Dangote to bridge supply gap with 4.5mtpa expanded capacity
To check the rising price of cement in the country, Dangote Cement Plc said efforts were underway to expand its yearly production capacity by 4.5 million tonnes in the next three months.
Local cement prices have continued to rise with many end-users buying the product for about N4000 per 50kg bag. The rising cost has raised concerns in the building and construction industry.
According to the cement firm, local producers have witnessed an unprecedented surge in the demand for the product, which necessitates an increase in capacity to check the high prices.
To this end, the firm noted that it has invested in new production lines in Obajana (Kogi State) and Okpella (Edo) while the plant in Gboko, Benue state, is being restarted to address the supply gaps.
Group Sales and Marketing Director of Dangote Industries Limited, Rabiu Umar, explained that the firm had to cease its export programme to address local needs, despite potential earnings from such exercise.
Umar explained that the demand for cement is reflected in the company’s performance in the first quarter results shared with shareholders.
Dangote Cement increased the total volume of cement sold in the first three months of the year from its Nigerian operations to 4.9Mt compared to the 4.0Mt sold in the first quarter of 2020.
Umar added that 2,000 trucks have equally been procured to aid even the distribution of its products across the regions, reiterating that it is very difficult to control prices on the route to market.
“We are in a sold-out situation in the country presently. Though we control 60 per cent of the market share, we cannot determine the price of the product will drop but we are increasing supply to ensure that market dynamics of demand and supply inform the price of the commodity”, he added.
Dangote Cement GMD/Chief Executive Officer, Michel Puchercos, while speaking on the firm’s Q1 results, had said that the company started the first quarter of 2021 on a positive note and recorded increases in revenue and profitability.
He stated that the cement company posted a profit after tax of N89.7 billion, saying: “We took the strategic decision to pause our clinker exports to ensure we meet the rapid volume growth in the Nigerian domestic market. We are improving the output of our existing and new assets and aim to recommence clinker exports in the second quarter”