Monday, 3 June 2013

Why We Are Investing $500m In Tanzania—Dangote

Aliko Dangote
The Prime Minister of Tanzania Mizengo Pinda has commended the Dangote Cement Plc and explained why the Africa’s king of cement is investing $500million in his country.

Mr. Pinda who was speaking during the groundbreaking ceremony of the Dangote’s Mtwara Factory in Tanzania said the investment was sequel to invitation of the Dangote Group by his country after it was discovered that Tanzania has the resources it takes to produce cement.

Commending the President of the Dangote Group Aliko Dangote, Mr. Pinda said the new plant will without doubt lift the economy of his country and Africa at large.

He thanked the conglomerate for locating the three million metric tons plant in his country. He said the commencement of the construction of the plant signaled the beginning of a new business relationship between Nigeria and his country.

The Tanzania PM described as an irony, that prior to the coming of Dangote cement, in spite of the abundance of limestone, a necessary raw material in cement manufacture in Mtwara, Tanzania was experiencing a deficit in cement production and supply.

He said: “We could not bring in Cement Plants with capacities to produce cement in large quantities, so that demand of cement would be met. Growing demand for cement with inadequate supply led to deficit and high prices.

“While this was becoming a growing concern to the Government, we came to know about the availability of Cement Grade Limestone in huge quantities in this village in Mtwara. But this was a challenge for us, as Mtwara is quite far from the market of cement, which is mainly in the cities.”

In his address, Aliko Dangote said the construction of the facility was a familiar turf for his company as it has done same in other parts of Africa. He therefore expressed hope that the new investment will strengthen the ties between Nigeria and Tanzania, adding that Africa was gradually taking its destiny in its own hands.

The investment in this sector, which he explained as being outside the traditional mining sector, is to take advantage of the abundance of limestone in the country and work towards making Tanzania self-sufficient in cement production.

He commended the government and people of Tanzania for recent public sector and banking reforms, as well as revamped and new legislative frameworks, which had spurred private sector driven investment.

“We are excited for two major reasons. The first being that today’s event is a significant milestone for us in our quest to build a Pan Africa cement company. We are excited that an African company is making this investment in a sister African country. This indeed, shows that Africa is gradually taking its destiny in its own hands rather than wait for investors from outside Africa,” he said.

Meanwhile, Dangote Flour Mills Plc, in its financial statement for the full year ended December 31, 2012, posted a loss of N2.19 billion as against N925.94 million profit it made for the 2011 financial year.

In its audited full year results made available to the investing public last weekend, the flour milling company, had pulled a revenue of N58.67 billion last year, 11 per cent lower than the N66.28 billion revenue it made in 2011.

The company’s profitability for the year was affected by an increased cost of sales which took 91 per cent of its revenue, compared to the 84 per cent which it took in 2012. Its cost of sales had however dropped by five per cent from N56.19 billion in 2011 to N53.39 billion, while distribution, administrative and other expenses cost the company N5.43 billion compared to the N6.02 billion which was spent the previous year.

The company’s total current assets stood at N31.77 b illion, 18 per cent lower than what it was at the end of the 2011 financial year, just as total non-current assets dropped by four per cent to N45.67 billion from N47.78 billion.

Source: Leadership

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