Dangote plans cement grinding plants across West Africa, pays shareholders 90% of 2017 profits as dividends
The grinding plants, analysts say, represents a major push by the cement giant to cement its hold on both cement production and distribution on the continent with an eye for export. But more significantly, it represents a more push by the group in West Africa after making inroad into East Africa and Southern Africa, analysts covering industries told business a.m. for this story.
The building of the grinding plants, the number and locations of which are yet to be determined, is part of the conglomerate’s future growth plan, Joe Makoju, the acting group chief executive, told a gathering of shareholders in Lagos.
But Makoju gave hint that the group would be installing two new production lines in Nigeria by 2020 with Edo State and Obajana in Kogi State as locations for the proposed new lines. The two new lines will have a total capacity of 6 metric tonnes per annum.
“As it stands, I think we will focus on building new grinding plants along the coast of West Africa, and ensure we have clinker export facilities in Nigeria. We are looking at the possibility of two new lines in Nigeria, perhaps by the end of 2020 and its likely these will be in Edo state andDangote Cement
Obajana, with a combined capacity of 6Mta, ” Makoju said.
At the general meeting of shareholders of the group’s cement arm, Dangote Cement plc, on Wednesday, an was given for 90 percent of the cement company’s net profit to be paid as dividend to shareholders.
The approval comes on the back of a revenue increase of 31 percent for the 2017 financial year. The approval translate to N10.50 per share, an increase of 23.5 per cent on the N8.5 per share paid last year.
Aliko Dangote, chairman of Dangote Cement, said the 31 percent increase in revenue of N805.6 billion to growth in its pan African operations, which he said recorded a significant increase in revenue from N195 billion to N258.4 billion in 2017.
“ Dangote Cement Pan African operations increased volumes by 8.4 percent, with Ethiopia, Senegal, Cameroon and South Africa all performing strongly and close to their operating capacity,” he said.
Dangote however, noted that the company. Dangote Cement experienced some challenges in operating in sub-Saharan Africa, but remarked that the company responded in robust fashion and benefited from what he called “the diversity created across its business, local knowledge and attitudes towards doing business in neighbouring countries in Africa.”
Acting group CEO. Dangote Cement , Joe Makoju, also spoke of the business strategy that helped the company achieve revenue success, noting that, “the increase was helped by our decision to increase our use of local coal in Nigeria and that also helped to improve our fuel security, maintain production uptime and it reduced our need for foreign currency.”
Makoju said the cement arm sources coal from its parent Dangote Industries, and from another Nigerian supplier, adding, ” We are very happy with the way this has worked out for us because it has enabled us to phase out the use of expensive low pour fuel oil in our kilns and also to reduce our use of imported coal.”
President of Progressives Shareholders Association of Nigeria, Boniface Okezie, said the. Dangote Cement shareholders were pleased with Aliko Dangote and his team, describing the approval of the new dividend payment to shareholders of the cement company as a step in the right direction.
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