Dangote Cement experiences steady growth across its new markets

“Our revenues have continued to grow despite the lower volumes seen in Nigeria, especially because of the recent heavy rains. Our margins have improved significantly, helped by improved efficiency and a much better fuel mix in Nigeria,” Onne van der Weijde Dangote Cement’s chief executive officer said in a statement.

This statement is a reflection of the half year result in the just released financials of Sub Saharan Africa’s largest cement manufacturer. Dangote Cement has reported an increase of 12.6% to 4.7 million metric tons increase in sales volume across Africa. Reports show that, the number one cement company in Nigeria is beginning to gain grounds across Africa.

Revenues from operations in Nigeria increased by 34.5 per cent to ₦291.4 billion while Pan-Africa revenue increased by 63.7 percent to ₦124.4 billion from ₦76.0 billion because of increased volumes and foreign exchange gains when converting the sales from country local currency into Naira.

Another key factor used as a boost to increase revenue for the internationally diversified company, was the decision to switch from gas to coal. Starting from its headquarters located in Kogi state, Nigeria; a decision taken because of gas shortages due to militant attacks on gas pipelines in the Niger Delta region of the country. In a report in a local paper, the business tycoon Aliko Dangote said “All our cement plants have been converted to coal,” and plans to use 12,000 metric tonnes of coal each day. He also said “We are using much more gas and increasing our use of coal mined in Nigeria, thus reducing our need for foreign currency.

This coal is used to fire the kilns which produce clinker, an ingredient of cement. The use of kiln to is to address fuel shortages and reduce production cost.

Analysis of the half year result revealed that sales volumes of African operations increased by 12.6 percent to 4.7 million metric tons with Sierra Leone making a 53 kt maiden contribution.An increase for sure but a drop compared to 2016. The High growth cement company witnessed a drop in sales volume from 12970 tonnes in 2016 to 11509 tonnes in 2017.The Company reports that it estimated that Nigeria’s total market for cement was 10.2 million tonnes (Mt), 23.2 per cent lower than the estimated 13.3Mt sold in Nigeria in the first half of 2016. Of total market sales in the first half of 2017, just 0.1Mt was imported.