Displaying items by tag: Dangote Cement
Getting into Africa
13 March 2013If you have any spare cement this week – send it to Ghana!
First, HeidelbergCement announced plans for a new cement mill on the coast at Takoradi. Then, Dangote officially started to export cement to the west African nation.
HeidelbergCement's strategy in the region is telling because it is starting to head inland. The press release on Ghana indicated that the German-based cement producer intends to expand its capacity to 4.4Mt/yr by late 2014. This follows a recent announcement that HeidelbergCement are building their first grinding plant in Burkina Faso, directly north of Ghana. Previously the producer imported cement there. Now it intends to build a US$50m plant with a production capacity of 0.65Mt/yr.
Since most of HeidelbergCement's existing infrastructure in the region is based on the coast, building a plant in a landlocked nation - Burkina Faso - is a huge vote of investor confidence in west Africa. "In particular the countries of sub-Saharan Africa have a very high growth potential due to their early stage of industrialisation and rich natural resources," said Dr Bernd Scheifele, chairman of the managing board of HeidelbergCement in the statement accompanying the Ghana expansion.
The move also provides a clue as to how competitive the cement market is becoming in territories near the coast in Africa. Currently HeidelbergCement holds a mostly coastal presence in western Africa, in Benin, Democratic Republic of the Congo, Gabon, Ghana, Liberia, Sierra Leone and Togo. It has four cement plants and nine grinding plants. Its cement business made a year-on-year increase in revenue of 12% to Euro612m in 2012.
Roughly calculated, HeidelbergCement is paying US$77/t in Burkina Faso compared to US$38/t in Ghana to build its new production capacity. HeidelbergCement must be paying double for a reason.
Meanwhile, Dangote Cement announced on the same day (11 March 2013) that a fleet of cement trucks were heading to Ghana. Already the Nigerian cement producer holds a cement terminal with a bagging capacity of 1.5Mt/yr in the country. Dangote intends to start exporting 5000t/week of cement. Its eventual target is 5000t/day when the logistics are in place, or up to 1.8Mt/yr. Not a bad start in unloading Dangote's self-declared overcapacity of 20Mt/yr in Nigeria upon the neighbouring nations in the Economic Community of West African States (ECOWAS).
Dangote Cement starts exporting to Ghana
13 March 2013Ghana: Dangote Cement has officially commenced the export of cement from its Ibese plant, Ogun State to Ghana. The Nigerian cement producer will start to export 5000t/week of cement using 50 silo trucks. However upon the completion of all logistics it says it intends to export 50 trucks of cement per day or up to 1.8Mt/yr.
Alhaji Aliko Dangote, Dangote's chairman, had previously commented in an interview with Reuters that his company would start cement exports to the Economic Community of West African States (ECOWAS) by the end of 2012. Dangote currently says it has a production overcapacity of 20Mt/yr in Nigeria.
Dangote Cement commissioned its first overseas cement terminal in 2011 in Accra Port, Ghana with a bagging capacity of 1.5Mt/yr. Dangote has also commented that there are good market opportunities in other neighbouring countries such as Liberia, Sierra Leone and Ivory Coast.
Dangote partner Sephaku sees loss double in South Africa
27 February 2013South Africa: Sephaku Holdings, the listed company with a 36% shareholding in Sephaku Cement, has nearly doubled its headline loss to US$1.11m in the six months to 31 December 2012 compared to US$0.63m in the same period of 2011. However, the company is in a strong cash position according to CEO Lelau Mohuba.
Sephaku Cement plans to commission a clinker plant towards the end of the 2013, which will produce 2.5Mt/yr of cement. It is 64%-owned by Nigeria's Dangote Cement. Mohuba said the commissioning was on schedule and that Sephaku would become a major player in the South African cement market, which currently produces 14Mt/yr.
Meanwhile shareholders have approved the acquisition of Metier Mixed Concrete on 11 January 2013. The company concluded a 10 year funding agreement deal valued at US$220m with Standard Bank and Nedbank in October 2012. Sephaku's directors said this agreement would close the gap in terms of the capital they would require for Sephaku Cement to be fully prepared for market entry and for it to become a significant competitor in the wholesale and retail cement trade.
Dangote has, according to reports, invested more than US$124m in the cement venture at Aganang, near Lichtenburg in North West Province, making it the largest foreign direct investment in South Africa by a company from elsewhere in Africa.
Loesche announces orders for Sinoma and Dangote in Africa
13 February 2013Nigeria: German vertical roller mill (VRM) producer Loesche GmbH has been awarded a contract for five new VRMs from China's Sinoma International Engineering, which is building a two kiln extension to the existing Dangote Cement Ibese plant. Loesche previously delivered equipment for the first and second lines at the same plant.
The five VRMs to be supplied are two 450t/hr Loesche Mill Type LM69.9 mills for raw material and three 310t/hr cement LM 63.3+3C cement mills. As with previous work at Ibese, the high moisture of the material of up to 20%, the sticky nature of the raw material and the low grindability of the raw material represent special challenges for the project.
