Home » Aliko Dangote’s cement company moves to close cement supply gap in Nigeria

Aliko Dangote’s cement company moves to close cement supply gap in Nigeria

by Ishioma Emi

Dangote Cement Plc, the leading pan-African cement company owned by Africa’s richest man Aliko Dangote, has restated its commitment to bridge the supply gap on the Nigerian cement market.

Rabiu Umar, the company’s newly appointed group chief sales and marketing director, said the manufacturer is set to scale up production capacity to make cement products available throughout Nigeria and beyond, The News reported.

He added that a global surge in demand for cement is now underway after a prolonged period of contraction due to the COVID-19 crisis.

“We got into COVID last year and immediately after COVID there is a surge in demand and this is not particular to Nigeria alone, a couple of countries across the world are also experiencing the same; Mexico, South East Asia, among others,” he said.

Umar stressed that the surge is driven by a strong appetite for real estate investment, as many investors believe investing in property development will hedge against inflation and promises a higher return than the prevailing rates on capital markets.

The demand hike also grew the supply gap to around 40 percent, affording retailers and distributors the opportunity to increase prices. However, Dangote Cement, much like other key market players, has yet to raise its prices on cement products since 2019. 

How Dangote Cement is cutting the supply gap

In a bid to reduce the rising supply gap and to ensure sufficient production, Dangote Cement has suspended exports from its recently commissioned export terminals and reactivated its 4.5-million-mtpa Gboko Plant, which was shut down four years ago.

In addition, Dangote Cement is slated to launch operations at a new plant in Okpella in Edo State in the near future. This will help the company flood the market with cement products and by doing so spark a downward turn in market prices.

Worth noting 

Dangote Cement declared a record-high revenue of $2.5 billion (N1.03 trillion) in 2020, making it the second Nigeria-listed entity after MTN to surpass the N1-trillion mark that year.

The impressive revenue growth was supported by a strong demand for  cement, driven by a noteworthy appetite for real estate investment and recovering infrastructure.

During the year, Dangote Cement was able to upscale its installed cement production and bagging infrastructure by 3 million tonnes per annum, from 45.55 million to 48.55 million tonnes per annum.

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