Nigeria and Africa’s largest cement maker, Dangote Cement is engaged in a fierce battle to regain lost grounds in Nigeria’s lucrative cement market.
Dangote Cement as at end of 2018 controlled about 60 per cent share of the country’s cement market, followed by Lafarge Africa with 30 per cent share and Cement Company of Northern Nigeria (CCNN) picking up the balance of 10 per cent.
This seemingly acceptable structure had remained so for sometime, however, recent events have rattled the market, thus causing the displacement of ‘ancient boundaries.’
Over the last few months of 2019, the price of cement did drop a notch, as the coming on stream of CCNN’s Kalabaina plant added to industry capacity and this had required the smaller manufacturer to cut product price to push higher sales volume.
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The fall in price had compressed margins of the larger players such as Dangote Cement, in the business, as the company’s margins fell below its previous 60 per cent while Lafarge Africa’s margins dipped slightly below 30 per cent even though Lafarge’s sales volume was expected to have increased in the first quarter of 2019 unlike the case of Dangote Cement which saw a YTD fall in revenue and sales volume.
However, Dangote Cement said it would open export facilities in Lagos and Port Harcourt this year, and attract $700m foreign exchange into the Nigerian economy. This, the company said, is part of the measure to increase revenue and grow market share.
Chairman of Dangote Cement, Alhaji Aliko Dangote, disclosed this last week in Lagos.
He said 2018 was the company’s most successful year ever, with 7.4 per cent growth in the group’s cement sales to 23.5 million tonnes and 11.9 per cent growth in revenues to N901.2billion.
According to him; “Sales of cement from our Nigerian plants increased by 11.4 per cent to 14.2 million metric tonnes in 2018. Our Pan-African operations contributed 9.4 million metric tonnes, level on 2017, with strong performances in Cameroon, Senegal and Zambia helping to offset weaknesses in Ethiopia and gas turbines now operating in Tanzania, we expect these two large plants to improve their performance in 2019, further increasing profitability.
“As an organisation, we are focused upon improvement in all areas and I wish to pay tribute to all our staff for their constant efforts towards achieving the vision of our board and executive team.”
Dangote said the company would be effectively operating in at least 18 African countries in a short while by increasing the capacity of its Obajana Plant to 16 million metric tonnes, making it one of the biggest cement plants in the world.
Group Chief Executive Officer of Dangote Cement, Joseph Makoju, said the company in 2019 would focus on efficiency gains and achieving higher sales in domestic and export markets.
According to the 2018 Global Cement Directory, Dangote Cement is the 10th largest cement producer in the world. With a total capacity of 43.8 metric tons per year and 12 plants (10 integrated and two grinding plants), it is Africa’s largest home-grown cement producer.
With a market capitalisation of N3.22 trillion as at June 10, 2019, it is the most capitalised company on the Nigerian Stock Exchange (NSE) as it contributes 24.12 per cent to the total market CAP.
