The Nation Newspaper

Tag: Africa

  • Dangote: Upping the ante in Africa’s cement market

    Dangote: Upping the ante in Africa’s cement market

    Dangote has opened its $300 million (about N60 billion) cement plant in Dakar, Senegal. The plant, which runs on cutting-edge technology and innovation, produces the high varity 42.5 cement brand, reports Assistant Editor Okwy Iroegbu-Chikezie.

    With the opening of Dangote cement plant in Dakar, Senegal, competition in the market in Africa has become keen. The $300 million (about N60 billion) plant is backed by superior technology and innovation to deliver quality cement.

    “Our edge is the technology we have brought to bear on cement production and the wealth we are creating across the board for the people and government of Senegal,” the Country Head of Dangote Cement, Senegal, Mr. Luk Haelterman, said, at the inauguration, last week, of the 4, 000 Metric Tons (MT) per day plant in Pout District of Senegal, about 75 kilometres East of Dakar, the country’s capital.

    In his welcome address Haelterman said Dangote Cement offered the best choice for consumers, as it is the only 42.5 grade high quality cement available in the country’s  market.

    He said the firm’s coming would boost the housing sub sector, noting that the plant with a production capacity of 1.5 million tons yearly would create more than 5, 000 jobs. Firm’s emergence, he added, has altered the equation in  cement market. Haelterman was right. Until Dangote  hit the market with its superior 42.5 grade cement, the market in Senegal was dominated by Sococim, a French cement company founded in 1948, and CDS. However, while the two firms are producing the 32.5 grade cement,  Dangote introduced the higher quality 42.5 cement grade that allows for quicker drying for construction professionals. “Today, Dangote has become the biggest and best because we remain the only company producing the 42.5R, which is better than what we met on ground, which is the 32.5R”, Haelterman said.

    The quality of cement introduced into the market by Dangote is not the only game changer. Despite coming into an already saturated market, the company also came in with the lowest price in the continent, approximately $5 a bag. With a combination of Damgote’s marketing edge in superior quality and pricing, experts say that the continent’s cement landscape is poised for a major positive change-one that would bring immense benefits to all stakeholders.

    Already, Dangote Cement, The Nation learnt, is targeting the exportation of the product to Mali to the tune of two million tonne, while sales of the product in other neighbouring countries are currently being worked out.

    An exporter,  Mr. Serigne Aramine Mbacke, confirmed this much when he disclosed that he distributes about 40 per cent of Dangote Cement to Mali, Gambia, Code de Voire, Cape Verde and Guinea Bissau. He said he was motivated to distribute the company’s product because of its quality and profit margin. He also said that with the massive investment, which is the single largest in the Franco-phone country by an African, Dangote has made inroads into several African countries, bringing cohesion in the process. While noting that the state-of-the-art cement plant offers huge employment opportunities for Senegal’s estimated 14 million population, he commended the Senegalese Government for being open to investment that is mutually beneficial.

    A Dangote Cement distributor, Mr. Momodu Ndioye could not hide his excitement over the prospects of high profit margin. He told The Nation in Dakar that the quality of Dangote cement is better than others. Hear him: “My customers have confirmed that the quality of the new entrant into the cement market is better than others. They can mould more blocks with Dangote cement and also make more money because it dries faster. This translates to more profit for us distributors.” Another distributor, Mr. Ibrahim Dirkhabi also confirmed this, noting that because of its quality, the Dangote cement dries faster and makes

    stronger blocks. “It is the toast of builders and others in the construction industry,” he said.

    Apart from superior technology, innovation, and pricing, there are other factors that position Dangote Cement to play a leading role in the continent’s competitive cement sector. For instance, as Chief Operating Officer of the company, Mr. Athanasios Bampos disclosed, Dangote Cement boasts a limestone deposit that can last for 150 years.

    The location of the factory is not only rich in limestone, but also in clay and laterite, which are the major components needed in cement manufacturing. ‘’The only component that we import as a company is gypsum, sold by ICS Chemical Company, a local firm, which is about 45 kilometres from the factory,’’ he added.

