In a deft move to consolidate its leadership position in the Nigerian cement sector, Dangote Cement Plc has announced the commencement of construction of new cement plants in two communities in the country.
The new plants are expected to add 9million metric tonnes per annum to the company’s current local cement output of 29.25 million metric tonnes, bringing it to a total of 38.25 million metric tonnes per annum.
The company stated that the communities in which it is setting up the new plants are Okpella in the northern part of Edo State, South-south of Nigeria with a three million per annum plant and another six million per annum capacity plants in Itori in Ogun State, South-west of the country.
The Group Managing Director and Chief Executive Officer (CEO), Dangote Cement Plc, Mr. Devakumar Edwin, who made the announcement in Lagos, explained that the Okpella plant will be made up of one line and will produce a total of 3 million metric tonnes per annum, and the Itori plant which will deliver approximately 6 million tonnes per annum from two procution lines. Both plants are expected to come on stream within the next three years.
Devakumar said the move by the company was to help expand the spread of the company’s manufacturing outfits, thereby reducing the transportation cost component of their operations.
He added that the new investments will further lower cost of production; bring about future reduction of the price of cement and also to generate employment opportunities for the youths of host communities.
Also speaking at the event, the Group Managing Director, Cement, Dangote Industries Limited, Mr. Onne Vander Weijde, said the demand for cement was still high considering the level of population growth in Nigeria, saying that Nigeria’s per capita consumption of the building material which is just above 100kg per capita is relatively low, indicating a massive growth potential.
“There has always been a surplus in demand because cement was not readily available, but ours is available and the prices are affordable. Consumer prices have fallen by 35 per cent in naira terms, but if you take it in dollar terms and relate it with today’s parallel market rates, you will realise the price of the product has gone down in Nigeria, and in some cases below the prevailing average global price.
“This itself is a huge driver for increasing the per capita consumption,” he said.
He said with the capacity of the plants in Nigeria, the company can supply the entire western and central Africa region, maintaining that currently, Dangote cement is exporting cement to Niger, Ghana, Togo with plans to move up to the Ivory Coast.
“Nigeria had always been an import-dependent country in terms of cement in the past and if we do not add up capacities, we will not be able to match up the consumption rate in the country. We want to ensure that we are always one step ahead to meet the local demand for the commodity,” he said.
According to him, the investments would create in excess of 5000 jobs at the beginning stage, noting that logistics and construction of the plants would also provide more employment opportunities indirectly to surpass that amount.
In his remarks, the Special Adviser to the President of Dangote Group, Mr. Joseph Makanju, said expectations were very high about cement price reduction when the nation began building local cement production capacity.
He noted that those price reduction expectations were now being met with cement now selling at about N1,300 per 50kg bag, among the most affordable in the world.
“Before now, cement was selling for over N2000. There is a lesson here to learn for the country and the media has a big role to play in this because when you go through transformation by moving a country from being dependent on import, there is need to encourage local investment to make those products being imported into the country,” he said.
“I am using this medium to appeal to the media by saying they have a huge role to play. You can refer to the cement story to educate the public. The price of cement has now come down to about N1300 in an environment where all the input costs are going up. The achievement is actually bigger than the figures.”
Expressing the excitement of the community on the announcement of the commencement of the new plant in Okpella, a community leader from the community, Chief Calib Musa, said the Community had long awaited the move by Dangote saying the Okpella people are happy and would give all the necessary cooperation to Dangote Cement.
His words, “the investment is a very welcomed development. Dangote has the full support of our people because we know that the initiative will be beneficial to us and the company as well”.
Musa stressed that communities around the world wish and pray for opportunities like this to come to their way and Okpella leaders, people and youths are happy with Dangote for his decision to contribute to the development of our land.
He explained that the investment move was long due adding that all the noise about the community not supporting Dangote Cement was a ruse.
“We are happy with Dangote we want him to move very fast and we thank him immensely,” said the community leader.