In addition to the mills and the mill motors, Loesche will deliver metal detectors and hopper discharge feeders. The supply of the equipment will be split between Loesche, which is supplying key parts, and a Chinese-manufactured portion arranged by Sinoma International under supervision of Loesche. Delivery is scheduled at the end of 2013.
Ethiopia: Sinoma has also announced that it has contracted Loesche as the sole supplier of grinding technology for the construction of the Menagasha grinding plant, which is being constructed by Dangote. Delivery will be in early 2014.
Four Loesche mills will be included in the process; a 450t/hr LM 69.6 for raw material grinding, a 50t/hr LM 28.3D for coal grinding and two LM53.3+3C mills will be used for grinding clinker additives such as gypsum, limestone and pumice.
In addition to the mills and the mill motors, Loesche will deliver metal detectors and mill rotary feeders. The supply is a split-up of Loesche key parts and a Chinese manufactured portion arranged by Sinoma International under supervision of Loesche.
Both the plant elevation of 2600m above sea level and the very poor grindability of the cement raw material represents a special challenge for the layout of the grinding equipment in this case.
Dangote reopens Gboko plant
01 February 2013Nigeria: Nigeria's Dangote Cement re-opened its Gboko cement plant on 31 January 2013. The plant, which represents 20% of Dangote's production in the country due to its 4Mt/yr cement capacity was shut by the company in early December 2012, citing a glut in the market caused by imported cement from Asia.
"Since the shutdown of the Gboko Cement Plant, the government has been engaging local cement manufacturers in discussions and trying to find solutions to the challenges facing the industry," said Dangote in a statement. It added that the decision to re-open followed a meeting between President Goodluck Jonathan and the firm's chairman Aliko Dangote.
At the end of December 2012, Dangote Cement said that it expected its first quarter pre-tax profit to rise by 39% year-on-year to around US$267.8m. Dangote has expanded aggressively in recent years, supplying a construction boom in Africa's second-biggest economy and most populous nation. It plans to grow its Nigerian production to 29Mt/yr by 2015 and is also building cement plants across Africa, although cheap imports from Asia are seen as a threat to margins.
Dangote announces new Zambian plant
30 January 2013Zambia: Dangote Cement is set to open another US400m cement plant in Lusaka in 2014, bringing its total investment in Zambia to US$800m according to executive director Monica Musonda.
"The opening of the Dangote Ndola plant, which is situated in Masaiti, will make Dangote the biggest cement producer in the country producing 3000t/day," said Musonda. "The local cement production scenario will never be the same again with the coming of Dangote, which has now entered the Zambian market." She added that plans to open another 1.5Mt/yr capacity plant in the capital city after the completion of the Ndola plant in 2014 have reached an advanced stage.
China's Sinoma International Engineering has been hired to build the new Dangote plant. The chosen contractor would be announced once the construction process takes off. Musonda said, that like the Dangote Ndola plant, the Lusaka plant would be constructed using the latest, environmentally-friendly technologies that are commonly available in Europe and the United States.
Dangote's regional commercial manager Venkie Srinivasan said in an interview that his company expected a 40-45% share of the Zambian cement market after the opening of the Ndola plant in the third quarter of 2014. Srinivasan said that Dangote Industries in Zambia was set to meet the demand on the local construction and mining sector. He added that any excess cement would be able to compete favourably in the regional export market, including Democratic Republic of Congo (DRC).
Elsewhere, Zambia's Southern Province permanent secretary Chileshe Mulenga announced that a consortium of Indian investors are planning to invest US$10bn in various industries in the region including the construction of a new cement plant.
Sinoma places Dangote mill order with Loesche
17 January 2013Nigeria: German vertical roller mill (VRM) producer Loesche GmbH has been awarded a contract for five new VRMs from China's Sinoma International Engineering, which is building a two kiln extension to the existing Dangote Cement Ibese plant. Loesche previously delivered equipment for the first and second lines at the same plant.
The five VRMs to be supplied are two 450t/hr Loesche Mill Type LM69.9 for raw material and three 310t/hr cement LM 63.3+3C cement mills. As with previous work at Ibese, the high moisture of the material of up to 20%, the sticky nature of the raw material and the low grindability of the raw material represent special challenges for the project.
In addition to the mills and the mill motors, Loesche will deliver metal detectors and hopper discharge feeders. The supply of the equipment will be split between Loesche, which is supplying key parts, and a Chinese-manufactured portion arranged by Sinoma International under supervision of Loesche. Delivery is scheduled at the end of 2013.
Plant mothballing causes protests in Benue State
11 January 2013Nigeria: The people of Benue State have protested against the continued closure of Dangote Cement's Gboko plant. The plant has been temporary shut down as a result of an alleged cement 'glut,' which cement producers say is being caused by massive cement imports.
