Nigeria’s Dangote Cement Plc has disclosed a new plan that will see it begin to export its products to the rest of the African market right from its Congolese plant. This comes as the Nigerian Government’s border closure caused Dangote’s Nigerian exports to drop by 41%.
The plan was revealed, yesterday, by Dangote Cement’s Chief Executive Officer, Joseph Makoju. He explained that the company’s total cement exports to the rest of Africa dropped to 0.5 million tonnes last year, down from 0.7 million tonnes exported in 2018 and 2017 respectively.
The border closure is one of many issues the cement maker faced in 2019, according to Makoju who will soon retire from his position as CEO. Reuters quoted him as saying that Dangote Cement’s production volumes in 2019 were flat at 14.1 million tonnes. More so, higher discounts, as well as higher marketing and haulage costs all combined to cause core profit to decline by 9.1%, even as margins declined by 59.2%. He said:
“We undoubtedly faced several challenges last year. We are very optimistic about the market in 2020 and we expect to see some increase especially for infrastructure project.”
It is in view of all these challenges that the company has decided to begin exporting its materials from Congo where it operates a major factory. The company also plans to begin heavy promotions for its Nigerian production in order to encourage growth.
As Nairametrics earlier observed in a previous article, this is the second time Dangote Cement Plc is reporting a drop profit since we started tracking its earnings reports in 2011. In 2016, profit dropped to N142.2 billion, down from N153.2 in 2015. The company bounced back in 2017 and 2018 with profits of 204.2 and N390 billion respectively.
Earlier today, CSL Stockbrokers retained its BUY recommendation for the Dangote Cement stock. The company’s share price currently stands at N170 based on trades on the Nigerian Stock Exchange.