“Primarily there were two key drivers for these results in this quarter and in the first half of the year. One was of course the sales volume and number two was also the driving down up to variable cost. One of the areas we also got a little bit of help over the first half was that we had more gas available,” Dangote Cement CEO Devakumar Edwin told CNBC Africa on Monday.
Market consumption in cement continues to grow in Nigeria and, according to Edwin, the company would therefore need to continue increasing its production volumes.
The Dangote Group is therefore in the process of placing grinding plants long the West Coast of Africa and long the Central African coast. The company also has plans to build a fertiliser plant as they enter the petrochemicals space next year.
“These are areas where there’s a huge gap between the demand and the supply, not only within Nigeria but for the refinery and the petrochemicals and also fertiliser in the whole of Africa. There are very few refineries operating with adequate capacities and the same thing with fertiliser, so we are investing in two trains of fertiliser to produce about 2.6 million tonnes per year,” Edwin explained.
The fertiliser trains will be the largest available in the world today and will make the Dangote Group the biggest fertiliser player in Africa.
“The rest of the six months, we expect the earnings to be in the same line as we have done in the first half. We are planning this year to retain only about 30 per cent of our earnings and give out 70 per cent in terms of dividends,” said Edwin.