Business
Dangote Cement expands into Tanzania – to ease on pressure on current pricing
Aliko Dangote – Founder and Chairman of the Dangote Group
Dangote Cement, a subsidiary company of Dangote Group, continues its dominance on the African continent, with a new cement factory expected to begin production in 2015 in the Mtwara – south eastern port town in Tanzania.
According to Aliko Dangote – the founder and chairman of the Dangote Group, the impact of the project will be to ease pressure on prices of the construction product in the east African country.
Dangote cement intends to find ways of countering costs that arise as a result of distribution difficulties as one way of reducing pressure on cement prices.
The Nigerian entrepreneur was responding to questions from reporters who sought to know how the US$500 million investment would handle such a challenge that affects many local and commercial builders. “When the plant starts work next year, we would look at how to reduce pressure on price of cement.
“There has always been a gap in cement production,” Dangote pointed out. He also confided with reporters that this investment in Tanzania, which will create the biggest cement factory in East and Central Africa, does not belong to any group or cartel – if such exist in the industry, and as such would not engage in what some may view as “unfair pricing.”
The price of cement per tonne remains relatively high averaging between US$90 – US$105 due to high energy costs and dependence on imported materials. A 50 kilogram (110 pound) bag of imported cement retails at US$7.8 while locally produced brands are selling at between US$8 and US$9.3.
Dangote also reported that in order to handle the challenges of getting skilled local labor in Tanzania for the company’s operations, they would be taking Tanzanian engineers to the Dangote Academy near Abuja, Nigeria for training.