    That is not all. The company, according to Bampos, also has captive electricity that produces 30 Megawatts of electricity through the exploitation of coal, the first in the country. He explained that the factory has two production lines though they are using one line for now. “We have 3.6 kilometre conveyor belt, three parking bay and a railway about 1.5 kilometres from the factory. We will not have to contend with the problem of transportation and other logistic problems that have to do with transporting our products to destinations where our customers are located, he added.

    In his presentation, the Company’s Director of Sales and Marketing, Mr. Serigne M. Dieng said that Senegal, with 14 million people and a growing Gross Domestic Product (GDP) of +4 per cent as at 2013 hasm cement market of three MT pa and consumption rate of 230kg. He expressed satisfaction that Dangote Cement has been accepted immediately it got to the market because of the aggressive awareness strategy embarked upon by the company to introduce the 42.5 grade, which was not known to the majority of customers except a few corporate customers.

    An obviously elated Director of Mines and Geology for Senegal, Mr. Ousmane Cisse, said the $300million factory remains the biggest investment in his country in the last 15 years. He said the massive investment has changed the economy of his country for good. He noted that the company had met all the requirements on key issues of environmental sustainability, good business practice and compliance with regulations, adding that the Senegalese Government, on its part, had responded by offering tax holiday and other incentives to the company. He also promised that the Senegalese Government would protect the company to achieve its optimal production capacity.

    While stating that the Government of the Republic of Senegal was happy with Dangote as the single largest investor in the country, Mr. Cisse urged other African entrepreneurs to emulate the business acumen of

    Dangote. Nigerian Ambassador to Senegal, Mrs Katyen Jackden also commended the management of Dangote Cement for its pan-African posture in investment and the host government for its support to the firm. She explained that Dangote has through his investments in African countries built bridges of friendship across nations, fostering unity and integration among African countries.

    She said Dangote Cement has done Nigeria proud with the commencement of production and that she was happy that the cement giant was instantly accepted in the market based on its high quality product and competitive pricing.

    Mrs Jackden said: “Dangote Cement needs all encouragement needed to flourish and my office would be willing to help in that regard because Dangote has proven a worthy Nigerian ambassador in business.” She also thanked the people and government of the French-speaking West African country for the support and opportunity given to a foreign investor like Dangote, stressing that ‘’Dangote has been able to bring cohesion among African nations with his investments.’’

  • ‘How to grow air transport in Africa’

    Aviation experts in Africa have said for air transport to grow in the continent, African states must implement the Yamoussoukro Decision (YD), which is seeking the opening up of the continent’s airspace for African airlines.

    The air transport declaration was initiated in 1998 and ratified by countries in the region in 1999 in Yamoussoukro, Ivory Coast.

    The experts – Chief Executive Officer of African Aviation Services Limited, Mr Nick Fadugba and Chief Executive Officer of Ethiopian Airlines, Mr Tewolde Gabremariam, who spoke with The Nation, argued that the continent’s aviation sector will not grow until the accord in implemented .

    They agreed that African airlines have to work together, stressing that this would be enhanced by the open skies treaty in order to curb the incursion of non-African mega carriers.

    According to them, Gulf states- United Arab Emirates (UAE) carriers,  European and the United States  carriers currently have 80 per cent of the market while African airlines only have 20 per cent of the traffic in African region.

    They lamented that many African countries have refused to implement this agreement. Only 11 out of 54 counties that make up the continent have complied with its implementation.

    Fadugba said African governments must open the skies for indigenous airlines to gain market access and free entry and exit.

    “We wish African governments will create the enabling environment for African airlines to flourish. The European Union (EU) opened the continent’s skies for European airlines; the African Union (AU) should do the same for African carriers. In other continents of the world, there is vibrant air transport industry, except in Africa,” he said.

    Gebremariam dismissed as baseless, fears by some airlines in the region that opening the skies will enable established African carriers to stifle newly established airlines. He described it as perceived fears instead of real ones, noting that today, non-African airlines have 80 per cent of the traffic of the intercontinental air travel from the continent, lamenting that the region gains nothing from the domination of these mega carriers.

    He said if African airlines are empowered, it would be a catalyst for the economic development of the continent as it will help create thousands of jobs and enhance movement of people from one part of the continent to the other.

