The rise and rise of Dangote In Africa cement production

Dangote Cement Plc invested over $5bn to build
44 million tonnes per annum cement factories in
eight African countries in 2015, the firm said in
its 2015 annual report.
These countries are: Nigeria, Cameroon,
Ethiopia, Senegal, South Africa, Tanzania,
Zambia and Ghana.
The Chairman, Dangote Cement, Aliko Dangote,
was quoted in the report as saying that the
business model of the company was based on rapid
expansion at a time when the world’s major
cement companies were occupied with debt
reduction, merger or integration.
He said within some months of opening factories
in Senegal, Ethiopia and South Africa, the
company had achieved rapid gains in market share
despite the presence of strong incumbents.
Dangote said, “To put this rapid success into
context, we have invested more than $5bn to
build this capacity, but at the end of 2015, we
had just $1bn of net debt.”
Meanwhile, as returns from African projects
lifted the earnings and profits of the company,
its shareholders have endorsed the pan African
expansion of the company, urging the
management to make a foray into other countries
in a bid to make the company the foremost
cement manufacturer in the world.
The endorsement came just as Dangote assured
the shareholders that the company would continue
to deploy strategies that would increase
profitability in spite of the prevailing harsh
operating climate.
He explained that with the measures put in place,
the foreign exchange volatility would not affect
the operations of the company significantly more
so when its other African plants are operating
maximally and yielding positive results to cushion
the effect of the scarce foreign exchange at
home.
He added, “We have good strategy in place, the
volatility of the foreign exchange will not affect
our operations. I am not an advocate of
devaluation of our currency, even if that had
happened, it would not have affected your
company.
“Diversification is key to our strategy and that
is why we have intensified our expansion. The
way we have gone about our expansion, it would
appear we have over invested in capacity
expansion in Nigeria given that at 29 million mtpa
and we have another 12 million mtpa capacity
plants under construction. But the truth of the
matter is that investments can never be enough
in Nigeria. We need it.”