Dangote Cement Plc has said it would start 100 per cent coal production in September 2016,  in an attempt to overcome the shortage of gas supply in the country and reducing the challenging of foreign exchange paid on gas.

The chief executive officer of Dangote Cement, Onne Van der Weijde, made this known at the company’s fact-behind-the-figures presentation on the Nigerian Stock exchange (NSE) in Lagos, yesterday.

Weijde said the company has decided three years ago to diversify and de-risk fuel supplies and go into coal production, saying the coal mills would be in operation by end of September 2016.

He added that the some of the company’s plant in Obajana in Kogi State and Ibese in Ogun State were already using locally-purchased coal for operation, blending with imported coal to assure optimal quality.

“We will begin mining our own coal at Ankpa in Kogi State in fourth quarter,” he said.

He pointed out that coal would transform profitability of Gboko plant which was previously on 100 per cent LPFO.

He added that klin fuel was the major cost of cement production, saying that group’s margins were affected by mix of fuel in Nigerian klins.

He explained that disruption and maintenance have led to shortages of gas since 2014, thus affecting margins.

He pointed out that locally- bought or mined coal would be priced in naira reducing the challenging of foreign exchange paid on gas.

According to him, switching to coal would improve margins versus using LPFO, improve fuel security, eliminate shutdown as 100 per cent coal use would  be possible across all lines, reduce foreign exchange needed  for imported fuel.

Speaking on the outlook for the remaining part of the year for the company, the CEO said strong volume growth  was  expected, as Ghana would  import more cement from Nigeria, adding that they  were focusing on protection of margins in Nigeria, more coal facilities in Nigeria coming onstream and to export more cement to ECOWAS countries.

He noted that Congo plant was set for operation in October, while Sierra Leone plant would be  expected ready by October 2016.

Also the CEO of NSE, Oscar Onyema, said that  Dangote Cement remains a dominant player in the industrial goods sector on the NSE.


Chris Kehinde Nwandu is the Editor In Chief of CKNNEWS || He is a Law graduate and an Alumnus of Lagos State University, Lead City University Ibadan and Nigerian Institute Of Journalism || With over 2 decades practice in Journalism, PR and Advertising, he is a member of several Professional bodies within and outside Nigeria || Member: Institute Of Chartered Arbitrators ( UK ) || Member : Institute of Chartered Mediators And Conciliation || Member : Nigerian Institute Of Public Relations || Member : Advertising Practitioners Council of Nigeria || Fellow : Institute of Personality Development And Customer Relationship Management || Member and Chairman Board Of Trustees: Guild Of Professional Bloggers of Nigeria

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