    He said: “Twenty years ago, the combined African airlines market was more than 60 per cent of the intercontinental traffic between Africa and the rest of the world.

    “Back then, there were airlines as big as Air Afrique, Ghana Airways, Nigeria Airways, the Democratic Republic of Congo (DRC) owned airline. The DRC today doesn’t have an airline, but the DRC then had an airline operating more than 30 jet airplanes. They all died because there was no support from their governments. They were not able to fly to their neighbouring countries as much as they did at that time.”

     

  • Sameer Africa seeks new markets in Kenya

    Sameer Africa Ltd. plans to enter Rwanda in the next two years and is exploring the possibility of setting up a subsidiary in Nigeria as the Kenyan tiremaker offsets widening competition in its domestic market.

    Sameer wants to add to the 11 countries elsewhere in Africa where it sells products, Chief Executive Officer Allan Walmsley said in an interview Friday at company headquarters in the capital, Nairobi.

    “We are taking a very big interest in Rwanda despite the market being small,” Walmsley said Friday. “What we are seeing is good governance, and we are seeing the GDP growth of the country being sustainable.” Executives recently visited Nigeria to evaluate the “massive market” and its “very many challenges.”

    Sameer had a net loss in 2014 of 66.9 million shillings ($726,000) compared with year-earlier profit of 401.2 million shillings, as revenue dropped 13 per cent to 936.5 million shillings, the company has said. Earnings were hurt by “ever-increasing competition from subsidised tires imported from the East” as well as by civil or political unrest or currency shortages in some export markets, it said.

    The shares declined nine percent to 5.65 shillings, the biggest two-day decline since August 8. The company is valued at 1.57 billion shillings.

    The manufacturer is among Kenyan companies asking the government to impose a countervailing duty on products imported from China, though a tariff may be difficult to implement because of East Africa Community trade-bloc rules requiring coordinated policies with neighboring countries, Walmsley said.

    “Unfair competition” has caused Sameer Africa’s market share in Kenya to shrink to 16 percent from 54 percent, he said.

    China overtook India to become Kenya’s top source of imported goods at 14.8 percent of the total value in the first nine months of 2014, according to data from the Kenya National Bureau of Statistics.

    The tiremaker said in July that it’s in negotiations to sell a stake in its manufacturing unit to an unidentified Asian investor.

    “Talks are ongoing,” and included a meeting in Dubai a week ago, though there’s no timeframe for a deal, Walmsley said. “We are not looking for a technical partner alone but one who also will contribute equity” to a possible 50-50 partnership, he said.

  • Expert alerts on African swine fever outbreak

    The Dean, Faculty of Agriculture, University of Ilorin, ProfAbiodun Adeloye, has  warned  feed manufacturers and pork producers of the possible outbreak of African swine fever.

    He said the precarious  weather condition is creating an environment for deadly diseases to  invade the industry, calling for quick action and monitoring for possible traces of strange and common  animal diseases, after  the  recent  attack of  bird  flu  on some  poultry farms inthe country.

    With African swine fever  recorded on pig farms  in  some  parts  of Europe,  the expert called on  health  authorities, especially  those  at the  borders, to take  steps to keep  deadly diseases from crossing into the country.

    According to him, national-level health staff should be charged with supervising and coordinating efforts to contain the disease.

    Given the ease with which transmission between animals occur, he urged the government to implement safeguards to ensure that wild boars, the source of African swine fever, donot come into contact with pigs slaughtered for meat.

    He also suggested double fencing to keep wild animals out, proper disposal of food and pig feed and contacting a local veterinarian in case a dead boar is discovered in the wild.

    In addition, he said facilities that cannot secure the observance of veterinary and sanitary rules cannot be used for rearing pigs.

    He called on the  government  to adopt additional measures to contain and prevent the spread of African swine fever and other animal diseases.

    He pointed out the need to raise the awareness among Nigerians about African swine fever and other dangerous animal diseases.

    Last  year, Adeloye alerted on the need for poultry producers and feed manufacturers  to  prepare  for  possible  outbreak on bird  flu.

