The world’s cement market is vast. With an estimate of annual revenue of more than $250 billion and a 5.3 per cent annual growth projection, cement production is arguably a major driver of economic growth in many ways.
The product is a vital raw material in construction, the major hub of activities for growing and emerging economies. Its production is intensive and largely localised, providing the resident economy with huge opportunities for job creation, self-sustenance and foreign exchange.
But, despite Africa’s vast limestone deposits, no African nation ranks among the top cement producing countries and no African company features among the top producers.
Dangote Cement is making inroads into the top league, in operations and capacity.
With a market capitalisation of about N2.8 trillion; more than a quarter of the total market capitalisation of the Nigerian equities market, nine-month revenue of N365.5 billion, operations in 18 African countries, two other ready-for-commissioning plants in two African countries and pipeline contracts for several plants in 11 countries, Dangote Cement is already established as official largest cement company and one of the largest companies in the continent.
The third quarter corporate earnings report and the commissioning of its $600 million cement plant in the United Republic of Tanzania have shown Dangote as Africa’s driver in cement production.
According to extracts of the nine-month earnings report as at September 30, Dangote Cement exported 3.7 million metric tonnes to neighbouring countries.
The export underscores both the fact that Nigeria is now self-sufficient in cement production and the fact that the country can save its hard-earned foreign exchange (forex) earnings through local exporters.
As the company’s exports hold rays of hopes for diversification of the economy, its sustained growth has been helping to stabilise the stock market.
With declining foreign portfolio investments, the stock market has wriggled under a recession orchestrated by global variables, including declines in crude oil price and recovery in advanced markets.
The resurgence by highly capitalised stocks, including Dangote, has helped the market to moderate losses in recent period.
Dangote Cement’s Industrial Goods Index has shown the strongest resilience on the main board at the Nigerian Stock Exchange (NSE) with average year to date return of -2.49 per cent, the lowest within a table of return as high as -17.97 per cent, at the start of the market this week.
