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.
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