TheCable

The construction of the two new cement plants in Nigeria is set to push Dangote Cement into the list of the top 20 global cement producing companies, and the only cement company from Africa.

The 9million tonnes capacity cement plants are in Okpella, Edo state, and Itori, a community in Ogun state, southwest Nigeria.

The new plants are expected to bring the company’s annual production from 29.25 million metric tonnes to 38.25 million metric tonnes – a few million tonnes above some companies in the world’s top 20.

According to Global Cement, Dangote ranked 27 in December 2013, with a production capacity of 20 million metric tonnes per year.

Moving to 38 metric tonnes per year, Dangote is set to displace China’s Jidong Development and Shansui, at the 15 and 16th position on the global ranking.

Dangote Cement stated that the Okpella plant would add 3million tonnes, while Itori would increase production by 6million per annum.

Devakumar Edwin, group managing director and CEO of Dangote Cement, who made the announcement in Lagos, said both plants are expected to come on stream within the next three years.

He said the move by the company was to help expand the spread of the company’s manufacturing outfits, thereby reducing the transportation cost component of their operations.

He added that the new investments would further lower cost of production, bring about future reduction of the price of cement and also generate employment opportunities for the youths of host communities.

Onne Weijde, the group managing director, cement, Dangote Industries Limited, said the demand for the commodity remained high considering the level of population growth in Nigeria.

“There has always been a surplus in demand because cement was not readily available, but ours is available and the prices are affordable,” he said.

“Consumer prices have fallen by 35 per cent in naira terms, but if you take it in dollar terms and relate it with today’s parallel market rates, you will realise the price of the product has gone down in Nigeria, and in some cases below the prevailing average global price.”

“This itself is a huge driver for increasing the per capita consumption.”

He said with the capacity of the plants in Nigeria, the company could supply the entire western and central Africa region, adding that Dangote cement was exporting cement to Niger, Ghana, Togo with plans to move up to the Ivory Coast.

“Nigeria has always been an import-dependent country in terms of cement in the past and if we do not add up capacities, we will not be able to match up the consumption rate in the country.

“We want to ensure that we are always one step ahead to meet the local demand for the commodity.”

Joseph Makanju, special adviser to the president of Dangote Group, Aliko Dangote, added that the price of  a 50kg bag of cement has reduced from from N2,000 to about N1,300.

“In an environment where all the input costs are going up, the achievement is actually bigger than the figures.”

The plants are expected to create 5,000 direct jobs at its early stage.