Dangote Cement Plc has disclosed that it is planning massive expansion into sub-Saharan Africa markets. The disclosure was made by the Group Managing Director/Chief Executive Officer, Devakumar Edwin, while presenting the company’s “Facts Behind the Figures” before the capital market community last week in Lagos.
Edwin hinted that more than $5 billion has been committed for expansion between 2012 and 2016, as the current funding plan will be 60 per cent equity and 40 per cent debt.
He explained that the expansion was gaining pace as new Nigerian lines have started producing clinker/cement. “Sephaku Cement is already selling cement from Delmas. Zambia is on track for commencement in 2014 while Cameroon is to begin operations soon. He stated that Senegal plant commissioning has commenced while Ethiopia will commence before the end of the year. Sierra Leone will open in Q4 2014 and we are reviewing scope of Kenya in the light of finding good limestone deposits. He also disclosed that South Sudan is on the hold owing to conflict.”
On its outlook, the Dangote Cement boss said that coal facilities at Ibese 1+2 are expected by September at Obajana 3 even as the company will invest $300 million in additional coal facilities across all plants.
He added that the Group was looking to acquire oil/gas blocks to help secure gas supplies, expecting to increase direct deliveries and Capex of about $1 billion for 2014.
Edwin noted that by the end of 2017, it is expected that Dangote Cement will be in operations in 13 countries in Africa with about 62MTPA capacity. Nigeria’s capacity is expected to be at 38MTPA while the additional capacity would be across other African countries including Zambia, Tanzania, Kenya, Cote d’Ivoire, Liberia, Ghana Takoradi and Congo Brazzaville.
Continuing, he said that by 2017, the group’s export strategies would be fully operational, trading within Africa’s trade zones, operating in robust, growth market, well diversified regional exposure and leading sub-Saharan African producer.
Edwin also assured stakeholders of consistent and adequate returns, saying the company has the potentials to deliver stupendous financial performance and strong returns.
Speaking on the company’s half-year result, he noted that the group’s revenue rose by 5.3 per cent to N208.9 billion, just as the profit rose 1.1 per cent to N133.5 billion.
Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) appreciated by 1.6 per cent to N129.3 billion at 61.9 per cent margin while earnings per share dropped by 11 per cent to N5.53 billion.
Dangote Cement Plc is the largest company on the Nigerian Stock Exchange (NSE), with $24 billion market capitalisation. It has 29 million metric tonnes per annum (MTPA) production capacity across its three state-of-the-art plants in Nigeria.
Source : SunOnline