Dangote plans big growth in African cement capacity

Bloomberg | Aliko Dangote, is looking to expand cement capacity on the continent by 29 percent to 62 million tons, entrenching his flagship company’s position as the the continent’s biggest producer of the construction material.

The billionaire plans to add 6 million tons in Nigeria next year, taking volume in Dangote Cement Plc’s home market to 35 million tons, he said in interview on Bloomberg Television. The rest of the expansion is planned mainly in West Africa, including Niger and Cote d’Ivoire (Ivory Coast).

The 62-year-old told shareholders in June the company plans to open plants in Nigeria that will allow it export clinker to grinding plants in Cameroon and West Africa.

Dangote, who is building one of the world’s biggest refineries in Lagos, Nigeria’s commercial capital, in addition to investments in gas and petrochemical plants, said he expects total group revenue to grow to about US$30 billion from US$4 billion when the plants start operations in the next 2 years.

Thereafter, plans include investing about 60 percent of profit outside Africa, including the U.S. and the U.K. “Sometimes in Africa you have issues of devaluation,” he said. “We want to really preserve some of the family’s wealth.”

Dangote Cement reported a 6 percent increase in profit for the 6 months through June to 119.5 billion naira (US$331 million), even as revenue fell 3 percent to 467.7 billion naira (US$1.3 billion).