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Dangote Cement Eyes Asia Market

A leading manufacturer of cement in Africa, Dangote, is hoping to move into the Asian market in the next decade.

The company, which currently operates in over eight countries in Africa, plans to launch in South East Asia and Latin America once it is able to consolidate its operations in Africa.

The immediate targets in those regions are Nepal, Indonesia, Vietnam and Colombia, according to the Director of the company’s Ibese factory in Nigeria, Armando Martinez Gallegos.

“Dangote has to first consolidate all its operations in Africa to continue the growth it has been establishing on the continent”, he said. Mr. Gallegos, however, ruled out the possibility of exporting to Europe or the United States of America, saying, “there are only two places in the world in which the construction and cement industry is growing; South East Asia and Africa”.

Dangote Cement has already announced plans of building a 3.0MTa facility in Nepal, South Asia from which it aspires to export to India to feed the demand of neighboring countries which lack limestone (the raw material for cement production).

According to the International Monetary Fund (IMF), the two South-Eastern countries which Dangote is likely to move into are on track “for strong GDP growth”. Although this presents an obvious opportunity for any cement manufacturer, it is interesting to note that the two countries collectively have a capacity of 154.5MTa of cement annually – Indonesia- 63.1 MTa & Vietnam- 91.4MTa. Vietnam for instance has expressed worry about the production of cement to exceed demand. This means, manufacturers in these countries are equally looking for export markets.

Dangote Cement in Africa
Dangote is currently present in Zambia, Tanzania, South Africa, Sierra Leone, Senegal, Ethiopia, Ghana, Cote d’Ivoire, Congo, Senegal, Ethiopia, Cameroun and Nigeria. These comprise existing and planned operations although some level of production is ongoing in these countries. Between 2017 and 2019, full-fledged operations should commence in Liberia, Kenya, Mali, Niger, Zimbabwe and Nepal.

Per the company’s 2015 annual report, the total volume of cement sold was 18.9 million tons, representing a 35% increase over the previous year. The United Nations estimated that Africa’s population will increase from the current 1 billion to 2.4 billion by 2050. This means, governments would be investing more in infrastructure to support the growth of their economies. With the World Bank projecting that the continent would need to invest a total of $75 billion annually on new infrastructure in power, roads, transport, water and maintenance, and average cement consumption in Sub Saharan Africa at approximately 100MT, Dangote Cement sees this as a huge opportunity to cement its lead in the industry. With a capacity to produce 44 million tons per annum in the operational countries including Ghana, the company employs 14,289 people, most of whom are natives of the communities within which the installations are situated.

Ghana Operations
Dangote Cement has been operating in Ghana since 2011 with an import and bagging terminal located in Tema – the Harbour City. In 2015, the company sold 0.6 MT of cement in Ghana, most of which was imported bulk cement. It hopes to increase its share of Ghana’s 6MT market through the construction of a grinding plant at Takoradi worth over USD 100 million, with a capacity of 1.5 MT. When completed, the factory is expected to provide employment to many Ghanaians. In spite of the impact of the Cedi depreciation on the performance of its Tema plants in 2014 and 2015, the company still considers Ghana a major opportunity because of its steady cement demand, the lack of limestone reserves and its proximity to Nigeria.

Source:  radioxyzonline.com

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