Dangote Cement Moves To End Cement Supply Shortage, Suspends Export From Its Terminals

Africa’s most diverse manufacturing conglomerate, Dangote cement Group, has announced that it has ceased exports from its commissioned export terminals.

The group made this decision with the aim of reducing the country’s cement supply deficit and keeping cement prices low in Nigeria.

According to a report from The Punch, the Group Executive Director, Strategy, Portfolio Development and Capital Projects, Devakumar Edwin made this revelation while speaking at a press briefing in Lagos this week.

The director stated that the increase in demand for cement products has resulted in a supply gap of around 40% in the country’s cement market and that Dangote Group, like every other player, is actively working to fill this gap.

The Cement demand and consumption in the country currently exceeds supply, possibly related to the country’s population growth and a strong appetite for property investment and construction as Investors see this as a good hedge against the fall of the local currency.

In order to close this gap, the players in the industry have taken measures to develop the cement production infrastructure in the country.

What has been done so far to close the supply gap?

Despite suspending exports from its recently commissioned export terminals, thereby foregoing dollar revenue, Dangote Cement has also reactivated its 4.5million mtpa capacity Gboko Plant which was closed 4 years ago.

In contrast, BUA Cement signed a contract with Sinoma CBMI from China to build three additional production plants with an installed capacity of 3 million metric tonnes each.

When these factories are completed in 2022, in addition to a 3rd cement line of 3 million mtpa in Sokoto which has been booked for commissioning in mid-2021, they are expected to increase the total installed cement production capacity of the company from 8 million mtpa to 20 million mtpa.

What you should know

• In recent times, allegations have been made against the Cement company on the ground that it increased its ex-factory price. Devakumar Edwin has found these claims to be false as the company has not increased its ex-factory prices for its cement product since December 2019 despite the recent increase in production costs.

• He went on to explain that DCP’s production costs have increased significantly in the past 15 months, as around 50% of its costs are pegged to the dollar.