Dangote Cement Plc has restated its commitment to Africa’s economic independence, through its vision for West and Central Africa to be cement and clinker self-sufficient, with Nigeria the main export hub.
The company said part of its 2020 outlook was to begin exporting clinker from Nigeria to neighbouring countries from Apapa and Onne ports, which was fulfilled and Nigeria has gone from being one of the largest importers of cement, to becoming self-sufficient and now an exporter of cement and clinker.
According to the Global Cement Report, cement demand is expected to grow strongly in Africa as urbanisation increases, demanding more infrastructure, housing and commercial buildings.
Nigeria can serve a potential market of 15 countries, 350 million people with high quality and competitively priced clinker. The Global Cement Report estimates that West Africa imported over 18 million tonnes of cement and clinker in 2020.
African countries opened their markets on January 1, 2021 under the continental free trade agreement and duty-free trading of goods and services. African Continental Free Trade Area (AfCFTA) is expected to generate a number of benefits to producers, consumers and countries alike. African producers will benefit from access to cheaper inputs and intermediate goods as well as larger market for their products. It is expected to boost intra-African trade, promote industrialisation, create jobs and improve competitiveness of African industries on the global stage.
Dangote Cement welcomed the strong dynamic driven by the AfCFTA which supports its vision for West and Central Africa to be cement and clinker self-sufficient.
In 2020, following the commissioning of its Apapa export terminal in June that year, Dangote Cement’s maiden shipment of 27.8Kt of clinker from Nigeria landed in Senegal. It subsequently exported seven clinker vessels to Cameroon in 2020. Accordingly, in 2020 Dangote Cement exported a total of eight clinker vessels to West and Central Africa. The company exported 149Kt of cement by road and shipped 197Kt of clinker in 2020. The company also commissioned the Onne export terminal at the end of 2020.
Speaking at the company’s 2020 annual general meeting held in Lagos, recently, the chairman, Aliko Dangote, said: “Despite the business challenges, 2020 was a record year for us across the board. Dangote Cement hit the N1 trillion mark in terms of revenue. Group revenues were up 16.0 per cent compared to 2019.
“We recorded Group cement sales of 25.7 million tonnes (Mt) and revenues of N1. 034 trillion. Most notably was our record high EBITDA of N478.1 billion, up 20.9 per cent compared to 2019 and our strong profit after tax of N276.1 billion up 37.7 per cent.”
Dangote added that, “as a result of this strong performance, the board recommended a dividend of N16.00 per ordinary 50 kobo share. The board maintains the 2019 dividend of N16 per share, reinforcing its commitment to maximising shareholder value.”
The chairman said: “We have shown our ability to pay a generous dividend to our valued shareholders even in a challenging year. These challenges have not deflected us from our focus on delivering long-term value for shareholders.”
On outlook, Dangote stressed that, “the board is considering all strategic and financial options for the company. We strive to improve in all areas of our organisation and we will continue to improve our efforts in sustainability by applying ‘The Dangote Way’ to the seven Sustainability Pillars of our business culture and operations.
“I believe that we will look back on 2020 as a turning point for Dangote Cement. You will recall that only a few years ago, Nigeria was one of the world’s largest importers of cement. Dangote Cement has transformed into an exporter of this basic but vital commodity.
“In 2021, we are focused on increasing capacity in the Nigerian market and building grinding plants across West and Central Africa to be fed clinker from Nigeria. We welcome the Africa Free Trade Agreement which supports our export strategy and long-term growth in Africa.
“Dangote Cement is well positioned to capture demand driven by the economic recovery in 2021, as the region recovers from the impact of the pandemic and all our countries of operation return to growth.”
Also, the group managing director/CEO of Dangote Cement, Michel Puchercos reemphasised that despite the impact of the COVID-19 pandemic, 2020 was a record year for Dangote Cement across board.
“Several firsts made 2020 a productive year such as our maiden clinker shipment, maiden bond issuance and successful buyback programme. We increased our capacity by 3Mt in Nigeria, commissioned our two export terminals and commissioned our gas power plant in Tanzania. All this was achieved whilst we focused on protecting our people, customers, and communities from the impact of the pandemic,” he said.
According to Puchercos, our maiden bond issuance in April was the largest corporate bond issuance in Nigeria’s debt capital market at the time and was oversubscribed.
“The success of this transaction in the challenging environment illustrated our resilient financial position, investors’ confidence in Dangote Cement’s strategy, our strong cash generation and solid credit profile. We also completed a successful share buyback programme.”
He added that the firm has commissioned its gas-fired power plant in Tanzania following the lifting of air travel restrictions. It also added 3Mt of capacity to its Obajana plant, which will enable the Company to continue to serve the strong demand in Nigeria and its export markets.
He noted further that “the commissioning of our two export terminals was the main highlight for me as we reach our next phase of growth and began fulfilling our export strategy. We made our maiden shipment of clinker from the Apapa terminal in June and exported just under 200Kt to West and Central Africa throughout the remainder of the year.”
Puchercos said: “the outlook for the company is very positive as we are focused on meeting the demand locally and across Africa. We look forward to the African Continental Free Trade Agreement supporting our export strategy to West and Central Africa.”
Dangote Cement has a production capacity of 48.6 million tonnes per year across 10 countries in Sub-Saharan Africa. It has integrated factories in seven countries, a clinker grinding plant in Cameroon, and import and distribution facilities for bulk cement in Ghana and Sierra Leone. Together, these operations make Dangote Cement the largest cement producer in Sub-Saharan Africa.