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Dangote Cement new capacity operational and ramping up

May, 10 2012

(Nigeria) -- Dangote Cement, Nigeria’s largest cement producer says its new capacity is operational and ramping up towards higher production, even as Nationwide gas supply problems affected margins in the short term, Devakumar Edwin, Group Executive Director has revealed.

According to its unaudited results for the three months ended 31 March 2012, the company’s revenue grew by 17.6% to N64bn from N54.5bn in the first quarter of 2011.

According to the company, performance indices recorded an upward trend; earnings before interest and taxes (EBIT) grew by 13.7% to N31.6bn, a 49.3% margin compared to N27.8bn in the first quarter of 2011 while pre-tax profit rose to N30.3bn in contrast to N27.4bn of the first quarter of 2011 representing an 8.9 per cent increase, including an earnings per share rise to N1.97, an increase of 11.3%.

BusinessDay investigations reveal that sales of locally produced cement grew by 38% as new capacity becomes operational. Even though Nationwide gas supply issues are continuing; there are expectations of resolution in the second half of 2012 as well as optimism of investments to transform Nigeria from deficit to export.

‘‘The first quarter of 2012 saw our new capacity at Obajana and Ibese become operational with both plants ramping up towards higher levels of production,’’ said Devakumar Edwin, Group Executive Director at Dangote Cement.

The Group Executive explained that gas problems experienced in the country affected margins in the first quarter, saying that ‘‘we expect some resolution of the problem in the summer that will enable us achieve the much higher margins associated with gas-filled plants’’.

He continued that the significant investments the Group have made in Nigeria have helped the nation become self-sufficient in cement, ‘‘being confident that when local demand is satisfied, we will begin to export cement to neighbouring countries,’’ adding that Dangote Cement is on its way to becoming Africa’s leading cement manufacturer.

Dangote Cement is a fully integrated quarry-to-depot producer with an expected production capacity of 20 metric tonnes per annum in Nigeria by the middle of 2012, with hopes of increasing to 32 metric tonnes per annum by 2015.

The Group has announced plans to invest more than $2.5bn to build manufacturing plants and import terminals across Africa. Current plans are for eight cement plants in Cameroon, Ethiopia, Gabon, Republic of Congo, Senegal, South Africa, Tanzania and Zambia, as well as importing/packing facilities in Cote d’Ivoire, Ghana, Guinea, Liberia and Sierra Leone. The Group listed on the Nigeria Stock Exchange in October 2010.


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