Dangote Obajana Cement Plant surpasses expectations

Members of the House of Representatives Committee on local Content who were on tour of the huge Cement Plant in Kogi State on Wednesday visited Dangote Cement Plant, Obajana.

The  lawmakers  disclosed that  the Dangote Cement plant at Obajana surpassed their expectations on adherence to Local Content, adding that they were shocked by the facility at the factory, describing the factory as a must see plant for all Nigerians”.

The Representatives members were apparently surprised by the 13.25million metric ton cement plant capacity which they described as shocking.

Speaking on behalf of the 15 lawmakers who visited the plant, the chairman of the committee Emmanuel Ekon said: “My view about Obajana Cement Plant is a little shocking; shocking in the sense that what we saw on ground actually surpassed expectations.” , adding  that Obajana Cement Plant “is a must see plant for every Nigerian.This was a great vision that has materialized into reality. How we wish other very wealthy Nigerians can emulate  Aliko Dangote.”

Also,  in his contributio , Deputy Chairman of the Committee,  Suleiman Yahyah Kwande said: “We are very impressed with what we saw on ground. I wish we have more investors like  Aliko Dangote. ‘I think if the IOCs can take a cue from Dangote’s charity and CSR works, there would be peace in the Niger Delta.”

They posited that Dangote Cement has adhered to the Local Content policy, and has even gone ahead to train Nigerian young engineers at its Dangote Academy.

In his response , Plant Director of the Dangote Cement Obajana JV Gungune said the capacity of the plant will soon be upgraded, assuring that more jobs will be created for Nigerians.

The law makers are billed to visit other plants of Dangote Group in some parts of the country.

Dangote Cement Plc’s margins have improved the most in two years, signaling the decision of management to switch to a cheaper source of energy has yielded fruit.

Dangote Cement now uses coal to the power plant at factory, a cheaper source of energy compared to Low Pour Fuel Oil (LPFO). The strategic decision led to cost savings and improved margins.

The largest producer of the building materials in Africa’s most populous nation and largest economy recorded a 63.16 percent Year on Year (y/y) surge in gross margin to N343.16 billion as at September 2017.

  In short, on a quarter on quarter basis, gross margins spiked by 90 percent, the highest since the second quarter of 2015.

  Gross profit margin increased to 56.47 percent (y/y) in September 2017 as against 47.15 percent as at September 2016.

  For the first time since 2016, the company’s cost margins improved. Recall that an economic downturn had undermined production cost as rising inflation and a shortage of dollars impacted negatively on the firm’s input costs.

Cost of sales ratio, fell to 43.05 percent in the period under review as against 52.01 percent the previous year, thanks to investment in the alternative energy mix.

This means the firm has spent less on input cost in producing each unit of product.

It must be noted that the flexibility in the foreign exchange market as evidenced by increased dollar supply has been a boon to Dangote Cement.

“Elsewhere, we observed signs of life from the business’ energy flexibility investment with input cost decelerating faster than volumes in Q3 17,” said analysts at ARM Research Limited.