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Dangote Cement boosts production capacity amid increasing consumer demand

*Dangote Cement moves to boost production capacity this year as consumer demand for cement and related building materials rose by 40 percent in the past months

Isola Moses | ConsumerConnect

Sequel to the increasing demand for cement and related building materials in the past months in the country, Dangote Cement Plc has said it will improve production capacity by more than a third to meet Nigeria’s burgeoning consumer demand as the economy gradually recovers from recession.

Edwin Devakumar, Group Executive Director at Dangote Industries Limited, via phone said: “We are expanding capacity from about 50,000 tonnes a day at the beginning of the year to 70,000 tonnes a day at the end of the year,” Bloomberg report stated.

Devakumar disclosed that the cement manufacturer, owned by Alhaji Aliko Dangote, Africa’s richest man, is reactivating idle capacity at its Gboko plant, in Benue State, following a 40 percent increase in consumer demand in the Nigerian economy in the past seven months.

The International Monetary Fund (IMF) recently increased its projection for Nigeria’s 2021 economic growth to 2.5 percent from 1.5 percent.

That would be the fastest expansion since 2015, according to report.

In regard to purported price fixing also in the cement industry in the country, the Nigerian Federal lawmakers earlier in the week have urged the Federal Government to break the dominance of the country’s three biggest cement makers in order to encourage more competition and make the market less “susceptible to price-fixing practices”.

One of the legislators was quoted to have said this measure may reduce the cost of cement that is more than three times higher in the country than the global average.

Devakumar, however, stated that there is no price fixing in the Nigerian market.

“All other producers in the market can sell at their own price,” said Group Executive Director of Dangote Industries.

He contended that product prices have risen because of increased demand, the higher cost of diesel, and instability in gas supply used to power manufacturing plants in Nigeria.

He further noted that “transport fares for moving cement have jumped up due to congestion at the ports that has resulted in longer turnaround time for trucks.”

According to Devakumar, in 2020 Dangote Cement sales volumes in the country grew 12.9 percent to 15.9 million tonnes compared with the previous year.

The company has a 61 percent market share, Lafarge Africa Plc 22 percent while the BUA Group has the remainder, according to report.

Dangote has a large share of the market in Africa’s most-populous country because it has invested in the sector, said Devakumar.

He added: “Our crime is having confidence in the economy and investing to expand our capacity.”

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