A statement from Dangote Group said that the chairman, Gboko Local Government, Nahan Zinda decried the continued closure of the Dangote plant, saying that his local government is losing vast sums of revenue and that the closure was having knock-on effects in other areas of the economy, including trading stalls outside the factory. Zinda called on the federal government to expedite action by doing all it takes for the factory to reopen.
"Since the company was closed, cement prices have risen," said Zinda. "Our people have been jobless and suffering. It may also lead to anti-social behaviours. Our women, who have petty businesses outside the gate, are also complaining bitterly," he said.
Grace John, who spoke on behalf of women traders in Gboko, said that social and commercial activities have virtually come to a halt and that life was becoming difficult. She appealed for the quick reopening of the plant in the interest of women traders.
Benue State Commissioner of Finance Conrad Werbga said, "Importation impacts negatively on the economy. It causes lots of ripples. It comes with attendant negative consequences for our nation. The federal government must do all it could to reverse the trend."
All parties will be keen to keep disruption caused by the plant closure to a minimum. On 17 August 2011, a dispute between a trader and cement plant worker rapidly escalated to a full-scale riot, with 20 deaths and widespread looting in Gboko.
Nigeria’s overly neat cement industry
09 January 2013Nigeria's Minister of Trade and Investment, Olusegun Aganga brought together warring parties from Dangote and Ibeto Cement this week to discuss their very public spat about the state of the country's cement industry.
Claims that Nigeria is facing a 'glut' of cement have been building since the Cement Manufacturing Association of Nigeria (CMAN) declared that Nigeria was 'self-sufficient' in cement in late 2012. So when leading cement importer Ibeto Cement questioned this narrative, leading cement producers Dangote and Lafarge hit back. Aganga then announced a review of the country's industry.
Despite Nigeria's potential to consume cement, something is stopping it. Yet, as Ibeto Cement rightly asked, if Nigeria is producing too much cement why isn't the price falling?
Hard facts about the Nigerian cement industry are elusive. This is what we know. Nigeria's population is apparently 170m. Its cement industry has the capacity to produce 28Mt/yr (Global Cement Directory 2013). Its production level was 18.5Mt/yr in 2012 according to CMAN. However figures compiled by the United States Geological Survey placed production much lower at 11.6Mt in 2011. Consumption is believed to be 17-20Mt/yr. In 2011 it was 17Mt. Ibete Cement, the sole importer into the country, is allowed to import up to 1.5Mt/yr.
Nigeria's main producers include Dangote (19Mt/yr capacity, 70% of the market), Lafarge WAPCO (4.6Mt/yr, 17%), Unicem (2.5Mt/yr, 9%) and Ashaka Cement (2Mt/yr, 7%).
Hype about Nigeria's potential as a cement-producing nation hinges upon its low per capita consumption (110kg) compared to some of its African neighbours and indicators of expected growth such as a housing deficit of 16 million homes.
CMAN boss Joseph Makoju addressed this head-on, blaming the high cost of haulage and energy. He said that the energy cost accounts for over 35% of the production cost and that the price of low pour fuel oil (LPFO) had risen by over 300% from US$0.16/l in 2009 to US$0.69/l in November 2012. It should be pointed out that Makoju is also the special adviser to the president of Dangote Group, Aliko Dangote. Unsurprisingly he has advised the Federal Government to impose higher taxes on imported cement to discourage imports.
The production boom of recent years has been threatened by a weakening increase in demand. The gap between production and lower consumption estimates is around 1.5Mt. Dangote and Lafarge WAPCO's combined unsold stock at the end of 2012 was also just below 1.5Mt. Both figures are suspiciously close to the amount Ibeto is allowed to import annually. As usual, the easiest target is the cement importer. Dangote's political clout as a key Nigerian company, large-scale employer and all round African success-story will doubtless help its argument.
Yet if imports are really more competitive than Nigeria's domestic product how can the country possibly hope to export cement? Also this week Liberia announced it has relaxed its tariffs on cement. As luck would have it Dangote is building a new cement plant in the country. Sounds ideal for tricky import negotiations.
Liberia drops tax on cement
09 January 2013Liberia: President Ellen Johnson Sirleaf of Liberia has suspended tariffs on cement. The government cited that the move was in the interest of national reconstruction and development.
Under Executive Order No. 46, titled 'Re-Instituting the Suspension of the Protective Tariff on Cement,' the Liberian government has repealed a US$2 protective tariff per 50kg bag of Portland cement imposed under the Revenue Code of Liberia, tariff No. 25.23. The mandate added that the need still exists to encourage local industries to supply cement to the general public at reasonable prices.
Liberia currently has one cement grinding plant, the Liberia Cement Corporation, a subsidiary of HeidelbergCement which employs 63 people. In 2012 Nigerian cement producer Dangote announced plants to build a US$35m plant in the country.