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Rising profile of Dangote’s Pan-African cement production

By Femi Adekoya
01 April 2015   |   4:38 am
Having overcome its initial challenges in penetrating regional markets in the West African region, Dangote Cement Plc may soon be on the path to dominate African markets as the largest manufacturer of cement in the continent.
Dangote's new cement

Dangote’s new cement

Having overcome its initial challenges in penetrating regional markets in the West African region, Dangote Cement Plc may soon be on the path to dominate African markets as the largest manufacturer of cement in the continent. With its plant in Senegal becoming operational aside other plants, Dangote’s dream of achieving its 50 million metric tonnes by 2016 is fast becoming achievable. FEMI ADEKOYA writes on the firm’s expansion exercise

With a sustained growth profile in Nigeria, the need to extend its presence to sub-regional markets in Africa has become a driving force for Dangote Cement Plc after it commenced operations in its new plant in Pout, Senegal.

Unveiling its 1.5 MTPA Green Field cement plant in Senegal last week, the $300 million-investment by Dangote has been described as one of the biggest foreign direct investments by an African company in Senegal indicating the firm’s strong belief in the future growth of the African economy.

According to Dangote Cement, Africa’s quest for self-sufficiency in quality cement is on course as indicated in its stakes in cement manufacturing plants in Zambia through Tanzania, Nigeria, South Africa, Congo (Brazzaville), Ethiopia, Sierra Leone, Ivory Coast, Liberia and Senegal to Ghana.

With these cement factories and others now either completed or at a high point of development, the Dangote Cement company is said to have thoroughly hedged itself against the relative stagnation which is now slowly finding a foothold in Nigeria’s economic space.

Indeed, some of these countries are expected to serve as hubs for the firm’s export market into other regions.

It could be recalled that until the implementation of the backward integration policy on cement in Nigeria, there has been a heavy dependence on importation of the commodity in the country in meeting the widening demand-supply gap.

However, with consistent investment by many players in the industry, Nigeria has witnessed huge growth in the supply of the commodity to the teeming population in the country, while attention is gradually shifting to the export markets where there is a potential for improved growth and earnings.

With the new plant in Senegal, the Dangote Cement hopes to improve the country’s cement production capacity with an additional 1.5million tonnes, while serving an export market demand of two million tonnes along the Mali axis.

Besides, despite commencing operations only recently, the company is optimistic of penetrating the market with at least 1.2 million metric tonnes of cement before end of 2015.

Speaking during a tour of the facility in Dakar, Senegal, the Country Head, Dangote Cement, Senegal, Luk Haelterman explained that the company’s plant is near completion but has commenced production to fill the demand gap in the country, especially with its 42.5 grade of cement.

According to Luk, the market, despite being a saturated one, has potential for growth both for local consumption and export, with the introduction of the new cement grade in the region.

“The last few years have seen the company overcoming a lot challenges in the country, especially those related to the smear campaign on environmental impact of the factory in the country. It’s a saturated market with Dangote being the third entrant in the market after two other cement manufacturers. What has kept us going is the competitive edge that our 42.5 grade of cement has given us in offering consumers fine quality of cement.

“Our corporate social responsibility activities have improved and we believe that the plant would exemplary to community matters”, he added.

The company’s Chief of operations in the country, Athanasios Bampos, explained that the plant is strategically located to exploit raw materials and serve the export market.

He added that the company generates 15mega watts of power from the plant and has been able to effectively address environmental concerns with new machines and processes.

In his presentation, the Director of Sales and Marketing, Serigne M. Dieng said that Senegal with 14 million people and a growing GDP of +4 percent as of 2013 has cement market of 3MT pa and consumption rate of 230kg.

He expressed satisfaction that Dangote cement has been accepted immediately it got to the market because of the aggressive awareness strategy embarked upon by the company to introduce the 42.5 grade which was not known to the majority of the cement customers except some few corporate customers.

Nigeria’s Ambassador to Senegal and Mauritania, Mrs Katyen Jackden, commended Dangote Cement on the investment, saying that the move would further enhance regional integration in the sub-region.

“Africans should pilot the growth of business in the region and African development. Dangote should be commended for taking that move in driving cohesion in the region through his investment.

“I wish the Dangote group a successful year and commend the Senegalese people for their support to the group”, she added.

Director Mines and Geology, Ousmane Cisse while commending Dangote Cement Industry said the $300million factory remains the biggest investment in his country in the last 15 years.

He said it had changed the economy of his country especially with the quality and content of the economy.
According to him the issue of environmental sustainability, good business practice and compliance with regulatory issues are important adding that the company had met all requirements.

He added that his government had responded by offering tax holiday and other incentives to the company.

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