Nigeria’s most capitalised quoted company, Dangote Cement Plc, has invested $3 billion in its Pan-African operations as the cement group continues to invest in expansion of its plants and terminals across the continent.
Group Chief Executive Officer, Dangote Cement Plc, Engr. Joseph Makoju, said the cement group has invested $3 billion to build manufacturing plants and import and grinding terminals across Africa.
The group’s operations include Cameroon, 1.5 Mta clinker grinding; Congo, 1.5 Mta; Ghana 1.5 Mta import; Ethiopia, 2.5 Mta; Senegal, 1.5 Mta; Sierra Leone, 0.7 Mta import; South Africa, 2.8 Mta; Tanzania, 3.0 Mta and Zambia, which has a 1.5 Mta plant.
Makoju said total Nigeria sales volumes went up by 13.9 per cent to 7.8Mt in the second quarter ended June 30, 2018, although Pan-African volumes reduced by 3.9 per cent, mainly due to shutdown in Tanzania.
According to him, the group, which employed 27,952 workers in Nigeria in 2017 had its revenue increased by 16.9 per cent from N412.68 billion in 2017 to N482.44 billion in 2018 while its earning per share also increased by three per cent to N6.60 kobo per share by the end of second quarter.
“Our first-half performance was very strong and driven by an excellent recovery in Nigeria, where our sales volumes increased by nearly 14 per cent and revenues rose by more than 18 per cent. Pan-African operations saw a slight fall in volumes but both revenues and EBITDA increased because of better pricing and currency conversion effects,” Makoju said.
He noted that the group achieved the largest-ever issuance of Commercial Paper by a Nigerian company when it issued N50 billion Series 1 & 2 Notes at the end of the quarter, noting that the discount rate reflected the strength of the 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.”
Key extracts of the six-month report for the period ended June 30, 2018 showed that profit before tax rose from N155.58 billion in first half 2017 to N185.54 billion in first half 2018. Profit after tax increased from N109.71 billion to N113.16 billion while earnings per share rose from N6.41 to N6.60 per share.
At the annual general meeting of the cement group last month, Chairman, Dangote Cement Plc, Alhaji Aliko Dangote had attributed the 31 per cent increase in the group’s turnover of N805.6 billion in 2017 to its pan African operations growth which also recorded a significant increase in revenue from N195 billion in 2016 to N258.4 billion in 2017.
He had noted that Pan African operations increased volumes by 8.4 per cent, with Ethiopia, Senegal, Cameroon and South Africa all performing strongly and close to their operating capacity.
Makoju had noted that growth was driven by the decision to increase use of local coal in Nigeria, helped to improve fuel security, maintain production uptime and reduce 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,” Makoju said.
On the future growth plans, Makoju said the group will focus on building new grinding plants along the coast of West Africa, and ensure it has clinker export facilities in Nigeria.
“We are looking at the possibility of two new lines in Nigeria, perhaps by the end of 2020 and it is likely these will be in Edo state and Obajana, with a combined capacity of 6.0 Mta,” Makoju said.
