By Valentine Amanze
(with agency report)
Nigeria’s largest cement company, Dangote Cement, has relocated to Congo DR because of unfavourable business environment in the West African country.
The company’s
exports from Nigeria to neighbouring countries fell 41 percent in 2019 when Nigeria’s government closed the land borders.
Nigeria shut its land border in August to curb the smuggling of rice to neighbouring countries where it sells for more and an illegal arms trade.
The closure has also hurt other Nigerian businesses, including cement exports, and stoked inflation.
Joseph Makoju, Dangote’s outgoing chief executive, said the border closure led exports to drop to 0.5 million tonnes in 2019 from 0.7 million tonnes in both 2018 and 2017. He said the company had exported to West and Central Africa from Nigeria.
Makoju said total production volumes last year were flat at 14.1 million tonnes. Higher discounts, marketing and haulage cost caused core profit to fall 9.1%, while margins slid 59.2%, he said.
In February, Dangote Cement appointed ex-head of Lafarge Africa, Michel Puchercos, as its new chief executive, Makoju said.
“We undoubtedly faced several challenges last year,” Makoju told an analyst call. “We are very optimistic about the market in 2020 and we expect to see some increase especially for infrastructure project.”
Dangote now plans to commence export of clinker, the main raw material to make cement, from Congo in 2020 and promote its Nigerian production more heavily to support growth.
The company said it planned to commence a share buy-back programme this year once it obtained regulatory approval and said it was actively considering a London listing with its long-delayed London IPO still “under review”.
