Dangote sees strong cement sales in Ethiopia

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Dangote reported cement sales of 2 million  in Ethiopia in 2016, the company said in its latest annual report, achieving an estimated market share of 24%, despite the entry of a new 1.4 million tpy plant into the market in 4Q16 and a challenging operating environment.

The company’s 2.5 million t Mugher plant opened in May 2015 and is located 90 km from the capital, Addis Ababa.

Sales from the plant were well ahead of the 1 million tpy achieved in the seven months of operation in 2015, Dangote said, despite “significant disruption to sales caused by drought, civil unrest and attached on foreign-owned factories.” Cement prices averaged US$80 per tonne, ending the year at US$82 per tonne.

“With low per-capita consumption of around 60 – 65 kg, good economic growth and a large population, Ethiopia will continue to be a key market, especially if the government can deliver its ambitious plans for development,” the company continued, adding that it plans to double the size of the Mugher plant.

In addition to supplying the domestic market, cement from the Mugher plant has also been exported. In a July 2016 trading update, the company said Mugher cement had been sold into the Kenyan market at US$74 per tonne – significantly undercutting local producers.

The interest in export was affirmed in its annual report, with Kenya mentioned again as a potential market, as well as Somalia and South Sudan.

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