Displaying items by tag: Dangote Cement
Nigeria: Dangote Cement says it has resumed exporting clinker from its Onne and Apapa terminals to Cameroon. Two ships delivered 57,000t of clinker and 0.34Mt of clinker was exported by road in the first half of 2021. The cement producer started exports in 2021 but was forced to suspend them in April 2021 following high demand for cement domestically.
The group’s revenue grew by 44.8% to US$1.68bn in the first half of 2021 from US$1.16bn in the same period in 2020. Cement sales volumes rose by 26.1% to 15.3Mt from 12.1Mt. Its earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 61% to US$853m from US$530m. In Nigeria cement demand was attributed to increasing housing infrastructure, commercial construction and government projects including roads and railways. Outside of Nigeria, strong performance was noted in the Republic of the Congo, Cameroon, Ethiopia, Senegal and Tanzania.
“This strong intrinsic performance is magnified by the lower second quarter results in 2020 due to the effect of Covid-19. The growth trend continues and we are focused on meeting the strong market demand across all our countries of operation,” said chief executive officer Michel Puchercos. He added that the group restarted clinker exports from Nigeria in the second quarter of 2021 following a ‘strategic decision’ to pause them in response to high demand domestically. The cement producer intends to commission its new 3Mt/yr Okpella plant in the third quarter of 2021. He also said that the company’s ongoing alternative fuels project is at an ‘advanced stage’ with procurement and installation of equipment occurring at all plants.
Low carbon cements go global
28 July 2021Holcim has started to unify its low carbon cement product range this week with the launch of its ECOPlanet label globally. The products are already available in Germany, Romania, Canada, Switzerland, Spain, France and Italy. The plan is to extend this to 15 countries by the end of 2021 and then to double its ‘market presence’ by the end of 2022.
The headline news is that the range will include what Holcim says is the world’s first cement product with 20% recycled construction and demolition waste. This appears to be an improvement on the group’s Susteno cement products that use fine fractions from concrete and demolition waste. This product is currently sold in Switzerland where it is advertised as saving 10% of CO2 emissions compared to a standard cement product. Both Holcim and HeidelbergCement already sell concrete products that use the coarse waste from building demolition. Other than this, Holcim says that the range will also include cements that contain calcined clay. In June 2021 subsidiary Lafarge France announced that it would produce a cement product under the ECOPlanet banner using kaolin clay with its proprietary ProximA Tech process at its integrated La Malle cement plant in Bouc-Bel-Air.
We will have to wait and see how far Holcim goes in standardisng the range between different countries. Yet, judging from what the countries that are already selling ECOPlanet are doing, it looks like it will be a variety of blended cements. At present, for example, Holcim Germany offers four products in the ECOPlanet range. These are all slag cements, with three having effective CO2 reductions of up to 70% and the fourth, ECOPlanet Zero, reaching 100% through a carbon offsetting scheme in conjunction with MoorFutures. Holcim Italy also launched a product in the range called ECOPlanet Prime using calcined clay in June 2021.
Incidentally, LafargeHolcim US announced a research project this week with the US Army about using demolition waste. It’s going to start working with the US Army Corps of Engineers’ Engineer Research and Development Center and Geocycle to look at how construction and demolition materials from military installations can be used for energy recovery and mineral recycling. Group resources at Geocycle’s Holly Hill Research Center in South Carolina, US and Holcim’s Global Innovation Center in Lyon, France will be used in the scheme.
Other low carbon cement products are available of course. Holcim is far from alone in launching low CO2 cement and concrete products. Yet the use of worldwide brand names is different. Cemex is doing something similar with the global rollout of its Vertua concrete products. It first launched Vertua in France in 2018 before going global in 2020. Holcim started to launch ECOPact Concrete in 2019. Now, Holcim has gone further by doing the same thing with cement. Given how localised cement and concrete products are, it will be instructive to see how global branding for low carbon cementitious products helps these companies. For instance, who is the target audience? It could be eco-minded self-build customers or project specifiers or government departments or industry lobbyists. Or perhaps it is simply another marketing channel to reinforce the sector’s sustainable offerings.
