Dangote Cement aims to double size of Africa plants in 3 years

13 July 2017

Nigeria’s Dangote Cement plans to invest about $4 billion in the next two to three years to nearly double its production capacity in Africa, a senior executive told Reuters on Tuesday.

Edwin Devakumar said the company was seeking to expand across the continent to hit annual production of about 80 million tonnes within the next three years.

Dangote, Africa’s biggest cement producer, has an annual production capacity of 45 million tonnes, Devakumar told Reuters in an interview.

In 2015, Dangote signed $4.34 billion worth of contracts with China’s Sinoma Engineering to build cement plants across Africa. At the time Dangote projected to reach 100 million tonnes production capacity by 2020.

“Our focus in the next three years is that we should be going toward 80 million metric tonnes of cement production,” he said, adding that the expansion would be funded through loans from Chinese and Indian banks and cash flows.

Dangote, whose interests includes flour milling, agriculture, real estate and truck assembly, faces intense competition, particularly from main rival Lafarge Africa, which combined its South Africa operation with its publicly traded Nigerian business to accelerate growth on the continent.

The company, majority owned by African richest man, Aliko Dangote, operates in more than 14 African countries and has about a 45 percent market share in sub-Sahara Africa, Edwin said.

Dangote Cement, Nigeria’s biggest listed company, plans to build a 1.5 million metric tonne cement plant in Congo in six weeks time, Devakumar said, adding that the firm planned to sign an agreement for three more plants in some West African countries.

He said the company was adding 3 million tonnes to its single biggest plant located in Nigeria, which has a capacity of 13 million tonnes, within the next two years.

Dangote was facing challenges in Tanzania, where the government wants to compel the company to list on its stock exchange, and in Ethiopia where its plants are being threatened by locals, Devakumar said. 

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