In spite of the economic recession that hit Nigeria in 2016, especially the production industry due to the sharp crash in the value of the naira and difficult access to the dollar, the Dangote Cement PLC (DANGCEM-NL) has continued upward, with a strong volume growth that resulted in 25.1 per cent increase in revenues, amounting to N615.1 billion.
In the company’s audited results for the year ended December 31, 2016, the company’s Chief Executive Officer, Onne van der Weijde, reminded how challenging last year was, not just for Nigeria but for many African economies. “But” der Weijde remarked, “we achieved sales and revenue growth of 25 per cent and consolidated our position as Africa’s leading producer of cement.”
Dangote Cement leads Africa’s cement production volume with nearly 46 metric tonnes per annum (mta) across Africa, with Nigeria alone controlling a production capacity of 29.25mta. Its Obajana plant in Kogi State, Nigeria, is the largest in Africa with 13.25mta of capacity across four lines. The company’s Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12mta, while the Gboko plant in Benue State has 4mta. The company plans to build new factories in Ogun State (3-6mta) and Edo State (6mta).
Robust production in these plants in 2016 enabled DangoteCem surmount whatever challenges the recession in the economy posed, with the company controlling a greater share of total market sales, which rose by 5.7 per cent, from 21.5mt in 2015 to 22.7mt in 2016.
A strategic move the company applied to drive growth early last year was the price reduction it introduced in September 2015, which came on very strong in the first four months of 2016. The company reported it achieved 11 months of growth after that reduction, with the majority of cement bags sold through retail outlets and distributors for small-scale building.