Business
Dangote Cement on track to double production capacity in 2014
Aliko Dangote – Founder and Chairman Dangote Group
Nigeria’s biggest company by market capitalization, Dangote Cement, expects to double its cement production capacity across Africa this year to 40 million metric tons ( 44.092 million tons).
The company will add 9 million tons to its Nigeria operations, bringing them to 29 million tons, and open plants across Africa that have been several years in the making, adding a further 11 million tons.
Dangote Cement, owned by Africa’s richest man Aliko Dangote with a personal fortune of US$25 billion, saw its 2013 profits increase by 40 percent to 190.76 billion naira (US$1.16 billion), from 135.64 billion naira (US$ 825 million) a year earlier.
Dangote has cement plants spanning Africa, from Senegal to South Africa, but most have been in construction phase and between them they contribute less than a million tons to the group’s current overall production capacity.
That will change this year, as plants in Senegal, Sierra Leone, Cameroon, Zambia, South Africa and Ethiopia come into operation in the current year.
Additional capacity in Ivory Coast, Ghana, Liberia, Tanzania, Congo and in Nigeria would mean that by mid-2016 Dangote Cement would have a 60 million ton capacity.
Almost all of this expansion has been funded with internal cash flows, unlike rivals firms.
Other cement majors borrowed heavily for mergers. One of the key reasons Dangote Cement has been able to grow aggressively in the African market is because they are cash strapped while Dangote Cement does not have that problem.
Dangote’s main rival in its home market is France’s Lafarge.
Dangote has long said it intends to list in London, although a plan to do so last year has been put back.
According to company executive, Devakumar Edwin, the reason it was taking time to list was that investors had not fully appreciated the value of Dangote’s non-producing assets outside Nigeria. “But that is changing,” Edwin said, adding the company hoped to list some time next year.
Source: Reuters