    Subsequently, the industry was attacked, as smany birds contracted the virus. As a  result of the  highly contagious and dangerous pathogen, the poultry  was  in a state of flux.

    Since then, scientists and researchers have been working to try and understand bird flu and develop a solution that will protect poultry flocks. However, that still seems to be a long way off and new cases seem to be occurring.

    To better manage the issue, he said health authorities should  take the necessary steps to prevent occurrence  of the disease.

  • Airtel unveils 7979 Ebola shortcode for Africa

    Following its partnership with the African Union (AU) Commission on the fight against Ebola in West Africa,   Airtel Nigeria has dedicated new SMS short-code, 7979, to raise funds and drive awareness for the initiative.

    The initiative, operating under the hash tag ‘#AfricaAgainstEbola’, will use the 7979 dedicated platform to raise funds for the deployment of African health workers to affected countries.

    To support the initiative, Airtel customers are encouraged to send ‘StopEbola’ as an SMS and as a single word to the short-code, 7979 at N100 (One Hundred Naira) per SMS. All monies realised from the SMS campaign will be donated totally to the AU Fund set up to kick Ebola out of Africa.

    Thus far, Ebola has claimed over 9,637 lives across some parts of West Africa since it was first reported in Guinea in December 2013. According to the World Health Organisation (WHO), this is the largest outbreak on the continent, affecting mostly Guinea, Liberia, and Sierra Leone.

    Chief Executive Officer and Managing Director of Airtel Nigeria, Segun Ogunsanya, said Airtel Nigeria is committed to the partnership with the African Union on the initiative as this is in sync with the company’s CSR strategy of touching and saving lives.

    According to him, “as a major stakeholder with operations in 17 African countries, we are intensely interested in the communities and people we serve just as we are passionate about creating platforms to uplift the less privileged. This partnership with AU provides a fine opportunity for all of us at Airtel Nigeria to join in kicking Ebola out of Africa”.

    Mr. Ogunsanya had also donated mobile phones, sim cards and airtime to all the 290 Nigerian doctors, nurses and other care-givers, who have volunteered to join the fight against Ebola.

    He urged other private sector organisations to join the telecommunication operators in the effort to raise funds and awareness for the fight against Ebola, which has brought grief to many families in West Africa.

  • ICC Africa Under 19: Nigeria finishes fifth, escapes relegation

    The Nigerian team to the ICC Africa Under 19 Championship in Dar-es- Salaam, Tanzania escaped relegation after finishing fifth in the six-team event, winning two out of the five games it played.

    According to Tanzaniacricket.com, the Nigerian team lost the first and second game by seven wickets and 164 runs to Kenya and Namibia respectively before beating Uganda in the third game by 23 runs. In the fourth game, the Nigerian team lost by three wickets to host Tanzania, but dispatched Botswana by nine runs in the final game.

    In the final standing released by the host, Namibia finished first with four wins, one defeat and eight points, Uganda finished second with three victories, two losses and six points, Kenya had the same number of victories as Uganda, but had fewer runs. Tanzania and Nigeria ended with same number of wins, but Tanzania edged Nigeria to fifth place with fewer runs. Botswana finished last with one victory from five games

    Coach of the team, Tamuno John told SportingLife after arriving in the country that the players did their best, but lacked the necessary experience at exposure to do well at a championship of that magnitude. He said 12 of the players were tasting international competition for the first time and the tour of Dubai, which was cancelled, could have given the players a taste of what to expect in Tanzania.

    “I believe most of the players that we paraded did not have the experience and exposure to compete with the best because they were playing international cricket for the first time. We also played on turf as against the hard surface we play on in Nigeria. However, I must praise them for giving their best and hopefully they will become better players in future,” John added.

    John noted that the country needed to start an elite development camp programme aimed at training cricketers to the top level. “Some of the players we came up against are in various academies in their country where they get quality training unlike here, where training for one month for major championships, which is very inadequate.”

    He expressed delight that the country escaped relegation and promised a better outing at the next edition.

