AFRICANGLOBE – Dangote Cement intends to expand outside of Africa, revealing plans for cement plants in Iraq and Myanmar, as the company continues a strategy of globalisation.
Aliko Dangote – Africa’s Richest Man with a staggering net worth of $11.2 billion (Forbes, 2012) – hopes to see construction begin on cement plants in Iraq and Myanmar by next year, he disclosed in a recent interview with the Financial Times.
Dangote went on to tell the FT that he also had plans for Brazil, Chile and Indonesia in a further phase of rapid global development.
The company – which is Africa’s largest cement producer – has an aggressive growth plan, hoping to reach 100 million tonnes of output per year within the next five years. Dangote explains that this figure will only be reached through global expansion; it is intended that 60 million tonnes of the annual output will come from outside of Africa- hence the immediacy of plans to roll out on other continents.
The company already operates plants in Tanzania, Senegal, South Africa and Zambia; while work is under way on a $115 million cement plant in Cameroon, and a $4 billion plant in the Ivory Coast. In only February of this year Dangote opened Nigeria’s largest ever cement plant, at Ibese, – at a cost of $1 billion – which boosted Dangote’s total cement output in Nigeria by 40 percent.
Asked by interviewers for the rationale behind an inter-continental roll out rather than utilizing his significant market dominance on the African continent by continuing expansion across Africa, Dangote explained that the need to globalise came from the limitations of the African market and infrastructure, saying: “the markets in Africa are limited in terms of cement production, though not in terms of other sectors.”
He added that opportunities abroad are available now, and may not be in the future, thus it is important to take risks and not lose out on the potential successes of immediate expansion.
This latest news comes only months after Dangote announced that the company would be listed on the London Stock Exchange next year, in another step towards global expansion. The company will float a 20 percent stake on the London Stock Exchange, with Dangote hoping to see the sales raise to $35 billion to $40 billion.
Currently boasting a market cap of 2.1 trillion naira ($13 billion; Bloomberg, 2012), realisation of a $40 billion share sale in London would rocket Dangote Cement way above main rival Lafarge, which claims a market cap of approximately $11 billion, but last year achieved revenues over 13 times’ that of Dangote.
By; Gabriella Mulligan