Displaying items by tag: Dangote Cement
Sephaku Cement set to produce clinker at Aganang plant
20 August 2014South Africa: Sephaku Cement, an associate of Sephaku Holdings, has completed the commissioning of the Aganang clinker plant in Lichtenburg, North West Province and is ready to commence production. Lelau Mohuba, the chief executive of Sephaku Holdings, said that the first consignment of clinker would be delivered to Sephaku Holdings' Delmas grinding plant by the end of August 2014. The Aganang plant also has a cement production capacity of 1.1Mt/yr.
Commercial production at the Delmas grinding plant commenced in January 2014 following a successful commissioning phase. Once it is operating at full capacity, it will be capable of producing 1.4Mt/yr of cement. About US$312m has been invested in establishing these new cement plants, which will have a total annual capacity of 2.2Mt/yr once they are fully operational.
Sephaku Holdings has a 36% stake in Sephaku Cement, with the remaining 64% owned by Dangote Cement. Mohuba said that the production of its own clinker was an important step for Sephaku Cement in enabling it to become a fully-integrated producer of cement. Mohuba said that Sephaku Cement had to date been purchasing clinker to grind at Delmas, where the company had achieved more than 60% capacity utilisation. He said this had enabled Sephaku Cement to enter the market while strengthening its sales function in preparation for increasing volumes.
Dangote invests US$250m in coal power plant
18 August 2014Nigeria: Dangote Group has invested US$250m in a coal-based power plant in its effort to provide an alternative source of power for is plants across the country to reduce the cost and difficulty accessing electricity.
Dangote Cement's Group CEO, Devakumar Edwin, said that the initiative will help the group in running its businesses in all parts of the country. He noted that the group has installed a 54MW coal power plant in Gboko, Benue State and is currently working towards installations at Ibeshe in Ogun state and Obajana in Kogi State. Edwin, who said that the group was currently importing coal from South Africa, revealed that it has started exploring coal opportunities in Nigeria, especially in Enugu State. It has also established a separate division for coal exploration.
Edwin noted that inadequate power supply due to Nigeria's low supply of gas has affected Dangote's cement production, while the cost aspect has also impacted on the economy and increased cost for consumers.
"In this country, the major issue is power," said Edwin. "Any economy will climb to double digits, once there is power at the right price. With affordable power people will produce products locally, will gravitate to the private sector, leading to the creation of a middle class and more employment in the country."
Nigeria set to end cement imports in 2017
18 August 2014Nigeria: With a national production capacity at over 28Mt/yr, which far outstrips national demand of 20Mt/yr, Nigeria looks set to effectively end cement imports by 2017, according to UniCem's managing director, Olivier Lenoir. This is coming on the back of on-going strong national production capacity expansion by virtually all of the major cement producers operating in the country. By 2016, Dangote Cement will have increased its production to 50Mt/yr, Lafarge 15Mt/yr and UniCem to 5Mt/yr.
Sephaku Cement posts US$1.37m loss in its first year
08 July 2014South Africa: Costs relating to Sephaku Holdings' new cement business Sephaku Cement dragged the group to a loss in the year that ended in March 2014, though management has said that indications are positive for its cement venture.
Sephaku Holdings has a 36% share of Sephaku Cement, which in January 2014 completed the construction of two plants in North West Province and Mpumalanga. Nigeria's Dangote Cement is the majority shareholder in Sephaku Cement. Sephaku Holdings reported a post-tax loss of US$260,300 in the period under review, largely due to a loss from Sephaku Cement of US$1.37m.
Sephaku Holdings' latest results include little revenue from the cement business, as one of the plants began producing only in January 2014 and the other is due to begin production in July 2014. The South African cement market is currently oversupplied and is likely to remain that way for some time, but Sephaku and another newcomer, Mamba Cement, are banking on healthy demand growth and cost-efficiency advantages from their modern plants. Mamba has a plant under construction near Northam in Limpopo.
Ghana likely to face cement shortage
07 July 2014Ghana: Cement prices may soar in the coming weeks as manufacturers are faced with challenges hindering supply flow. Dangote Cement has suspended its imports to Ghana because of the fast depreciating Ghana Cedi, while Diamond Cement is reported to be facing challenges in importing clinker to manufacture cement in Ghana.
Cameroon: Dangote Cement has announced that its US$150m cement plant in Douala, Cameroon will commence production in August 2014. The company management said that the 1.5Mt/yr capacity plant was almost ready and would commence initial production at 1Mt/yr before production is stepped up to maximum capacity.
Dangote's general manager, Abdulahi Baba, said that the cement plant would revolutionalise the cement industry in Cameroon and help to stimulate the economy. According to Baba, the plant is ready for test running and what remains to be completed is the construction of access roads to the plant.
The Cameroon plant is also set to import clinker from other regions. Baba disclosed plans to build a jetty by the plant, which would make raw material imports and product distribution more convenient. The jetty will be situated close to the Douala Sea Port.
Dangote Cement launches attack on ‘re-baggers’
16 June 2014Nigeria: In a bid to tackle 're-bagging,' which is one of the biggest threats in the cement industry in Nigeria, Dangote Cement has launched an all-out attack on perpetrators.
In the cement industry 're-bagging' refers to the emptying of the original cement bag and refilling with a different adulterated product or commodity. Another common method is to buy cement from shops, grind it, mix it with sand and then put the adulterated commodity into a bag belonging to a reputable cement manufacturer.
Often cement makers end up bearing the brunt of customer dissatisfaction, as they believe the product is from the original source. In the case of damage associated with the product, consumers often attribute it to the firm whose bag has been used for the product.
