By Franklin Alli
LOCAL cement manufacturers have reduced power costs and boosted operating profits and capacity utilisation over the last nine months through investments in coal energy.
The nation’s two top cement producers, Dangote Cement Plc and Lafarge Africa Plc, in their financial results for the nine months ended September 30, 2017, attributed rise in their profit margins and capacity utilisation to the use of coal.
Dangote Cement switched to using coal at its cement plants in response to disruption to gas supplies and to lower input costs. The cement producer uses 12,000 MT/day of coal. On the other hand, Ashaka Cement, a fully-owned subsidiary of Lafarge Africa, said coal accounted for 82 percent of its power usage over the period, while work is ongoing on its 16-megawatt lignite-fired coal power plant at its factory in Gombe State.
Analysis of Dangote Cement results in the nine months under review showed that the company maintained its position in the Nigerian domestic cement market, accounting for 65 per cent of the market volume, while other African plants’ volumes went up by 7.5 per cent to 7.0 million metric tonnes per annum (mmt/a.)
Outgoing Chief Executive Officer, Dangote Cement, Onne van der Weijde, said the company’s pan-African operations were performing strongly with excellent sales growth in Cameroon, Ethiopia and Senegal, adding, “We are consolidating our success across Africa and have just inaugurated our1.5 million metric tonnes per annum factory in Congo, the 10th country in which we have established operations. In our key operations in Nigeria, we have significantly improved our fuel mix and this has helped increase margins across the group. It is especially good for Nigeria because most of the coal we are using is mined in our own country.”
According to him, the 1.5 million metric tonnes per annum clinker grinding facility in Douala Cameroon sold approximately 938 clinker tonnes of cement, indicating an increase of 16.4 per cent on the 806 clinker tonnes sold the same period in 2016.
“Dangote Cement Ethiopia also increased sales by 16.8 per cent to nearly 1.7mmt/a in the first nine months of 2017 representing capacity utilisation of approximately 88 per cent while the cement plant in Pout Senegal sold 1.0mmt/a of cement in the period.”
Similarly, for the 9-month period ended in September 2017, Lafarge Africa reported a four-fold increase in operating margins.
Edith Onwuchekwa, Chairman of AshakaCem, stated: “The erection of a 16 megawatts coal fired captive power plant at Ashaka is nearing completion and will significantly ensure the stability of electric power to the plant and the optimization of our energy costs at the plant.”