Group Chief Executive Officer of Dangote Cement, Joseph Makoju says the company has so far invested $3bn to build manufacturing plants and import/grinding terminals as part of its Pan-Africa diversification strategy.
Makoju, who addressed a conference call on Friday, following the release of the group’s half year 2018 result, listed such investments as the 1.5Mta clinker grinding plants each in Cameroon; Congo, Ghana (import), Zambia and Senegal.
Others include the 2.5Mta plant in Ethiopia, Sierra Leone (0.7Mta import), South Africa (2.8Mta) and Tanzania (3.0Mta).
Commenting on the group’s future growth plans, he spoke of a renewed “focus on building new grinding plants along the coast of West Africa, and ensure we have clinker export facilities in Nigeria. We are looking at the possibility of two new lines in Nigeria, perhaps by the end of 2020 and its likely these will be in Edo state and Obajana, with a combined capacity of 6Mta”
On the second quarter performance score-card, Makoju, explained that while total Nigeria sales volumes went up by 13.9% to 7.8Mt, the Pan-African volumes dropped by 3.9 per cent, mainly due to the shut-down in Tanzania.
In all, he assured the analysts: “Our first-half performance was very strong and driven by an excellent recovery in Nigeria, where our sales volumes increased by nearly 14% and revenues rose by more than 18%. Pan-African operations saw a slight fall in volumes but both revenues and EBITDA increased because of better pricing and currency conversion effects.
“In addition, we achieved the largest-ever issuance of Commercial Paper by a Nigerian company when we issued ₦50B Series 1 & 2 Notes at the end of June, with a discount rate that reflected the strength of our company and its excellent credit ratings.
“Of course, our strong performance has been overshadowed by the tragic and heartbreaking events in Ethiopia. I would like to pay tribute to my colleagues Deep Kamra, Beakal Alelign and Tsegaye Gidey and offer our sincere condolences to their families,” he added.
Explaining the rationale behind the success recorded in revenue, he said “… the increase was helped by our decision to increase our use of local coal in Nigeria and that also helped to improve our fuel security, maintain production uptime and it reduced our need for foreign currency. We source coal from our parent company, Dangote Industries and from another Nigerian supplier, and we are very happy with the way this has worked out for us because it has enabled us to phase out the use of expensive low pour fuel oil in our kilns and also to reduce our use of imported coal”
A statement by the company recalled its Chairman, Alhaji Aliko Dangote, as telling shareholders during the company’s recently concluded annual general meeting (AGM), that the 31% increase in the company’s revenue of N805.6bn, for the 2017 financial year, is attributable to its pan African operations growth which also recorded a significant increase in revenue from N195bn to N258.4bn in 2017.
According to him: “Pan African operations increased volumes by 8.4%, with Ethiopia, Senegal, Cameroon and South Africa all performing strongly and close to their operating capacity.”
Noting that the company experienced some challenges in operating in sub-Saharan Africa, Dangote said the management responded in robust fashion and benefited from “…the diversity we have created across our business and because of our local knowledge and attitudes towards doing business in neighboring countries in Africa.”