"There are different forms of what these people are doing," said Devakumar V G Edwin, Dangote's managing director and CEO. "We have an extensive team that is spearheaded by a former police commissioner exclusively on this." According to Edwin, his team is working hard to halt bag thefts by cement plant workers, which facilitate the re-bagging business.
"We have even heard people say that they sell Dangote Cement for US$5.52 – 6.13/bag," said Edwin. "What happens is that our customers often call us and inform us of the situation. Sometimes, they tell us that we are cheating them because of the price someone tells them elsewhere. Once we get the information, we launch into action."
The creation of Lafarge Africa, the clearance of the Cemex West acquisition by Holcim in Germany and the sale of Lafarge's assets in Ecuador all hint at the scale of business that LafargeHolcim will command when it comes into existence. Despite the media saturation of coverage on the merger the implications in developing markets are still worthwhile exploring, especially in Latin American and Africa.
In sub-Saharan Africa, Lafarge is merging its cement companies in Nigeria and South Africa to create Lafarge Africa. Analysts Exotix have described the move as, 'the birth of a leading player on a continental scale'. Indeed, if Lafarge wanted to grow Lafarge Africa to encompass its many other African cement producing subsidiaries it could hold at least 17 integrated cement plants (including plants in north Africa) with a cement production capacity of at least 40Mt/yr in 10 countries and infrastructure in others. That puts it head-to-head with Dangote's plans to meet 40Mt/yr by the end of 2014 through its many expansion projects. Following these two market leaders would come South African-based cement producer PPC with its expansion plans around the continent.
Meanwhile across the Atlantic in Latin America the Lafarge-Holcim merger threatens Cemex. Unlike in Africa where Lafarge has a ubiquitous but disparate presence, Lafarge and Holcim's cement assets are more evenly scattered around the Caribbean, Central and South America. In terms of cement production capacity Cemex and Lafarge-Holcim will both have around 30Mt/yr, with Cemex just in front. The next biggest cement producers in Latin America will be Votorantim (present mainly in Brazil) with just over 20Mt/yr and Cementos Argos (Columbia) with about the same. This includes some new acquisitions in the United States for the growing Columbian producer. In Ecuador Lafarge and Holcim held over 50% of the market share, hence the sale by Lafarge of its assets to Union Andina de Cementos for US$553m.
Depending on how well the merger integrates the two companies, corals the various subsidiaries and implements strategic thinking the merger could just create business as usual with little disruption to the existing order. Yet in both continents the merger has the opportunity to shake up and reinvigorate the cement markets as existing players suddenly discover serious new competition and react accordingly.
Africa has a population of 1.1bn and it had a Gross Domestic Product (GDP) of US$2320/capita in 2013. South America had a population of 359m in 2010 and a GDP of US$8929/capita. This compares to US$27,250/capita in Europe and US$54,152/capita in the US. The economic development potential for each continent is humongous. Post-merger, LafargeHolcim will be first or second in line for some of this potential in Latin America and Africa.
SON justifies 32.5 grade cement ban decision
20 May 2014Nigeria: The Standard Organisation of Nigeria (SON) has explained why the agency has restricted the use of 32.5 grade cement and why it has urged manufacturers to commence the production of 42.5 grade cement.
The director general of SON, Joseph Ikem Odumodu, said that the restriction placed on the use of low grade cement was important to mitigate the problem of building collapses in the country. It is estimated that from 1974 to 2010, collapsed buildings have claimed about 297 lives.
Odumodu said that Nigeria cannot afford to be a 'pariah state' on the issue of cement quality, adding that world's progressive countries have stopped using 32.5 grade cement. He said that SON has restricted the use of 32.5 grade cement and will enforce compliance.
Dangote Cement is the only company that currently produces 42.5 grade cement in Nigeria. Odumodu said that companies that have decided to continue 32.5 grade cement production have done so for profiteering.
SON had issued a directive that 52.5 grade cement must be used for bridges, 42.5 grade cement can be used for casting of columns, beams, slabs and for moulding blocks, while 32.5 grade cement can only be used for plastering.
Africa: Chief Executive Officer at Dangote Cement, Devakumar Edwin said that the company plans to start operations in Sierra Leone, Cameroon and Zambia in 2014. Dangote, which has a production capacity of 20.3Mt/yr in Nigeria, also intends to add 9Mt/yr to production in Nigeria by the end of 2014.
Edwin said that Dangote is currently reviewing its operations in Kenya in light of the discovery of limestone deposits in the country. Dangote plans to increase the capacity of its proposed plant in Kenya from 1.5Mt/yr to 3.0Mt/yr.
"In Ethiopia, work is well underway to build 2.5Mt/yr plant at Mugher, with commissioning expected late in 2014. In Tanzania, we have begun work on a 3Mt/yr plant at Mtwara that will be operational in 2015. In Zambia, work is underway on a 1.5Mt/yr plant at Ndola with cement production expected in the second half of 2014," said Edwin.
The bid to expand is part of the company's long-term expansion strategy across the continent. Dangote has three plants in Nigeria and plans to expand into 13 other African nations, bringing its total capacity to more than 60Mt/yr by 2016. Edwin added that the company is stalling its business plan in South Sudan 'because of military conflict in that nation.'
Dangote recorded a turnover of US$2.3bn in the 2013 financial year, up by 29.4% from US$1.8bn in 2012. Profit before tax was US$1.18bn, compared with US$836m in 2012, while profit after tax rose to US$1.24bn, a 38.73% increase when compared to US$899m recorded in the same period of 2012.