  • Old Mutual spends bulk of Africa war chest on UAP stake in Kenya

    Old Mutual Plc (OML), which earmarked 4.3 billion rand ($374 million) for acquisitions in Africa, increased its stake in Kenya’s UAP Holdings Ltd., meaning that the insurer has now spent more than half of that war chest.

    Old Mutual, which is expanding in Africa to profit from the continent’s fastest-growing economies, will now hold 60.7 percent of UAP after purchasing a further 37.3 percent stake for $155.5 million in cash, the London-based insurer said in a statement Monday. The transaction takes its investment in UAP this month to $253 million.

    “The majority stake we have secured in UAP, combined with the existing Old Mutual businesses in Kenya, will provide the Group with the scale and product breadth to capitalize on the significant growth expected in the region.”

    In Kenya, East Africa’s largest economy, UAP has the third-biggest property and casualty market share, the second-ranked health insurance business, a large property investment portfolio and a fast-growing life insurance business, Old Mutual said. UAP also has operations in Uganda, Rwanda, Tanzania, South Sudan and the Democratic Republic of Congo. This deal follows Old Mutual’s acquisition of microfinance company Faulu Kenya DTM Ltd.

    “Following the conclusion of this transaction, we will have invested nearly $300 million in the region since 2012,” Ralph Mupita, chief executive officer of Old Mutual Emerging Markets, said in the statement.

    Old Mutual rose in Johannesburg trading, climbing one percent to 35.37 rand

  • Lafarge Africa to pay N1.85b to Ashakacem’s minority shareholders

    Lafarge Africa to pay N1.85b to Ashakacem’s minority shareholders

    Lafarge Africa Plc has set aside about N1.9 billion as cash payments for the minority shareholders of Ashaka Cement Plc as Lafarge Africa wraps up a mandatory tender offer (MTO) that seeks to absorb minority shareholders of Ashaka Cement in a cash and equity deal.

    The extended application period for the MTO closed last Friday. Custodian and other agents are expected to submit all acceptances within this week. The MTO is expected to be completed in February with the listing of the additional shares.

    Following the consolidation of Lafarge’s businesses in Nigeria and South Africa into Lafarge Africa, Lafarge Africa had acquired 58.61 per cent majority equity stake in Ashaka Cement. The majority equity stake was previously held by Lafarge Nigeria (UK) Limited. The acquisition was done through a block trade at the Nigerian Stock Exchange (NSE).

    Now, Lafarge Africa is seeking to acquire the remaining 41.39 per cent equity stake held by other shareholders in Ashakacem in furtherance of the consolidation of Lafarge’s businesses.

    A tender document obtained by The Nation showed that Lafarge Africa would be offering 57 ordinary shares of 50 kobo each in exchange for 202 ordinary shares of 50 kobo each of Ashakacem. In addition, Lafarge Africa will pay N2 for every acquired Ashakacem’s share.

    Minority shareholders hold 927.009 million ordinary shares of 50 kobo each in Ashakacem, representing 41.39 per cent of the cement company’s total outstanding shares.

    With this, Lafarge is expected to issue 261.58 million ordinary shares and pay additional cash consideration of N1.85 billion as equity and cash consideration for the take-over of the 41.39 per cent equity stake held by minority shareholders in Ashakacem.

    Sources in the know said there were early indications that the MTO would be successful citing initial filing reports and recommendations by several analysts. Several analysts had recommended the MTO as attractive based on the valuation of Lafarge Africa and Ashakacem. Both companies are quoted on the NSE.

    The management of Lafarge Africa confirmed this in an email response to The Nation’s enquiry. According to Lafarge Africa, the process of the MTO went very well with very good response from both retail and institutional investors. “A high number of shares has been tendered”, the management said while still in the process of collating the acceptances.

    An investment banking source said the MTO would lead to 100 per cent holding of Ashakacem by Lafarge pointing out that Lafarge could exercise its right under Section 146(2) of the Investments and Securities Act (ISA) to compulsorily acquire remnant shares belonging to the minority shareholders once its total shareholding crosses the 90 per cent threshold. The same provision was used to complete the 100 per cent acquisition of Oasis Insurance by FBN Insurance Limited.

