Africa's Dangote Cement to Add 4 Million Tonnes Production

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--The cement production sector in Africa is set for ongoing expansion, as infrastructure development demand soaks up additional capacity. Merger and acquisition (M&A) activity is playing second fiddle to greenfield projects.

To meet local demand, Dangote Cement (NSE:DANGCEM) (Lagos, Nigeria) has started production at its new cement plant in Senegal, even before the project is fully completed. The new 42.5 grade of cement has been given priority in the production schedule.

The $300 million plant will add an annual 1.5 million tonnes to the country's production capacity as it targets regional exports of 2 million tonnes. The new-quality grade will assist Dangote's competitive position in an already-saturated local market, where two other producers already are operational.

In Ethiopia, Aliko Dangote (Africa's wealthiest individual) is set to inaugurate East Africa's largest cement plant. Dangote Cement Ethiopia built the $500 million, state-of-the-art plant in West Shoa zone, near Muger town, 85 kilometers (km) west of the capital Addis Ababa. With a production capacity of 2.5 million tonnes, it is sited on a 134-hectare plot and produces ordinary Portland cement (OPC) and Pretoria Portland cement (PPC) grades, as well as special cement for dam construction.

The plant was built by state-owned Sinoma International (SSE:600970) (Beijing, China), which specializes in cement factory construction. Machinery was procured from Germany, Sweden and Italy. Construction started in March 2012 and was completed ahead of schedule in 24 months, gaining a letter of appreciation from the Ethiopian government to Dangote Cement.

The project has a dedicated limestone quarry with automated truck-loading and robot technology to test cement quality. Ethiopian Electric allocated 40 megawatts (MW) of power to the new factory, and Dangote constructed a 57-km transmission line, built by Energo (Belgrade, Bosnia), to the project site. ABB (NYSE:ABB) (Zurich, Switzerland) set up the power substation at the factory. The company is to import 500 trucks from China to transport the cement; six of these are bulk cement carriers.

For related information see December 2, 2014, article - Tanzania Joins Africa's Cement Rush, Targets 6 Million Tonnes, and December 4, 2013, article - Dangote Cement Targets 50 Million Tons, Charges to Top of African Production League.

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