undercut the other major producer.
What then of the country's two other integrated cement plants? Both have foreign ownership. Cimenteries du Cameroun, with a 1Mt/yr plant, is a subsidiary of France-based Lafarge. Ciments de L'Afrique, with a 0.5Mt/yr plant, is a Moroccan firm. Add the new 1.5Mt/yr Dangote cement plant and domestic production in Cameroon is anticipated to exceed local demand.
When this happens how will the Cameroonian government view the two non-Dangote producers who may well be importing clinker and other products into the country for their operations? If the experience of Nigeria is a model then a 'self-sufficiency' battle may ensue in the media. Alongside this the price of cement may well stay fairly stable despite any alleged 'gluts'. This week, for example, the Cement Producers Association of Nigeria has lobbied the President-elect of Nigeria, Muhammadu Buhari, to cut the price of cement by half. The hypocrisy during the Nigerian spat over imports was that Nigeria wanted (and has become) a cement exporter.
At the time this column asked how that could work if imports at the time were so much more competitive that they had to be banned at home. Then as now deals seem to mark the way. At that time, in early 2013, Liberia relaxed its tariffs on cement just as Dangote was building a new plant there. Now, in Cameroon, once again Dangote appears to be negotiating some form of preferential treatment.
At the root of these issues, Cameroon's citizens and industry want to build and develop their country. Cheaper cement will enable them to do this by pushing up per capita cement consumption. Protecting their domestic industry or those that have invested in the country may not necessarily lead to cheaper cement.
Dangote Cement to start Ethiopian production in May 2015
20 April 2015Ethiopia: Dangote Cement's new cement plant in Ethiopia will open in May 2015. Minister of Mines, Tolosa Shagi visited the plant and commented that new plants and upgrades to existing plants will enable Ethiopia to meet local demand, according to local media. The new cement plant in Oromia cost US$400m and it will have a cement production capacity of 2.5Mt/yr making it one of the largest in East Africa.
Currently, cement demand in Ethiopia is estimated to be around 7 – 8Mt/yr with cement production at 5.4Mt/yr. Once fully operational the Dangote Cement plant is hoped to raise the country's cement production to 8Mt/yr.
Cameroon bans cement imports
16 April 2015Cameroon: Cameroon has announced a ban on imported cement as part of measures to boost the patronage of Dangote Cement products, according to local media.
Abdulahi Baba, general manager and head of Dangote's Cameroon plant, said that the company had already assured the government of Cameroon that it would help shore up local cement with the ban on cement imports. Baba added that Dangote appreciates the gesture of the Cameroonian government and stressed that the ban was a vote of confidence on the ability of cement manufacturers in the country, especially Dangote Cement, to meet and surpass local demand.
Baba said that with the addition of Dangote's 1.5Mt/yr of capacity, the three domestic cement manufacturers would surpass local demand. He added that Dangote management was already looking towards export prospects in Chad, Central African Republic, Garbon, Equitorial Guinea and Togo.
"Demand is growing everyday because of the infrastructural developmental efforts of the government. We will take the advantage of the ban on cement importation here in Cameroon," said Baba. "We are set to pursue aggressive market penetration and consolidation through appropriate above-the-line and below-the-line activities. About 170 distributors have been selected after the interview process and 85 distributors will start. The number will gradually increase with increasing production."
Lafarge to expand plant despite competition
08 April 2015Zambia: Lafarge Zambia will begin work on the US$217m expansion of its cement plant in Lusaka in 2015 despite the recent opening of Dangote's cement plant in the country and slow regional economic growth.
Construction will start in the second half of 2015 and be completed in 2018, according to Emmanuel Rigaux, chief executive of the plant. The work will double Lafarge's cement production capacity to 2Mt/yr.
Lafarge's expansion and Dangote's new plant are not expected to cause a cement glut in Zambia, mainly because of demand from the neighbouring Democratic Republic of Congo. "The growth there is massive, in fact it's even higher than in Zambia," said Rigaux.
Chinese and Zambian officials also appear to be planning the construction of a cement plant in Zambia: Find story here.
Senegal/Cameroon: Dangote Cement's new plants in Senegal and Cameroon have commenced operations. Dangote Cement plants in Ethiopia and Zambia are expected to start production in April 2015.
The new Senegalese plant in Pout has a total production capacity of 1.5Mt/yr. With the new plant, Dangote Cement hopes to meet local demand and serve the export market demand of 2Mt/yr.
Country head of Dangote Industries Senegal, Luk Haelterman, disclosed that the group has invested about US$300m in the cement plant. He added that production and sales started on 10 January 2015. "Senegal is a market with overcapacity of cement, because it had two cement plants already. Dangote has become the biggest and best because we produce only 42.5R grade cement, which is better than 32.5R grade cement product there," said Haelterman.
Dangote results take a dive in 2014
27 March 2015Nigeria: Dangote Cement's pretax profit fell by 3.2% to US$928m in 2014 due to a gas shortage at its plants and low demand after prolonged wet weather. The company, Africa's biggest cement company, said that sales volumes in its main Nigerian market fell by 3.2% to 12.87Mt, weaker than the decline in the overall market of 0.8% to 21Mt. It expected market growth in Nigeria to be muted in 2015 owing to election and currency worries, worsened by the fall in government revenues that have triggered by the plunge in world oil prices.
Dangote's full-year revenues for 2014 climbed to US$1.97bn during the 12 months to 31 December 2014, up from US$1.97bn in 2013, due to growth from Dangote's other African operations. It said that unreliable gas supplies to its Obajana plant constrained production, while prolonged rainfall in the second half of last year led to a slowdown in construction. Dangote is increasingly turning its attention from Nigeria to elsewhere in Africa. In 2015 it expects to commission new cement plants in Cameroon, Zambia, Ethiopia and Tanzania.