DANGOTE Cement has announced ambitious plans to increase its Nigerian production capacity by about a third as part of a daring programme to meet the increase in demand as well as help cut retail prices.
Nigeria’s biggest company by market value, Dangote Industries is reviving capacity at its plant in Gboko, Benue State, in response to a 40% spike in Nigerian cement demand over the last seven months. Edwin Devakumar the executive director of Dangote Industries, said this became necessary as the economy recovers from an economic slowdown triggered the coronavirus pandemic.
Mr Devakumar added: “We are expanding capacity from about 50,000 tonnes a day at the beginning of the year to 70,000 tonnes a day at the end of the year. However, transport fares for moving cement have jumped up due to congestion at the ports that has resulted in longer turnaround time for trucks.”
Dangote Industries operates in 10 African countries with a production capacity of 48.6m tonnes per annum and faces major competition from rivals like BUA Cement and Lafarge Africa. Last week, Nigerian legislators called for an end to the dominance of the country’s cement industry by the three companies, asking that the market be freed up by making it less susceptible to price-fixing practices in order to win new entrants.
One lawmaker said the move could help cut the price of cement, which is more than 300% higher than the global average. He noted that prices have scaled up on account of higher demand, increased cost of diesel and erratic supply of gas required for powering manufacturing plants.
Nigerian cement sales volumes for 2020 jumped by 12.9% to 15.9m tonnes relative to 2019. Dangote Cement controls about 61% of the market, Lafarge Africa has a 22% share while BUA Cement has 17% of the market.