Business
Dangote Cement looking to expand into Asia
Dangote Group founder and chairman, Aliko Dangote, has revealed that he is expanding his cement empire to Asia and it will be operational in 30 months.
The 58-year-old Nigerian billionaire said Dangote Cement Plc – a subsidiary company of the Dangote Group – should complete a factory in Nepal by the end of 2017. It has received 90 percent of the regulatory approvals needed to start construction in the south Asian nation hit by two earthquakes this year, he said.
“It is going to be one of the first factories for us to build outside our comfort zone, outside Africa,” Dangote, said in a June 16 interview at his office in Nigeria’s commercial hub, Lagos. Further expansion beyond Africa mainly “will happen through acquisition,” he said.
Dangote, who has never visited Nepal, will invest US$400 million in the country to build a cement plant with a capacity of as much as 2 million metric tons. He is also eyeing South America and surveying for limestone in Brazil, where he registered a company 2 years ago.
Nepal’s government estimates reconstruction costs from April’s earthquake, which killed thousands, alone will exceed US$10 billion.
“It will be a major boost for them, especially with what happened,” Dangote said. “They don’t produce cement at the moment, they import mainly from India.”
There is room for Dangote to move into Nepal, said Andy Gboka, a fund manager at Bellevue Asset Management AG, which manages more than US$5 billion and holds Dangote Cement shares.
“There is not enough production capacity and unfortunately you saw what happened with the earthquake and the infrastructure that was damaged,” Gboka said by phone from Zurich. “Even though this is coming from a negative event, there is a strong growth story in the Nepal region.”
Dangote, has made the vast majority of his fortune in African cement production. He also has interests including sugar and more recently oil refineries in Nigeria.
Dangote’s charity gave US$1 million to Nepal’s government after the deadly earthquakes. He said he has made more than US$100 million of donations in more than 2 years, mainly in African countries such as Nigeria, Niger, Kenya, Tanzania and Ebola-hit nations in West Africa.