The other point worth considering is when will the multinational cement producers start selling sustainable cements and concretes in less rich parts of the world? While Holcim was playing with blended cements and marketing this week, Dangote Cement said that it was ready to start commissioning its new 6Mt/yr integrated plant at Okpella, Edo State in Nigeria. Another 5Mt/yr plant is also on the way in the country from Madugu Cement. It has just signed a contract for China-based Sinoma International Engineering Company to build it. When Holcim and the other cement companies start selling low carbon cements in places like Nigeria then the rise of these products will be complete.
Nigeria: Dangote Cement says that its new 6Mt/yr cement plant at Okpella in Edo state is ready to enter cement production. The Daily Independent newspaper has reported that group invested US$1bn in the plant. China-based Sinoma International Engineering Company supplied engineering, procurement and construction (EPC) services. When commissioned, the plant will employ 6000 people, according to the owner.
Dangote Cement is in the process of establishing a further 6Mt/yr cement plant at Itori in Ogun state. The launch of both plants will give the producer an active cement capacity of 41.3Mt/yr. The company says that its aim is to increase the uptake of cement in Nigeria. It said, “We still need to do more to make the cement get to the poorest of the poor.”
Tanzania: The High Court of Tanzania has ordered G4S Secure Solution to pay Dangote Industries Tanzania US$0.33m for theft and loss of property. In 2018 the security company attempted to sue the subsidiary of Nigeria-based Dangote Cement was for failing to pay for its services, according to the East African newspaper. However, Dangote Cement raised a counterclaim in response due to multiple thefts that it blamed on poor security services.
Dangote Cement completes US$734,000 bond issuance
17 June 2021Nigeria: Dangote Cement has successfully issued 50bn fixed rate senior unsecured bonds. The total value of the multi-instrument issuance programme is US$734,000. The proceeds of the bond issuance will be used to pay for expansion projects, short-term debt refinancing and working capital requirements.
Sephaku Cement’s chief Pieter Fourie dies
26 May 2021South Africa: Pieter Fourie, the chief executive officer of Sephaku Cement, has died. He passed away on 19 May 2021 following suffering a stroke earlier in the month. He is survived by a wife, three children and five grandchildren.
Fourie became the head of the subsidiary of Nigeria-based Dangote Cement in 2007. He later became a board director of the company in 2009 after its stock market listing. His previous roles included being marketing director of Blue Circle, which was subsequently acquired by Lafarge South Africa, the managing director of the cement business unit of Lafarge South Arica and Strategic Development Director for Africa based at the Lafarge head office in France. Fourie’s role at Blue Circle included sales, distribution and marketing before being promoted to managing director of the cement business. He subsequently accepted the assignment at Lafarge’s head office in a strategic development role to integrate the newly acquired business in Africa into Lafarge’s portfolio.
Dangote Cement to increase Nigerian cement production capacity by 4.5Mt/yr by September 2021
18 May 2021Nigeria: Dangote Cement says that work is underway to increase its total cement production capacity in Nigeria by 4.5Mt/yr before September 2021. The Guardian newspaper has reported that plans consist of new lines at the company’s cement plants in Obajana, Kogi state, and Okpella, Edo state, and the restart of production at its plant at Gboko, Benue state. Sales and marketing director Rabiu Umar said that the reason behind the decision was a surge in demand leading to a ‘sold-out’ situation in the country. He added that the firm has also ceased its export programmes in order to better serve the needs of domestic consumption.
Nigeria: Dangote Cement’s revenue grew by 35.5% year-on-year to US$874m in the first quarter of 2021 from US$655m in the same period in 2020. Cement sales volumes rose by 18.7% to 7.5Mt from 6.3Mt. Earnings before interest, taxation, depreciation and amortisation (EBITDA) increased by 56% to US$468m from US$300m. Revenue and sales volumes increased fastest in Nigeria but earnings increased faster in the rest of Africa.