    In the event of some remnant minority shareholdings, Lafarge Africa would have to transfer the cash consideration and equities for the remaining shares to the custody of the registrar to the MTO, City Securities (Registrars) Limited.

    The MTO was triggered by the transfer of 58.61 per cent majority equity stake in Ashaka Cement previously held by Lafarge Nigeria (UK) Limited. Section 131 of the Investment and Securities Act (ISA) and Rule 445 of SEC make it mandatory for any institution or person that acquires at least 30 per cent of a company to make an MTO to other minority shareholders.

    Lafarge had on July 9, 2014 received shareholders’ approval to consolidate its cement businesses in Nigeria and combine these with South African operations to create a leading sub-Saharan building materials giant to be known as Lafarge Africa Plc. The consolidation was done by transferring Lafarge’s assets in South Africa and Nigeria to Lafarge Cement Wapco Nigeria Plc.

    Under the transaction, Lafarge Group transferred its direct and indirect shareholdings in Lafarge South Africa Holding Limited of 72.4 per cent and its equity stakes in three other cement companies in Nigeria-United Cement Company of Nigeria Limited, 35 per cent, Ashaka Cement Plc, 58.61 per cent and Atlas Cement Company Limited, 100 per cent to Lafarge Wapco for a cash consideration of $200 million and the issuance of some 1.4 billion Lafarge Africa shares to the Lafarge Group.

  • Standard Chartered sees Africa future amid branch network review

    Standard Chartered Plc (STAN), the British bank that has operated in Africa for more than 150 years, said the continent remains part of its consumer banking plans even as the lender reviews its global branch network.

    While the lender is considering closing branches as more customers migrate to online and mobile transactions, it is still Standard Chartered’s “ambition to be the leading international retail bank within our footprint in Africa, Asia and the Middle East,” Diana Layfield, Africa chief executive officer for the London-based lender, said in an e-mailed response to questions on January 23.

    “With digital access comes a reduction in branch traffic, so it is only natural for us to review our current branches and optimise our digital platforms,” she said.

    Standard Chartered said last year it may close 80 to 100 out of more than 1,200 branches globally and said this January it will cut about 4,000 jobs at its consumer operations to restore the bank’s profit growth. It hasn’t said where the shutdowns or job reductions will be. The lender rebuffed at least one potential buyer of its African operations, according to two people with knowledge of the talks.

    “As this is an ongoing process, we are unable to provide a geographic breakdown at this stage,” Layfield said. “The realignment of our retail strategy is a global ambition to focus on cities that will experience significant economic growth in the future.”

    About 100 jobs are under threat at the lender’s Botswana unit, Botswana Bank Employees Union General Secretary Lebogang Keabetswe said last week.

    Standard Chartered has offices in 16 African countries and has been among the top three arrangers of syndicated loans in the sub-Saharan region since 2010, according to data compiled by Bloomberg.

    Operating profit at the Africa business fell 27 per cent to $209 million in the first six months of 2014 from the year-earlier period.

  • ‘Weak laws, others responsible for illegal movement of $50b from Africa’

    ‘Weak laws, others responsible for illegal movement of $50b from Africa’

    Weak legislation,lack of good policy frameworks and cohesion among African leaders, among others, have been identified as reasons for  inability to rid the continent of illicit financial flow estimated at $50billion yearly,  Action Aid, a international non –government organisation committed to the fight against poverty, has said.

    Illicit Financial Flow (IFF) in Africa is the fulcrum of a report which the former President of South African’s President, Thambo Mbeki submitted to the African Union (AU) few years ago, but yet to get the nod of the c6nt5nenbtal body.  Part of the report posted on the website of the United Nations Economic Commission for Africa (UNECA) said 60 per cent of the illicit financial flows coming out of Africa are aided by the multinational companies.

    Speaking on the sideline of a conference with the theme: High Level Meeting on illicit Financial Flows out of Africa in Lagos, its Manager Policy Advocacy and Campaign, Tunde Aremu, said there is no way illegal movement of funds out of Africa can be stopped in the absence  of effective legislations.

    Aremu said there are flaws in the laws made by the member countries, arguing that the development has prevented the stoppage of the criminal activity from one country to another.