Last week, Dangote Cement flagged off a N300million promo targeted at its customers all over the country in what industry watchers described as a way of giving back to the Nigerian people, writes Festus Akanbi
The history of cement business in Nigeria will not be complete without highlighting the contributions of key players, like Dangote Cement. It is no longer news that the man adjudged to be the richest man in Africa, Aliko Dangote took the greatest risks of his business life when he ventured into the business of cement production.
The risks has however paid off as the company has proved to be the investors’ delight on both the Nigerian capital market and also on the street as the distributors are making so much profits selling the company’s brand of cement. With a significant reduction in its price and its determination to continue with the production of the best available cement quality in the country, the company has no problem, maintaining its position as the one with the largest market share in the country. Sources claimed that Dangote Cement controls more than 65 per cent of cement business in Nigeria.
Giving Back to Consumers
Management of the company however last week said it is time for the customers across the country to also benefit from the cement company. Block moulders, and even those building houses also have the opportunity of getting compensated by Dangote Cement as it has commenced a N300 million promo that is targeted at 3,783 customers. The promo will run for three months and it is expected to daily produce two millionaires.
Two prizes of one million naira each will be won daily for 90 days by 180 lucky winners for the duration of the promo while a whopping N30 million will be won by a lucky winner every month.
Explaining details of the promo at the media launch, Dangote Group’s Chief Marketing Officer, Mr. Oare Ojeikere said: “To be part of the promo, all it requires is for the customer to buy a bag of cement and cut out the token at top right of bag. Five tokens will make one entry in the draw. Each entry of 5 tokens must be attached to a piece of paper with the participant’s name, phone number and address, placed in a sealed envelope and dropped off at a designated Drop Centre.”
He further revealed that 400 Dangote locations and all Access Bank branches nationwide, will function as Drop Centres for the entries.
Executive Director, Stakeholders and Corporate Communications, Eng. Mansur Ahmed described the promo as Dangote cement’s way of saying thank you to its teeming customers. He said though Dangote Cement remains the best in terms of quality and even pricing in the country, the company still felt so strongly that the customers ought to be appreciated for their love, support, encouragement and even patronage over the years.
Mansur said customers is key in the business and the love and respect the company has for its customers made it reduce its price and also increase its distribution depots across the country to ensure that the products are in all the nooks and crannies of the country.
He further assured the customers that the management of Dangote Cement will continue to look for new ways of enhancing their value as the level of acceptability of its products remains unprecedented in the history of Cement business in Nigeria.
Ojeikere said that Dangote has met all the basic requirements relating to the promo, adding that all the relevant regulatory agencies concerned on the promo have given their nod to start the promo.
No to Hoarding
His words: “On hoarding of cement supply, the possibility that that one will happen, I will say it’s quite slim because we are in a season where we sell right now maybe 100,000 or 200,000 metric tonne less than what we sell during the peak season.
Our peak season usually is in the dry months of March and April and early May. So, we are still 150,000 metric tonne less than we totally sell. So, if you try and hoard cement product, your neighbour will not hoard it and the smart move right now is actually the ability to sell because what we have done for our partners is that we pay them more for big volumes.
There is a big incentive for our partners to actually carry our cement products. So, I do not envisage any major cases of hoarding I doubt this very much.” On the fear of if the price of cement will increase, Ojeikere said: “I was in Port Harcourt on Sunday, cement sold for N1,380 per bag at N1, 380 which is almost N55 less than what we sell at ex depot price which I think is a good thing.
And that is the same story we see every day across the country. And today, there is more than enough cement for people to buy. There is no more motivation to hoard or to increase the price of cement. My advice is that if somebody tries to sell to you cement higher than N1, 400 or N1, 450 go somewhere else you will get it.”
Dangote Cement is Africa’s leading cement producer with three plants in Nigeria and recently opened factories in Ethiopia, Zambia, South Africa, Senegal and Cameroon. It is a fully integrated quarry-to-customer producer with production capacity of 29.25Mta in Nigeria.
Its Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines. The Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta. The Gboko plant in Benue state has 4Mta.
It would be recalled that the company for the nine months ended September 30, 2015 recorded a turnover of N365.5 billion, a 17.8 per cent increase over its corresponding year’s figure.
The company, in the same period exported 3.7 million metric tonnes of cement to neighboring countries. The export underscores the fact that Nigeria is now self-sufficient in cement production.
The Chief Executive of the company, Onne Van der Weijde while presenting the result said: “I am pleased to report that sales from outside Nigeria have contributed nearly 29 per cent of volumes so far this year and 39 per cent in the third quarter, which demonstrates that we are diversifying successfully and quickly gaining market shares in new countries.”
While revealing that the company has just acquired 2,000 new trucks to help improve its logistics capabilities and enable it enhance its export of cement to neighbouring countries, he said: “Our key target will be Ghana, where we already have an import terminal that is at present supplied from outside the ECOWAS region.”
The nine months unaudited results released on the floor of the Nigerian Stock Exchange (NSE) showed that the cement giants’ earnings per share rose by 18.6 percent to N9.80.
Profit before tax at N166.9 billion for the nine months ended 30th September 2015 represents an increase of 8.4 percent compared to N154 billion in the 2014 corresponding period.
A breakdown of the results indicated that the cement group posted an operating profit of N173.5 billion, 6.8 percent higher than N162.5 billion generated in 2014. Nigerian operations accounted for N162.7 billion, West & Central Africa N2.9 billion, while South & East Africa did N7.4 billion.