“We took the strategic decision to pause our clinker exports to ensure we meet the rapid volume growth in the Nigerian domestic market. We are improving the output of our existing and new assets and aim to recommence clinker exports in the second quarter,” said Michel Puchercos, the company’s chief executive officer. He added that the company had also ramped-up its new 3Mt/yr Obajana Line 5.
The price of cement in Nigeria
28 April 2021For those not following the news in Nigeria, a nationwide row has broken out about the cost of cement in the country. Two of the three main local producers have been forced to publicly defend their pricing. Alongside this, the Senate of Nigeria has implored the federal government to encourage further local investment in cement production with the goal of keeping the end price down.
The current debacle started to take form in the autumn of 2020 when the price of cement leapt up by 35%. Builders and those immediately affected started complaining then but the argument really heated up in April 2021 when the local press started comparing the price of cement in Nigeria unfavourably against neighbouring countries. Dangote Cement, one of Africa’s largest cement producing companies and a Nigerian-based one at that, immediately defended itself by pointing out that its ex-factory price was the same or lower than in other African countries. It added that it could not control the price of cement between its factory and the end-consumer with dealers and middlemen benefiting from the gap. A week later the Senate of Nigeria intervened with its members discussing the issue in relation to a bill intended to liberalise the sector. This week, BUA Cement said publicly that it had no plans to raise the ex-factory price of its cement at the present time or in the future, “…barring any material, unforeseen circumstances.”
The roots of the current crisis go back to the mid-2010s when Nigeria declared itself ‘self-sufficient’ in cement after building up its domestic production capacity. At the same time it discouraged imports and embraced exports. Today, the country’s cement production capacity is around 49Mt/yr and annual demand is around 21Mt. This self-sufficiency path reached one milestone for Dangote Cement in 2020 with clinker exports starting from its Apapa terminal and the commissioning of its Onne Export Terminal in Port Harcourt. Under the old narrative for the sector this was a moment for congratulation. Suddenly though, instead of being seen as the saviour of the industry, members of the legislature were asking whether it was a good thing for Dangote Cement to hold a 60% share of the local market with most of the rest shared between Lafarge Africa and BUA Cement.
The price row has seen Dangote Cement promptly suspend exports from those new terminals. It also said it had reactivated its 4.5Mt/yr Gboko plant in Benue State, which was reportedly mothballed in 2018. It is worth noting here that the Gboko plant was part of that national capacity total above despite being mothballed until fairly recently. Aside from the middleman argument, the producer said that its production costs had risen over the past 15 months due to negative currency effects but that it hadn’t increased its ex-factory prices since December 2019.
A survey by the News Agency of Nigeria in the north-east of the country revealed all sorts of speculation about why the price was so high but few facts. Some of the opinions expressed included: the coronavirus outbreak; low production rates at the plants; market middlemen; and transport costs. What is clearer is that the country’s cement production capacity is more than double that of its demand. On paper at least the nation should be able to satisfy its own needs and then export the same again with plenty spare. Yet somehow this isn’t happening. If the government really believes in self-sufficiency it may be time to take another look at the cement sector, the challenges it faces and the needs of the end consumers.
Dangote Cement justifies price in Nigeria
14 April 2021Nigeria: Dangote Cement says that the price of cement from its plants in Nigeria is the same as from plants in other countries in Africa or cheaper. The cement producer made the announcement in response to local media reports that its prices were allegedly lower in Ghana or Zambia, according to the Vanguard newspaper. It added that it had control over its ex-factory prices but that it could not set the end market price.
Dangote Group Executive Director, Strategy, Portfolio Development and Capital Projects Devakumar Edwin explained that Dangote Cement has a 60% share of the local cement market at present. Demand for cement has risen following the coronavirus pandemic and the company has had to suspend exports from its recently commissioned export terminals in order to meet local demand. He added that it has also reactivated its 4.5Mt/yr Gboko plant in Benue State, which was closed in 2018, to cope with the situation.