Dangote cement

[riskreturn]

Originally Posted by timothywill

firstly, those millions you saw being traded are cross-deal from one dangote's portfolio to another but when it got to N50, its from one dangote's portfolio to public investors. how do you want us to take heart, we can only take heart if we too can bring our little business to the stock market, like i now will be going public.

I think those early trades might have come mainly from those that got preferential allotments - the existence of which SEC has now outlawed. It would be recalled that SEC stated last week that a (or, rather, the) reason for outlawing preferential allotment (which is a normal thing in the rest of the world) is because banks were abusing the process by allowing preferential allottees to have their allotments prior to others, thereby enabling them to trade in the shares at advantagous prices before the market witnesses gluts from other subscribers. So, probably the same thing occured in the present case. But we should also bear in mind that many non-preferential subscribers had their allotments directly credited to their CSCS accounts. I was one of those (though some members of my family were not so lucky to be among) and I sold my allotment hurriedly/prematurely when it rose to 39.96 Naira (becasue I needed money to put into Skye Bank PO on the last day, Friday, that my broker stipulated as its own deadline for submission of application). Otherwise, I would have waited till when the price reached about 45 Naira or so before selling. So, I think it is just a conspiracy theory to say that it is Dangote himself that was offloading a part of his own 75% holding.

[Dragon123]

Originally Posted by riskreturn

I think those early trades might have come mainly from those that got preferential allotments - the existence of which SEC has now outlawed. It would be recalled that SEC stated last week that a (or, rather, the) reason for outlawing preferential allotment (which is a normal thing in the rest of the world) is because banks were abusing the process by allowing preferential allottees to have their allotments prior to others, thereby enabling them to trade in the shares at advantagous prices before the market witnesses gluts from other subscribers. So, probably the same thing occured in the present case. But we should also bear in mind that many non-preferential subscribers had their allotments directly credited to their CSCS accounts. I was one of those (though some members of my family were not so lucky to be among) and I sold my allotment hurriedly/prematurely when it rose to 39.96 Naira (becasue I needed money to put into Skye Bank PO on the last day, Friday, that my broker stipulated as its own deadline for submission of application). Otherwise, I would have waited till when the price reached about 45 Naira or so before selling. So, I think it is just a conspiracy theory to say that it is Dangote himself that was offloading a part of his own 75% holding.

He could as well have been, especially as large volumes were traded. Since the law does not prevent him from selling, then he could as well have been one of those who sold. I made the point when this allocation came out that over subscription was very well planned into the PO judging by the way the offer form was being distributed to passing motorists on the streets of Lagos. The allotments by and large was peanuts to a very large percentage of all that subscribed. So who else could be selling large volumes if not the owners and insiders? God dey.

[Apache]

Nigerian Dangote buys into S. Africa cement firm | Industries | Industrials, Materials & Utilities | Reuters

[hispy99]

Posted Sunday, July 6, 2008

Dangote set to ride African’s cement market

“Our target is by 2010, Nigeria will have about 26 million tonnes. This figure compared to the current production is about 6.5 million tonnes”. “Each of the three new cement plants will be operational within 28 months and combined with our existing assets. These will bring our production capacity in Nigeria up to 26 million tonnes per annum (PA)” (Source: Speech delivered by Alhaji Aliko Dangote on signing of the $1.28 billion syndicated seven year project finance facility)

Proshare NI sought to find out more about Dangote Cement Plc playing in the world global market by seeking presence in about 10 countries across Africa.

In this interview with PETER OBIORA of Proshare NI, Aliko Dangote, Chairman of the Dangote Group discussed its plans to produce 26 million metric tonnes of cement by the year 2010 and its $1.28 billion (N149.76 billion) acquisition of four new cement plants from Sinoma a Chinese company and how Dangote Cement intends to produce cements as low as N1, 000 in price for Nigerians. Excerpts:


How much is involved in this project?
The total amount involved between the building of the factory, power generation and mining is totalling about $3.0 billion. We have already built the factory with N1.87 billion and we have paid about $600 million as equity.

