Dangote Cement to nearly double production capacity across Africa in next three years

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Dangote Cement, Nigeria’s biggest listed company, said it aims to nearly double its production capacity over the next three years and half of its output by the end of 2019 will come from African plants outside its home market.

The company, majority owned by billionaire Aliko Dangote and Africa’s biggest cement producer, plans new plants in Nigeria which will add between 9 million and 12 million tonnes to its existing capacity and will also expand production into Ivory Coast, Liberia, Mali, Niger, Kenya and Zimbabwe, it said in a presentation on Tuesday.

Plants in Republic of Congo and Sierra Leone will become operational this year, it said.

The company, which currently has an annual production capacity of 43.6 million tonnes, targets output of between 74 million and 77 million tonnes by the end of 2019.

It has invested more than $5 billion to expand outside its home market in the past few years. Dangote has said he targeted 100 million tonnes of capacity by 2020.

In April Dangote secured a $2 billion loan from Industrial Commercial Bank of China Ltd (ICBC) for two cement plants. It has also signed construction deals with China’s Sinoma International Engineering Co..

Dangote reported a 22.3 percent fall in first-quarter pretax profit to 54.5 billion naira ($274 million) on Monday but said its net debt had fallen to 148.7 billion naira in the first quarter from 204.2 billion naira in December.

Sales from outside of Nigeria increased to 24 percent of total revenue during the three months to March 31, from 12 percent a year ago, it said.

It expects its African plants to achieve high capacity utilisation this year, with Tanzania ramping up production steadily.

Dangote hopes infrastructure spending across African economies will drive sales. Nigeria has allocated around $3 billion for transport, housing and power projects, which would be funded through loans from China, it said.

However, Dangote faces intense competition in Africa, notably from arch rival Lafarge Africa and Nigerian conglomerate BUA group, which is also ramping up production across the continent.

 

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