Displaying items by tag: Nigeria
CDP raises Dangote Cement’s climate rating
22 December 2022Nigeria: The CDP has raised its rating for Dangote Cement to B from B- previously. The improved score indicates that the cement producer made continued efforts to mitigate the environmental impact of its business and has improved its sustainability reporting. It is the fourth time the company has submitted data to the CDP and the second consecutive year it has improved its rating.
Michel Puchercos, the chief executive officer of Dangote Cement, said, “The CDP rating upgrade clearly illustrates the growth we have achieved in our commitment to transparency on climate and environmental issues. This year, our Alternative Fuel Project has reached an advanced stage and aims to leverage waste management solutions and reduce CO2 emissions. As of the first nine months of 2022, we co-processed 101,553t of waste representing a 77% increase over last year.”
Dangote Cement to commence 10% share buyback
14 December 2022Nigeria: Dangote Cement’s shareholders have authorised a buyback of up to 10% of the company’s issued shares.
Chair Aliko Dangote said “Over the past decade, Dangote Cement has recorded exponential growth across all areas. Group cement volumes are now at almost 30Mt/yr, our production capacity has tripled to 51.6Mt/yr and we export cement from five countries across Africa.”
BUA Cement allegedly considering legal action over gas price rise
06 December 2022Nigeria: The Daily Independent newspaper has reported that BUA Cement is allegedly preparing a 'multi-million dollar lawsuit' against its gas supplier, Greenville Liquefied Natural Gas (Greenville LNG). The supplier reportedly raised prices, as stipulated in the parties' gas supply contract, following an increase in its costs. Greenville LNG attributed the increase to the dilapidation of roads and collapse of upstream gas infrastructure due to flooding, as well as a lack of access to imports. It said that none of its 44 other industrial customers has challenged the price change.
Greenville LNG chair Eddy Van Den Broeke said "It is not a breach of contract because not only are we continuing the gas supply to the BUA cement plant in Sokoto, but also because we are discussing in good faith the changed business and economic conditions that afflict both companies." He concluded “In this case, we only activated the contractual price adjustment clause. We cannot explain how it is possible that social media misrepresented so grossly the present circumstances and the conditions of our contract, which were not reflected at all."
Nigeria: Dangote Cement's consolidated sales grew by 15% year-on-year to US$2.66bn during the first nine months of 2022 from US$2.31bn in the same period in 2021. In Nigeria the company recorded cement and clinker sales volumes of 13.5Mt, down by 4.7% from 14.1Mt. In the rest of Africa its cement and clinker sales were 7.37Mt, down by 9.7% from 8.16Mt. The group recorded consolidated earnings before interest, taxation, depreciation and amortisation (EBITDA) of US$1.17bn, up by 0.2% from US$1.16bn.
Throughout the first nine months of 2022, Dangote Cement co-processed 102,000t of alternative fuel in its cement production, up by 77% year-on-year from the corresponding period of 2022.
BUA Cement's profit and sales rise in first nine months of 2022
31 October 2022Nigeria: BUA Cement's nine-month 2022 results showed a 41% year-on-year rise to US$596m from US$424m in the same period of 2021. Meanwhile, its profit after tax grew to US$168m, up by 12% from US$150m. Throughout the period, BUA Cement's cost of sales rose by 43% to US$324m from US$226m.
Obstacles for Obajana
26 October 2022Dangote Cement’s Obajana plant has been the focus of an argument between the cement producer and the Kogi State Government (KSG) in recent weeks. The integrated plant was forced to close in early October 2022 and then reopened in mid-October 2022 following an order by the Federal Government. The dispute then entered a legal phase, with the state government taking Dangote Cement to court. The case is ongoing.
The current stage of the disagreement dates back to late August 2022 when the Kogi State House of Assembly reportedly set up a committee to investigate the shares that the state owned in Dangote Cement and other organisations as part of an initiative to examine tax revenue from mining companies. By the end of September 2022 this had turned into a discussion about how exactly Dangote Cement had originally acquired its shares in the Obajana cement plant in Kogi state as well as how much tax it was paying. In early October 2022 the local government ordered the closure of the plant. Events then turned nasty as local vigilantes attacked the plant and hurt some of its staff. In the general unrest that followed the Kogi State House of Assembly was destroyed in a fire. The plant partially reopened fairly quickly and then fully once the Federal Government intervened. Legal action was then started at the Kogi High Court.
Unusually for this kind of disagreement both sides have published detailed information on their respective arguments. Dangote Cement’s parent company Dangote Industries outlined how it originally came to build and own the Obajana cement plant. In short, it signed deals in 2002 and 2003 to buy a 100% stake in Obajana Cement from the KSG, before the plant was built, with the proviso that the state could later buy a 5% share within five years. Dangote Industries then independently financed and built the plant and Obajana Cement later became Dangote Cement. Crucially, according to Dangote Industries, KSG never bought its 5% share. On the opposing side, the KSG has published what it says is the original contract and annexes that it signed with Dangote Industries. This agrees with some of what Dangote Industries has said, especially the part about the option to buy a 5% stake within five years. However, according to reports in the local press, KSG is attempting to persuade the judiciary to cancel the original contract on the grounds that it lacked clear consideration of what should pass from the state to Dangote Industries in return for giving the latter full ownership of Obajana Cement. In other words, the KSG is querying whether the contract is valid given that it received apparently nothing for giving a company away.