The banks gave us $1.28 billion, they have already disbursed the money and we have opened the production about 30 days; this is just the signing ceremony, time has started counting and I think in the next 28 months; we will have the factories ready.

We are expanding the Obajana Cement Factory; it will be expanded with about 12 million tonnes. This will make Obajana the largest plant ever in the world. Ibese and Sagamu will have five million tonnes respectively.



What is Dangote Cement’s target?

Our target is by 2010, Nigeria will have about 26 million tonnes. This figure compared to the current production is about 6.5 million tonnes.

Apart from this, we will have enough cement in Nigeria and the country will earn foreign exchange from the exportation of cement by year 2010.



The implication of this on the price of cement

Obviously this will have an effect on the price. In Nigeria, we can only determine our cement prices at the factory gates; this is what we can control. Maybe if the price of diesel goes up by N1.00, transporters will double their fares, we cannot control this whatsoever. However, it depends on where customers buy their cements.

Today the determinant factor for the prices of cement is the imported ones. This means that customers would pay for the cost cement and freight.

Currently, so many countries are developing their economies; countries such as Indian and Egypt to mention; but two.

These countries had actually banned the export of cement; due to the fact that they need it in their local environment. This is one of the reasons the cost of freight is so high; once the price of oil goes up by $6.00 per barrel; everybody will increase its price.

Again, we are depending on the owners of ships to bring in our materials; because we don’t have them. Take for instance, the price we have incurred for shipping is about one and half times of what we paid for cement last year; in terms of Cost and Freight (C/F).

Therefore, things are changing everyday; and we cannot really control prices, the only way to do this is for Nigeria to produce the cement locally. And once you produce locally, the prices will be relatively cheap.

Our target is that every Nigerian should be able to buy the cement for at least N1, 000 per bag maximum. If we are going to achieve this, we must make sure to invest a lot of money in the business.

In the last four to five years, we couldn’t raise this kind of money to even produce 26 million tonnes; but right now we have come of age, our banks are really supporting Nigerian companies.

As it is today, we have even paid all our international debts; thus, we are only working with local banks and they are truly supportive.



Where is the technology coming from?

We are using the Chinese to get cheap labour and excellent design. However, majority of the equipments are coming from Germany and Italy. Therefore, it is a mixture of Chinese, German and Italian technology. By the year 2010 cement will not cost more than N1, 000 per bag.



Dangote Cement expansion and quality control

We have robots that are testing at random all the time; in order to have consistency on the quality of cement. It is highly automated, you can see that the loading of the trucks could not be done manually; but automated. Every 2.5 minutes we have one truck, but in 2010 every one minute, we expect to have a truck. A truck will contain 700 bags and we will operate 365 days in a year.



Obajana was built to produce 5 million metric tonnes, but currently producing just a little over 3 million metric tonnes. Why anticipate 11 million metric tonnes?

If at that time, we had the money; Dangote Cement would have built 50 million tonnes; because I know that the demand is growing day by day. Though we had problems of gas, but from this week we will step up production to make it 5.0 million tonnes.

The factory of Obajana today is five square kilometres and another extra of four square kilometres. It is tight, but we are going to do quite a lot in terms of the road, every one minute, there is one truck coming out 24 hours a day; it is massive.

No matter what we do today, I cannot bring the prices down; even if I give out the cement free of charge. There are so many categories of buyers waiting for the cement, it will not get cheap. The only determinant of prices of cement is the imported ones which is highly expensive.



In which countries have you showed presence with your cement?
Right now, we are going to about 10 African countries, we have Tanzania; where we are putting up two lines. The others are Zambia, Congo Democratic Republic, and South African which we have already signed.

We also have countries like Ethiopia, Equatorial Guinea; we are signing hopefully Libya by next week. By timing us, we have a lot of countries we are going, because the cement we are going to present in Nigeria will not be dumped; but to create market for them. Some of these countries do not have the raw materials to produce cement.

The other country which we are producing also is Senegal and it will supply to about six other countries. We want to cover everywhere in Africa. Senegal will supply Mali, Burkina Faso, Gambia, part of Gabon and so on.

