Nigeria’s Dangote Cement Plc has disclosed a new plan that will see it begin exportation of its products right from its Congolese plant. This comes as the Nigerian Government’s decision to indefinitely shut down its land borders, caused Dangote’s Nigerian exports to drop by 41%.
The plan was revealed, yesterday, by Dangote Cement’s Chief Executive Officer, Joseph Makoju. He explained that the company’s total cement exports to the rest of Africa dropped to 0.5 million tonnes last year, down from 0.7 million tonnes exported in 2018 and 2017 respectively.
The border closure is one of many issues the cement maker faced in 2019, according to Makoju who will soon retire from his position as CEO. Reuters quoted him as saying that Dangote Cement’s production volumes in 2019 were flat at 14.1 million tonnes. More so, higher discounts, as well as higher marketing and haulage costs all combined to cause core profit to decline by 9.1%, even as margins declined by 59.2%. He said:
“We undoubtedly faced several challenges last year. We are very optimistic about the market in 2020 and we expect to see some increase especially for infrastructure project.”
It is in view of all these challenges that the company has decided to begin exporting its materials right from Congo where it operates a major factory. In the meantime, the company will also continue exporting cement to the rest of Africa from Nigeria, albeit through the sea. This is according to Dangote Cement’s Head of Investor Relations, Temilade Aduroja. In an emailed response to Nairametrics, she said:
“We will still be exporting from Nigeria via shipping, through the ports of Apapa and Onne – this will begin later this year. The exports which are affected by the border closure are the road exports. Congo is not an alternative for Nigerian exports.”
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Recall that Nairametrics earlier observed in a previous article that this is the second time Dangote Cement Plc is reporting a drop profit since 2011. In 2016, profit dropped to N142.2 billion, down from N153.2 in 2015. The company bounced back in 2017 and 2018 with profits of 204.2 and N390 billion respectively.
Earlier today, CSL Stockbrokers retained its BUY recommendation for the Dangote Cement stock. The company’s share price currently stands at N170 based on trades on the Nigerian Stock Exchange.