Ethiopia: Dangote keen on further expansion

Speaking to Ethiopian news portal, 2Merkato, Aliko Dangote, announced the Nigeria-based cement group would expand its investment in Ethiopia. Aliko Dangote, the Nigerian billionaire and chairman of Dangote Industries established a US$600m plant in Ethiopia in June 2015, but plans are on the table to expand the 2.5Mta factory.

Commenting on the development, Mesfin Abera, the company’s sales and marketing head, said Dangote Industries has decided to expand the existing plant. The 2.5Mta expansion work will be carried out at the cost of US$600m. “We now have 134ha of land and we need only an additional 18ha. We submitted our request to the Oromiya Regional State and we have got a positive response,” he noted.

Commenting on the issue of excess cement supply in the market, Mr Abera said, “We do not worry about the market. We have conducted a thorough market study. This country is growing at a double-digit rate. Massive infrastructure development projects are being undertaken. If the development plans set in the second growth and transformation plan are properly implemented, there will be no market problem.”

In search of new markets, the company has already started exporting cement to northern Kenya. Since February it exported 2200t of cement with a value of US$240,000. In addition, the company is undertaking market studies to expand to South Sudan, Somalia and Djibouti.

Meanwhile back in Ethiopia, Dangote is also planning to construct a bag-making factory in Muger City. The US$19m bag plant will have an annual production capacity of 120m cement bags. Dangote will only use 30-35 per cent of the cement bags it manufactures. The rest will be supplied to local cement factories. At present there are around 20 cement plants in the country, but only Messebo Cement manufactures its own cement bags. Mr Abera explained Dangote would expand its cement bag plant to PP bags manufacturing. “Once we have completed the first bag plant we will build the second phase that will produce different PP bags for other purposes,” he said.