Firm records 12.6 percent growth in African sales, Congo plant to join
By John Eche
Dangote Cement’s half year results indicates a 12.6 % sales volume increase across Africa, indicating a growth on the continental plane that has not been matched by activities in its home Nigerian market.
The firm which is currently Africa’s largest cement producer, in its unaudited results for the six months ended 30th June 2017, and which was released on the floor of the Nigerian Stock Exchange indicated that the increase in sales volume showed a growing capture of Pan-African market as Dangote Cement continues to gain grounds, and with a new plant now scheduled to commence operations in the Democratic Republic of Congo this July.
Overall, revenues from operations in Nigeria increased by 34.5 percent to ₦291.4 billion while Pan-Africa revenue increased by 63.7 percent to ₦124.4B from ₦76.0B mainly as a result of what insiders say are increased volumes and foreign exchange gains when converting the sales from country local currency into the local naira which has recently taken huge hits from recessionary storms.
A further analysis of the half year result revealed that the current increase in sales volumes within the firm’s African operations translates to actual sales of 4.7 million metric tons of products with Sierra Leone making a 53 kt maiden contribution.
Furthwer breakdown of the sales contributions from its individual African-states markets in the operations scattered around the African continent revealed that a total of 1.1million ‘metric tons of cement was sold in Ethiopia, almost 0.7 million metric tons sold in Senegal, 0.6 million metric tons sold in Cameroon, and 0.5 million tons in Ghana
Also, 0.4 million metric tons of cement was sold in Tanzania and 0.3 million tons in Zambia.
Sales volumes from its more established Nigerian home operations however fell from 8.8Mt to 6.9Mt, occasioned by among other things, the national recession, and the onset of rains and flooding which stalled many construction projects.
Reflecting on the half year results, Dangote Cement’s Chief Executive Officer, Onne van der Weijde expressed satisfaction that the company’s revenues have continued to grow despite low sales from the Nigerian operations noting that the revenues grew on the strength of sales from other African operations
Said he: “Our revenues have continued to grow despite the lower volumes seen in Nigeria, especially because of the recent heavy rains. Our margins have improved significantly, helped by improved efficiencies and a much better fuel mix in Nigeria.
“We are using much more gas and increasing our use of coal mined in Nigeria, thus reducing our need for foreign currency and supporting Nigerian jobs.
”Our Pan-African operations are growing well and increasing market share. We saw our the first sales from Sierra Leone in the first quarter and our new plant in the Republic of Congo will be in production at the end of July, further increasing our footprint across Africa and strengthening our position as its leading manufacturer of cement.”
The Company reports that it estimated that Nigeria’s total market for cement was 10.2 million tonnes (Mt), 23.2% lower than the estimated 13.3Mt sold in Nigeria in the first half of 2016. Of total market sales in the first half of 2017, just 0.1Mt was imported.
As a result of the slower market, our Nigeria operation sold nearly 6.9Mt of cement, down 21.8% on the 8.8Mt sold in the first half of 2016. We estimate our market share to have been about 64.5% during the first six months of 2017.
Aliko Dangote, Chairman, Dangote Group