The Obajana cement plant was later built and it became operational in 2007. Today it is the largest cement plant in Nigeria and one of the largest in Africa. It produces around a third of the country’s cement and this is why its closure earlier in October 2022 became a national issue. Since the early 2000s Dangote Cement has become the biggest cement producer in Sub-Saharan Africa. It is both a success story for the region and the world.
There may be issues with the perceived or actual contribution Dangote Cement is making locally in Kogi State. These are the kinds of issues that both companies and governments contend with continually. Companies consider where it is cost effective to place investments and governments try to entice them. It is possible that the KSG gave Obajana Cement to Dangote Industries in what it retrospectively considers is a poor deal. It is also possible that Dangote Cement has not paid sufficient tax, although it strongly denies this, and the KSG seems to have moved on from this line of attack. What may be the bigger issue here is if Dangote Cement is perceived to have not paid its dues in Kogi State. However, it seems odd that the KSG would suddenly decide to go after Dangote Industries nearly 20 years after agreeing to the deal. It also seems strange that no lawyer for either party flagged the consideration issue at the time. Thankfully calmness has now prevailed in the state and the cement plant remains open. It is for the courts to decide the validity of the original contract between Dangote Industries and the KSG.
Kogi State government takes Dangote Industries to court
21 October 2022Nigeria: The government of Kogi State has filed a lawsuit against Dangote Cement's parent company Dangote Industries. The state government claims no payment was received for Dangote Cement's acquisition of the Obajana cement plant upon its privatisation in 2002, according to the Advocate newspaper. If the legal case is successful it could void the cement producer’s contract with the state government.
The National Security Council ordered the reopening of the Obajana cement plant in the national interest on 14 October 2022, following its closure by order of the Kogi State Assembly.
India: Shree Cement has appointed Neeraj Akhoury as its designated managing director. Hari Mohan Bangur has also been appointed as chair and Prashant Bangur as Vice Chair. All these personnel changes are subject to approval by the members of the company. In addition, Gopal Bangur has resigned as chair and will become Chairman Emeritus.
Akhoury holds nearly 30 years of professional experience in the cement and steel sectors. He began his career in 1993 at Tata Steel, working for both the cement and steel divisions. He joined Lafarge India in 1999 and worked as member of the Executive Committee responsible for corporate affairs followed by sales. In 2011, he moved to Nigeria as the head of Lafarge AshakaCem. Later, he was appointed as Strategy & Business Development Director for the Middle East & Africa at Lafarge’s headquarters in Paris. He became the head of LafargeHolcim Bangladesh in 2015 and then was appointed as the head of ACC in 2017 and Ambuja Cement in 2020.
Akhoury is a graduate in economics from Allahabad University and holds a Master of Business Administration (MBA) from the University of Liverpool. He has also studied one-year General Management Program at XLRI Jamshedpur and is an alumunus of Harvard Business School.
Nigeria: The government of Kogi State ordered Dangote Cement to shut down its Obajana cement plant within 48 hours on 13 October 2022. Kogi State Governor Yahaya Bello also ordered the release of impounded Dangote Cement trucks across the state.
Bello thanked Kogi residents for their “resoluteness in the ownership impasse between Dangote Group and the state government.” He added, "While the state government recognises the right of the citizens to peaceful protest, as we witnessed across the state yesterday, we urge people to remain civil and law abiding and to give room for constitutionalism. Breakdown of law and order will not be in the interest of anyone."
Lorry drivers blocked the Abuja - Lokoja road in protest against the closure on 14 October 2022, according to the Advocate newspaper. Meanwhile, a gang has raided the plant, destroying property and shot firearms at the 27 employees who remained on site.
Dangote Cement rejects Kogi State Assembly arson allegation
11 October 2022Nigeria: Dangote Cement has denied the Kogi State government's purported accusation that it sponsored an arson attack on the state legislative assembly complex. The Punch newspaper has reported that a fire destroyed the Kogi State House of Assembly on the night of 10 October 2022. Dangote Cement helped to extinguish the fire at 8AM on 11 October 2022, sending one of its fire engines to the scene of the disaster. The state government published a statement entitled 'Obajana: desperation sets in as imported hoodlums burn down Kogi Assembly,' in which it allegedly suggests that Dangote Cement had some involvement in the fire's outbreak ‘in an attempt to possibly destroy evidence relating to the ownership tussle between the Kogi State government and Dangote Group over the Obajana Cement Company.’
Dangote Cement's chief branding and communications officer Tony Chiejina said “As a socially responsible corporate entity, we refute this allegation and condemn this unprofessional and irresponsible attempt to smear our image before local and international investors, and thus erode our brand value. Dangote Group would never stoop so low as to sponsor thugs to destroy any property, whether it belonged to the government or an individual. This runs contrary to our business ethos and everything we stand for as a leading manufacturer with teeming customers and consumers across Nigeria and Africa. Our lawyers have been mandated to react appropriately to the damaging allegation from the Kogi State government within the full extent of the law." Chiejina concluded “We urge our stakeholders and the public to disregard such irresponsible and insane statements, as we ask all our stakeholders, namely shareholders, customers, suppliers, employees, and the entire community of Obajana and Kogi State at large, to remain calm while we follow the legitimate and lawful process to resolve this matter with the state government.”