Dangote Cement and Future Challenges

DANGOTE CEMENT PLC: Half- Earnings Forecast shows Turnover N150.346bn and Profit after Tax N77.460bn, ending June 31, 2012.
Despite the facts operations environment is not favourable, Dangote cement PLC has submitted her unaudited result for the first quarter ended March 31, 2012 showed positive revenue of N64.114bn in contrast to N54.507bn 2011. Whilst the Profit after Tax stood at N30.326bn compare with N27.391bn 2911. Also the Net Assets reached N330.290bn as against N298.778bn 2011.
Management of the Dangote Cement plc has enriched his esteem shareholders with cash dividend of N1.25 per share and bonus of one for every ten ordinary shares holding for every shareholder totaling 1 549 137 036 (one billion, five hundred and forty-nine million, one hundred and thirty-seven thousand and thirty-six) new ordinary shares of 50kobo each worth of N774 568 518.40(seven hundred and seventy-four million, five hundred and sixty-eight thousand, five hundred and eighteen Naira and forty kobo).
According to estimates from industry experts, Nigeria has an estimated deficit of 16 million housing units. Should federal, state governments and the private sector apply significant efforts to bridge the gap, let say half of the estimated deficits, which will have impact on cement consumption rate greatly.
Alhaji Aliko Dangote stated that “as part of our corporate culture, we are committed to sustainable development as well as reducing the environmental impact of our operations. Furthermore, we are driven to conduct our own activities and operations to reflect the best environmental and social practice”.
Dangote further revealed that “we are constructing 3,000 tonnes per day cement plants in other African countries such as Zambia, Tanzania, Ethiopia, Congo, and Gabon while bulk cement terminals/grinding units in Sierra Leone, Ivory Coast, Liberia Ghana, Tanzania, and Cameron, these additional production volume that will reflect growth in turnover and profitability surely will enriched our shareholders”.
He however said that we are aware of the fact that the future remains challenging but with expansion programme ambitious here in Nigeria and across other African countries, there is no stopping your company from reaching to top.
Dagote Cement plc operates cement plants for local manicuring of cement and also cements terminals bagging of imported bulk cement.
Obajana Cement Plant (OCP) is a Greenfield cement project commissioned at Obajana in Kogi State with production capacity of 5 (five million) million tons per annum. The plant is powered by a 135 Mega Watts gas-fired power and a natural gas pipeline.
While Ibese Plant also is Greenfield cement plant consisting of two 3 million metric tons annual production capacity lines making for a combined 6 million metric tons per annum in Ogun State. The plant is powered by a dual firing plant (Natural Gas and LPFO) of capacity of 112.5 mega Watts-gas based from Siemens. In addition, the plant has a Gas pipeline of aprox 22kilometer long for supply of gas to cement plant and power plant with a capacity of 64000Cubic Unit per hour.
Furthermore it was revealed that Dangote has successfully revived the Gboko Cement Plan (GCP- formerly BCC) in Benue State with refurbished production facilities to manufacture 3 million tons per annum of high quality.
Dagote Cement Plc operates cement terminals for bagging of imported bulk cement. The steps at imported terminal is that the cement is repacked from the bulk loaded tankers of 30 metric ton into 50kg bags or 1.5metric tons (MT)jumbo bags for delivery to various depots.
The industry watcher said that looking at Dangote cement plc transactions account; cash flows revealed that the company stands healthy in the financial performance due to records of N165 729 661.00 (one hundred and sixty-five million, seven hundred and twenty-nine thousand, and six hundred and sixty-one Naira) generated by operations, N148 612 603.00(one hundred and forty-eight million, six hundred and twelve thousand and six hundred and three Naira) were used for investments (fixed assets gulp 38.99 percent and 43.42 percent of the fund was spent on long term receivables respectively) while N24 554 918.00 (twenty-four million, five hundred and fifty-four thousand and nine hundred and eighteen Naira) was used to paid the debts including dividends. Yet, the company left with N7 447 860.00 (seven million, four hundred and forty-seven thousand and eight hundred and sixty Naira) un-used that is idle fund stay in management wallet in the next 12 months to play with.
According to industry watcher, the management spent 99 kobo to achieve every sale of N40.00 they made in the Financial Year Ended 2011.
The cement industry uses huge amounts of fuel and electrical power. With the increase in fuel and electricity costs in Nigeria, the cement industry is presented with both a problem and an opportunity.
The cement industry uses huge amounts of fuel and electrical power, and is critically sensitive to price rises in both. The industry is vulnerable to power-cuts and reduction in power quality.
For that reason Cement producers interested in Waste heat recovery in the cement industry while others interested in waste heat recovery (lime, gypsum, steel, paper, chemicals, refinery, etc)
However, the industry watchers are of the opinion that the cement and lime industry should perfectly locate to take advantage of the use of waste heat recovery. Through using waste heat recovery system, the cement industry can regain the energy in its waste-gasses and use it to generate electricity, thus partly insulating itself from electricity price increases as well as improving its overall efficiency in State-of-the-art in waste heat recovery process.
Furthermore, the industry watcher urges Federal Government to assist the Cement producers in the country with cheap fund to acquire basic technology of waste heat recovery system which enable them to reduce cost of selling price of cement per bag. These, they said will lead to mass development in housing and more jobs for the workable populace.