Dangote Cement hopes to enlarge capacity by over one third in a bid to measure up to the fast-increasing demand for its products in its home market, as Africa’s largest economy heals from an economic slowdown triggered the coronavirus outbreak, the group executive director of Dangote Industries Limited said Friday.
“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 told Bloomberg on phone, the platform reported.
Dangote Cement, Nigeria’s biggest company by market value, is reviving capacity at its plant in Gboko, Benue State, in response to a 40 per cent spike in cement needs in Nigeria in the last seven months, he added.
It operates in 10 African countries with a production capacity of 48.6 million tonnes per annum, and faces major competition from BUA Cement and Lafarge Africa Plc in the West African cement trade.
Legislators in Nigeria this week called for an end to the dominance of the country’s cement industry by the three companies to free up the market by making it less “susceptible to price-fixing practices” in order to win new entrants.
A lawmaker said the move could help cut the price of cement, which is more than 300 per cent higher than the global average.
Aliko Dangote, Chairman Dangote Cement
“All other producers in the market can sell at their own price,” Mr Devakumar said, going further to say price-fixing does not exist in the Nigerian market.
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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.
“Transport fares for moving cement have jumped up, due to congestion at the ports that has resulted in longer turnaround time for trucks.”
Sales volumes by the company in Nigeria for 2020 jumped by 12.9 per cent to 15.9 million tons relative to 2019.
Dangote Cement controls 61 per cent of the market share, Lafarge Africa 22 per cent and BUA Cement the rest.