Obajana Cement PLC’s new production lines 3rd and 4th will require about US$1.6bn, according to the company’s Chairman / President of Dangote Group, Alhaji Aliko Dangote. The recently completed and commissioned lines 1 and 2 of the factory were built at the cost of US$1.2bn.
The Obajana cement factory was conceived by Dangote to meet the entire cement need of the country, and so reduce the price of cement in Nigerian market. With two production lines, each of 2.5Mta, the factory alone it is expected, will be supplying about 50 per cent of the total cement needed in the country.
And when the productive capacity of Obajana is doubled as planned within one year of operation, the factory would have a total cement output of 10Mta, with an additional 5Mta produced by Benue Cement Company, Ibeshe 3Mt, the group alone will be meeting more than 100 per cent of the cement requirement of the country.
Dangote said the fund was syndicated by a consortium of 12 local banks (Afribank, etb, UBA, First Bank, Access Bank, FCMB, Zenith Bank, Oceanic Bank, GT Bank, Skye Bank , Fidelity Bank and Intercontinental Bank PLC, including development finance institutions, (FMO, IFC, African Merchant Bank, and European Investment Bank), and that a fres US$1.6bn is needed to develop the 3rd and 4th lines.
He explained that of the US$1.2bn syndicated by creditors to construct the first and second lines of the cement factory, the international finance institutions committed US$330m, the consortium of local banks provided a facility of US$150m, and the Dangote Group contributed more than US$500m from its internally generated revenue.
“With our plan to launch additional 10Mt, it would move Nigeria from two and a half million to 23Mt in 2010. Based on this, I
can guarantee you that between now and 2010, the price of cement will fall. I don’t see why we should not sell our cement at below N1,000 from the current N1,130. By June, the price will crash. We have agreed to invest US$1.6bn more to be able to achieve this figure, through additional 10Mt,” he stated.
His words: “We believe that undertaking this project has benefitted the whole of the country by breaking new grounds in many areas of the economy. It will save the economy at least US$460m annually in cement imports and generate at least 10,000 jobs in the host community directly from the cement plant and the ancillary industries. We commissioned the best equipment manufactured in the world to build the plant and hired the best brains to make the project a reality.” he said.
The out-going President, Chief Olusegun Obasanjo, who commissioned the production lines 1 and 2, and also laid the foundation ceremony for the 3rd and 4th lines, said “We are celebrating 4Fs now. We are celebrating Dangote’s foresight, forthrightness, fortitude, and fortune. I thank Aliko for all these qualities he has shown. I thank all the projects financiers
for believing in the project and the economy.” Based on Dangote’s track records in his businesses drive, Mr. President said “ I have ordered the BPE to sell Federal Government’s shares in Onigbolo cement factory in Republic of Benin to Dangote.