Africa’s largest cement producer, Dangote  Cement looks set to consolidate its position as one of the top 3 cement producers on the continent, as it is set to begin expansion of its cement plants across the continent.

Here is what they plan to do in a nutshell

  • The Company has an annual production volume of 45 million tonnes which it plans to increase to 80 milllion tonnes in two years.
  • The funding required for the expansion projects will be sourced from Chinese and Indian banks and internally generated funds.
  • The company also operates in more than  40 countries and has a 40% market share in sub Saharan Africa.
  • The company plans to expand its largest plant in Nigeria by 3 million tonnes, and construct 3 more plants in West Africa.

What this could mean for cement market in Nigeria?

While the name of the company’s largest plant in Nigeria is not mentioned, information from the 2016 Annual report for the company, put the production capacity of Obajana cement plant 13.3 million tonnes. Increasing production volumes in Nigeria means the company would be in an even bigger position to determine prices in the Nigerian cement market.  Economics of scale means the company can afford to sell at the slimmest of profit margins to push volumes. The company is currently the largest cement producer in the country.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy.

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