Obajana Cement’s New Production Lines To Gulp $1.6b
 18th MAY 2007

By Franklin Alli

Obajana Cement PLC’s new production lines 3rd and 4th will gulp about $1.6 billion, according to the company’s Chairman / President of Dangote Group, Alhaji Aliko Dangote.
The Obajana cement factory was conceived by Dangote to meet the entire cement need of the country, and so reduce the price of cement in Nigerian market. With two production lines, each of 2.5 million tonnes a year, the factory alone it is expected, will be supplying about 50 per cent of the total cement needed in the country.

And when the productive capacity of Obajana is doubled as planned within one year of operation, the factory would have a total cement output of 10 million tonnes a year, with an additional five million tonnes per annum produced by Benue Cement Company, Ibeshe 3 million tonnes, the group alone will be meeting more than 100 per cent of the cement requirement of the country.
However, the just completed and commissioned lines 1 and 2 of the factory, was built at the cost of $1.2 billion.  

Dangote said the fund was syndicated by a consortium of twelve local banks (Afribank, etb, UBA, First Bank, Access Bank, FCMB, Zenith Bank, Oceanic Bank, GT Bank, Skye Bank, Fidelity Bank and Intercontinental Bank PLC, including development finance institutions, (FMO, IFC, African Merchant Bank, and European Investment Bank), and that a fresh $1.6 billion is needed to develop the 3rd and 4th lines.
He explained that of the $1.2 billion syndicated by creditors to construct the first and second lines of the cement factory, the international finance institutions committed $330 million, the consortium of local banks provided a facility of $150 million, and the Dangote Group contributed more than $500 million from its internally generated revenue.

“With our plan to launch additional 10 million tonnes, it would move Nigeria from two and a half million to 23 million tonnes in 2010.  Based on this, I can guarantee you that between now and 2010, the price of cement will fall.  I don’t see why we should not sell our cement at below N1, 000 from the current N1, 130.  By June, the price will crash.  We have agreed to invest $1.6 billion more to be able to achieve this figure, through additional 10 million tonnes,” he stated.

His words: “We believe that undertaking this project has benefited the whole of the country by breaking new grounds in many areas of the economy.  It will save the economy at least $460 million annually in cement imports and generate at least 10,000 jobs in the host community directly from the cement plant and the ancillary industries. We commissioned the best equipment manufactured in the world to build the plant and hired the best brains to make the project a reality.” he said.

The out-going President, Chief Olusegun Obasanjo, who commissioned the production lines 1 and 2, and also laid the foundation ceremony for the 3rd and 4th lines, said “We are celebrating 4Fs now.  We are celebrating Dangote’s foresight, forthrightness, fortitude, and fortune. I thank Aliko for all these qualities he has shown.  I thank all the projects financiers for believing in the project and the economy.”   Based on Dangote’s track records in his businesses drive, Mr. President said “I have ordered the BPE to sell Federal Government’s shares in Onigbolo cement factory in Republic of Benin to Dangote.

“Dangote would have to sign an MOU with the government.  The MOU will see Dangote stake $3 million dollars in a bank with a commitment to build a 5,000 MW power plant, another deposit of $20 million with a commitment to build a refinery and an additional $10 million for a fertiliser plant,” he hinted.
Source: vanguard.

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