Dangote Cement Boosts Capacity To Meet Demand Surge

Agency Report

Dangote Cement says it will boost capacity by 40 per cent this year to the increase demands of the products.

Dangote Cement Plc, Africa’s biggest producer of the building material, will ramp up capacity by more than a third to meet Nigeria’s burgeoning demand as the economy recovers.

“We are expanding capacity from about 50,000 tons a day at the beginning of the year to 70,000 tons a day at the end of the year,” Edwin Devakumar, group executive director at Dangote Industries Ltd., said by phone.

The cement manufacturer, owned by Africa’s richest man Aliko Dangote, is reactivating idle capacity at its Gboko plant, in Benue state, because of a 40 per cent increase in demand in Africa’s largest economy, in the past seven months, Devakumar said.

Nigerian lawmakers earlier this week urged the government to break the dominance of the country’s three biggest cement makers to encourage more competition and make the market less “susceptible to price-fixing practices.” That may reduce the cost of cement that’s more than three times higher in Nigeria than the global average, a lawmaker said.

Devakumar said there’s no price-fixing in the Nigerian market. “All other producers in the market can sell at their own price,” he said.

Prices have risen because of increased demand, the higher cost of diesel and instability in gas supply used to power manufacturing plants, Devakumar said.

In addition, “transport fares for moving cement have jumped up, due to congestion at the ports that has resulted in longer turnaround time for trucks,” he said.

In 2020 Dangote Cement sales volumes in Nigeria grew 12.9 per cent to 15.9 million tons compared with the previous year. The company has a 61 per cent share of the market, Lafarge Africa Plc 22 per cent and BUA Group the remainder.

Dangote has a large share of the market in Africa’s most-populous country because it has invested in the sector, Devakumar said.