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Dangote Cement Now Nigeria’s Biggest Firm, Invests In S/Africa  print

Published on October 26, 2010 by   ·   1 Comment

Dangote Cement Plc, Africa’s biggest producer of the building material, today listed its shares on the Nigerian Stock Exchange, making it the biggest company on the country’s bourse.

Dangote listed 15.5 billion ordinary shares at 135 naira each, the NSE said in an e-mailed statement, according to Bloomberg. That gave the company a market capitalization of 2.09 trillion naira ($13.8 billion), making it the biggest on Nigeria’s bourse, overtaking Nigeria Breweries Plc.

The company will also sell 100 million shares at 135 naira and these will trade today, Dangote said last week. Vetiva Capital Management Ltd. acted as lead financial adviser on the transaction, while Afrinvest (West Africa) Ltd. introduced the listing to the bourse.

Dangote Cement plans to raise capacity more than fivefold by 2015 to 46.2 million tons through investment in other African countries and Nigeria as the continent’s nations build roads, houses, bridges and railways, creating demand for the building material. The company boosted its African expansion by taking up 64 per cent in a South African cement company, it was announced last night.  The 2.2mtpa cement plant will be built at Aganang near Lichtenburg. His 36 per cent partner will be JSE-listed empowerment company Sephaku Holdings. Dangote will be chairman.

At present Dangote’s network of cement companies in Nigeria, Ghana, Benin and other produce 20mtpa, more than the total South African market.

Demand for cement in Nigeria is said to grow an average 10 percent annually, Access Bank Plc wrote in a May report.

Stanbic IBTC Bank Plc, the Nigerian unit of Standard Bank Group Ltd. initiated coverage of Dangote Cement with a “buy” recommendation and a 12-month price estimate of 170.50 naira per share, analysts including Adenrele Adesina wrote in an e-mailed note to clients.

Dangote, which reported a 67 percent increase in profit for the nine months through September to 75.3 billion naira ($495 million) on October 20, is majority-owned by Dangote Group, a business with interests in sugar refining and flour mills that is headed by Aliko Dangote, a 53-year-old billionaire.

Before flying out to the Lagos listing, he told South African analysts that Dangote, this week, invested another R779 million to bring the total investment so far to R1.149 billion.

“I have been told it was the largest investment by any African company in South Africa. Africa is coming of age. South Africa is my home. I feel at home here. The Sephaku development will be accelerated to finish by 2012.

“In Nigeria, we are doing 12mtpa. So this is not a big deal. Dangote Industries will bring its full experience to the project. We aim to have cement plants in five other African countries by 2013. That is because we foresee growth in South Africa and other African countries.

“We shall build modern cement plants in strategic locations. Cement is one of the key building blocks of development. In Africa, nearly everywhere, there is unmet demand for housing. We shall build, using the latest technology and we’ll stick to environmental requirements. Indeed we’ll generate less dust than German requirements.

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Posted by on October 26, 2010, 12:32 pm. Filed under Business, Business News. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

1 Comment for “Dangote Cement Now Nigeria’s Biggest Firm, Invests In S/Africa”

  1. John Musa

    Congrats Dangote! Show the world that it is not all bad news of police killings, boko haram, MEND and corruption in Nigeria.

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