Dangote Cement Plc has signed a contract to expand its Ibese plant, said Joseph Makoju, chief operating officer. The expansion will double output at the 6Mta plant in southwestern Nigeria.
Signing the agreement early helped Dangote get “a good price for the construction for almost half of the price,” Makoju said, without specifying the cost of the project or saying with whom the contract was signed. Construction will be completed in three years, he added later at a meeting with investors.
The cement producer decided to start construction early to help meet demand for cement in Nigeria, Makoju said. Demand for cement in Nigeria, sub-Saharan Africa’s second-biggest economy and the continent’s most populous nation, may rise 45% in 2011, Stanbic IBTC Bank Plc said in a report in a report last year.
The company said in April that its total capacity should reach 50Mta in five years. The company may build one production line with a capacity for 10Mta instead of two lines producing 6Mta because “unit investment will be cheaper than two lines doing 6Mta,” Makoju said.
Dangote Cement is the biggest company traded on the Nigerian Stock Exchange with a market value of NGN1.63trn. The company’s parent, Dangote Industries Ltd, has a 64% stake in Sephaku Holdings Ltd, a South African mineral exploration and development company that also produces cement.