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…As puzzle of high cement price in Nigeria remains unsolved
Rising from its recent Annual General Meeting in Lagos, the management of Dangote Cement Plc, has disclosed that the recent upgrade of the capacity of its Obajana Plant in Kogi State to 16 million metric tonnes; it has joined the league of biggest cement plants in the world.
During the former administration of President Goodluck Jonathan, Federal Government powered cement backward integration with strong assurance to Nigerians that at the moment local production becomes sufficient by matching annual need, price of cement in Nigeria will come down to N1,000 rather the current over N2,000 it is now.
However, more than seven years of achieving backward integration in cement production, local price of the product has remained over and above the reach of Nigerians and the same Federal Government has continued to keep quiet on its assurance to Nigerians during the cement import regime.
Industry analysts say, for the fact cement price has remained out of reach, it would be difficult to claim that the backward integration in cement production has really become any form of good news to Nigeria because as it is, cement price in Nigeria is still higher when compared to prevailing international price upon backward integration had been achieved.
Statistics show that current total national cement output has jumped to over 30mmt as yearly demand remains less than 26mmt, but there is no price drop or differential to argue for or defend the gains of the noisy self sufficiency in cement.
In his address to shareholders at the 10th AGM of Dangote Cement, the chairman, Aliko Dangote said efforts are on to deliver two cement terminals located in Onne, River State, and Lagos State before year end
This encouraged him to further announce that on delivery, the export facility will attract $700 million in foreign exchange.
Dangote added that “We have a lot of on-going projects aimed at increasing capacity, and by next year, we will not only export one million tonnes as we normally do now, we will be servicing both the domestic and other African countries from Nigeria.
“We will have a capacity of about eight million tonnes to export and that will generate a foreign exchange of about $700 million into the country, to assist the federal government and the group in its other activities across Africa.”
“All these, surely will translate to an enhanced value appreciation to the shares of Dangote Cement, and more money in the pockets of the shareholders”, he told the excited shareholders. While describing the 2018 business year as the most successful for the company, as it recorded an increase in cement sales by 7.4 per cent to 23.5 million tonnes, and 11.9 per cent growth in revenues to N901.2 billion, the multi-sector investor averred that “Sales of cement from our Nigerian plants increased by 11.4 per cent to 14.2 million metric tonnes in 2018. Our Pan-African operations contributed 9.4 million metric tonnes, level on 2017, with strong performances in Cameroon, Senegal, and Zambia helping to offset weaknesses in Ethiopia, and gas turbines now operating in Tanzania, we expect these two large plants to improve their performance in 2019, further increasing profitability.”
On the new development plans of the company, Dangote revealed that “Later in 2019, we will open export facilities in Lagos and Port Harcourt that will enable us to export clinker, initially to our grinding plants we are building in West Africa.
“Not only will these generate useful foreign currency for Dangote Cement to support other expansion projects outside of Nigeria, they will also help to increase the output of our Nigerian plants. They will also help to improve job creation, and increase prosperity in Nigeria, something of which all stakeholders can be proud when achieved.”
Earlier in his remarks, the Group Chief Executive Officer, Engr. Joseph Makoju said “A major priority for us is to get these export terminals on stream so we can replace non-African imports in Cameroon, rake in foreign currency for Nigeria, and increase the utilisation of our Nigerian plants.”
During the core business of the day, shareholders at the meeting approved a total of N272.6 billion dividends, translating to N16 per share due to every investor of the company for the 2018 financial year.
Majority of shareholders, who spoke at the meeting, expressed happiness on the feats achieved by the company within the year under review and advised the management not to rest on its oars, as shareholders would be expecting more in the next accounting year.
Business Hilights recalls that Dangote Cement group currently operates in 18 African countries.
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