Dangote Cement’s foray into African regions is yielding returns-CEO

…. Plans 100% coal production in September

Chief Executive Officer of Dangote Cement Plc, Onne Van der Weijde, has said the company’s diversification into other African regions is finally yielding results.

He disclosed that the company will commence 100 per cent coal production in September, 2016, in an attempt to overcome the shortage of gas supply in the country and reducing the challenging of foreign exchange paid on gas.

He explained that other Africa regions where Dangote Cement is operating have contributed 26 per cent of the Cement giants revenue in the first six months of 2016, compared to 14 per cent contributed in the same prior last year.

Onne Van der Weijde who presented the company’s ‘Facts Behind the Figures’ on Wednesday noted that Dangote Cement increased its revenue by 20.6 per cent to N292.2 billion from N242.2 billion.

Where Nigeria grew by 4.2 per cent to N216.6 billion, West & Central Africa grew its revenue significantly by 192 per cent from N17.1 billion to N49.9 billion for the first half of 2016.

South & East Africa grew its top line by 50.9 per cent to N26.1 billion from N17.3 billion recorded for the corresponding period of 2015.

Africa’s largest cement producer, Dangote Cement had earlier reported a decline of 15 per cent in its profit for the half-year period of 2016. The company reported a profit after tax of N103.4 billion compared to N121.8 billion declared in H1 2015, even as profit before tax fell three per cent to N124.9 billion from N128.7 billion, on account of increasing operating cost spurred by hike in fuel cost, pipeline disruptions, foreign exchange instability amongst others.

According to him, “Our investment in coal is enabling us to reduce our dependence on both oil and gas as fuel sources, thus protecting our production from disruption and improving margins. The devaluation of the Naira will obviously have an impact on costs and our priority will be to protect margins.”

Commenting on the year’s outlook, the he said,”We are confident of delivering good growth this year despite the challenging economic conditions facing Nigeria and the rest of Africa. We have achieved strong sales growth in Nigeria and are readying more coal-burning facilities that will improve our fuel security, reduce our dependence on LPFO and even gas and help to restore our margins. As we have previously made clear, our focus will be to protect margins through cost controls and adjustment of prices.

‘’We have new capacity coming on stream in Congo and Sierra Leone and expect Tanzania to increase its market share in the coming months. Foreign exchange constraints in Nigeria have made us reconsider the pace of our expansion and we now believe that a five-year building programme will enable a more optimal balance of funding and investment.’’

Picture caption,  L – R: Haruna Jalo-Waziri, Executive Director, Capital Markets, The Nigerian Stock Exchange (NSE); Ade Bajomo, Executive Director, Market Operations and Technology, NSE; Onne Van Der Weijde, Group Managing Director/CEO, Dangote Cement Plc Ernest Ebi, Director, Dangote Cement Plc and Bola Adeeko, Head, Corporate Services, NSE at the Facts Behind the Figures presentation at the Exchange today.