Dangote Cement signs $1.85bn expansion financing arrangements with banks

Dangote Cement Plc, on Tuesday signed a $1. 85bn seven-years syndicated credit facility for the expansion project of its Obajana cement factory in Kogi state and another plant in Senegal.

At the well attended programme by gurus of industries from Nigeria and abroad, the company said the credit facility would be utilized for the acquisition of four new cement plants from Sinoma, a Chinese company. The finance for the project was raised by some local banks.over the years.

Speaking at the occasion, the company president and chief executive officer, Alhaji Aliko Dangote said the signing agreements with some local banks was significant for the company and the country, because by the time the company concluded the installations of its facilities, it would enhance the production of cement in excess in Nigeria and eventual reduction of its price.

According to the company, the new plants to be installed will compliment its existing Obajana and Benue facilities which are being upgraded. Also, it was said that apart from the plant to be installed in Obajana and Benue, two new ‘Greenfield plants’ will be built at Sagamu and Ibese all in Ogun State, while the fourth plant will be built close to Dakar in Senegal.

Obajana cement, according to Alhaji Dangote has two production lines with the capacity to produce five millions tons of cement per annum presently and with the proposed extension, the factory would expand its capacity to six million tons by 2009 and by 2010 would almost be doubled.

He added that with the additional capacity the company would provide the country with 26 million tons of manufactured cement and 2.5million tons in Senegal by 2010.

He said “Dangote Cement already operates Sub-Saharan Africa’s largest cement plant at Obajana and these new plants and lines will make us the largest producer on the continent. Africa is going through a construction boom as it seeks to address housing and infrastructure deficits that have been pervasive for too long. Dangote Cement is acting to address the shortfall in African production and provide the building blocks for Africa’s renaissance.

“For the new seven cement lines, we have raised US $1.28 bn from the local capital markets and the group has provided equity of about $600 million. Many of the financiers of the deal are here today, I thank them for their support.”

He said each of the new plant will be operational within next 28 months and this will make the country a self sufficient in cement production and also becomes a net exporter. Representatives of the banks that raised the finance at the occasion in Lagos commended the efforts of the company, especially its CEO, Alhaji Dangote for contributing its quota to the economic development of the nation.–Vanguard