Dangote Group to invest $3.9n in new cement plants
Dangote Group has unveiled its plans to invest about $3.9billion (N585 billion) in the construction of additional cement lines both within and outside the country within the next few months, as part of its strategy to further strengthen its market dominance and to crash the price of the product. Dangote Cement currently accounts for more than 50 percent of the Nigerian market share.
Mr. Devakumar Edwin, Group Executive Director, Business Development, Dangote Group, who disclosed this in Lagos on Monday at a press conference after the contract signing ceremony between the Group and Sinoma International Engineering Company Limited, a Chinese firm, which is a major global player in engineering, procurement and construction (EPC) projects, said construction activities are expected to take off within the next three months.
According to him, some of the new cement lines, which will have a capacity of 1.5 million metric tonnes per annum, will be built in the following African countries namely: Ethiopia, Tanzania, Republic of Congo and Gabon. He added that the Group plans to construct a 3.0 million metric tonnes per annum plant in South Africa and one grinding plant in Cameroon with a capacity of 1.5million metric tonnes per annum. Apart from the Cameroonian project, which will take up to 17 months to complete, he stated that all the others would be delivered within 27 months from the date of commencement.
In addition, Edwin said the Group plans to construct a new cement line at its Obajana Cement Plant with a capacity of 3.0 million metric tonnes per annum as well as two additional cement lines at Ibese in Ogun State with total capacity of 6 million metric tonnes per annum. He expressed the hope that Dangote Cement concerns in Nigeria would be in a position to produce 20 million metric tonnes per annum by December this year. All of these, he noted would help ensure that the price of cement in the country drops drastically.
Explaining the choice of the Chinese company for the project, he pointed out that Sinoma, which is one of the biggest construction companies in the world understands the peculiarities of doing business in Africa and offers cheaper cost of construction when compared to its European counterparts. He added that the Group envisages a consolidated cement production capacity of about 50 million metric tonnes per annum within the next five years, based on its ongoing projects, which are at various stages of completion.
The brief contract signing ceremony was presided over by Aliko Dangote, President/Chief Executive, Dangote Group and Mr. Wu Shoufu, Director & President, Sinoma International Engineering Company Limited as well as top Directors of both companies.
Dangote Cement, which is currently the largest quoted company in West Africa, embarked on a pan-African investment drive as part of its vision of making the continent self-sufficient in cement production. This informed the signing of a $400 million Investment Promotion and Protection Agreement (IPPA) with the Government of Zambia for the setting up of a 1.5 million metric tonnes per annum cement plant in that country, last December. The project is expected to be completed in 2013. The Group’s 1.5 million metric tonnes per annum cement plant in Senegal is also expected to be commissioned in November this year.
Publication date is 4/13/2011
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