[DaInvestor]

when the offer go commot. dats all i've been waiting for. Its the only public offer i plan to take part in this year, already waiting to fill the forms for all the members of my family cos i know this baby is definitely going to be over-subscribed no matter the price.

Dangote has the Mildas touch, turns evrything to GOLD

abeg make we know when them go do IPO

[edwardaigbokhan]

My people una never tired for public offers/pp? as for my family and i, it is secondary market or nothing. God forbid bad thing.

[hispy99]

Dangote, Sephaku formalise JV agreement on cement plant
By Agency Reporter
Published: Friday, 10 Oct 2008

Dangote Cement and Sephaku Holdings have entered into a shareholders agreement for the building of a 2.2m tonnes cement plant in South Africa.

The deal was first announced in April this year, with Dangote acquiring a 19.8 per cent stake through a private placement, the proceeds of which will be used to part-finance the building of the plant.

The agreement that was signed in London on October 1, 2008 by the Sephaku Chairman, Dr Lelau Mohuba, and Dangote Chairman, Alhaji Aliko Dangote, lays the foundation for the relationship between Dangote Cement, Sephaku Holdings and Sephaku Cement (in which Dangote Cement will eventually hold a 45 per cent equity stake). Dangote Cement is part of Nigeria ’s largest diversified group, Dangote Industries Limited, while Sephaku Cement forms part of the industrial division of privately held Sephaku Holdings, whose interests include mining and investment holdings.

A statement on Thursday also said that Dangote Cement was expanding its operations across Africa, with current projects in Senegal and South Africa and negotiations taking place in a number of other African countries.

Dangote was said to be putting in place the infrastructure necessary to achieve its target of 50 million tons of production capacity by 2012.

It added, “The joint venture is now in discussions with technical partners before construction commences.

Speaking from Dangote Cement’s Lagos headquarters, the Chief Executive Officer, Mr. Tony Hadley, said, “The joint venture with Sephaku Holdings and Sephaku Cement is a key part of our Pan-African expansion programme and provides direct access to the large South African market.

“We are delighted to announce that the joint venture is moving ahead smoothly and we look forward to beginning the construction process as soon as we have finalised the terms with our technical partners. Dangote Cement is set to achieve 26 million tonnes of production capacity in Nigeria by 2010 and 50 million tonnes of production capacity overall by 2012.”

[hispy99]

Dangote Cement to invest $3.5bn in Nigeria
By David Amuwa
Published: Friday, 24 Oct 2008
Dangote Cement has announced plans to invest fresh $3.5bn in Nigeria.

A statement on Thursday, quoted the Chief Executive Officer, Dangote Cement, Mr. Tony Hadley, as disclosing this at the 14th Nigerian Economic Summit in Abuja, noting that it would also invest $1.5bn in some African countries, making the planned investment to add up to $5bn in the continent.

“Dangote Cement has announced plans to invest $3.5bn in the cement industry in Nigeria and plans to invest over $5bn across Africa. The company is targeting installed production capacity in Nigeria of 26 million tonnes by 2010 and 50 million tonnes of capacity across Africa by 2012,” Hadley said.

He used the event to give executives and policymakers an overview of the issues currently facing the cement industry in Nigeria and the potential for growth.

He said, “Dangote Cement has demonstrated unprecedented commitment to the development and growth of the cement industry in Nigeria and is focusing on the installation of value added manufacturing capacity in Nigeria.

“The cement industry will provide the building blocks for achieving Vision 2020, laying the foundation for vital infrastructure development and Nigerian industrialisation.”

Hadley called on the Nigerian government to ensure that key strategies were put in place to nurture local manufacturing and pushed for a move away from import dependence, emphasising the long term benefits of local production to the nation’s economy.

The benefits include more employment and skills development, greater value added growth and higher tax revenues.

He called on the Federal Government to consider financial sector and infrastructure development reform as well as education and training to ensure the development of the Nigerian cement industry.

Hardley stated that Dangote Cements long term vision is to first ensure Nigeria produces sufficient cement to satisfy market demand and to go onto making Nigeria a net exporter of cement.