Dangote Cement caters to West-Africa market needs
Africa Energy Series: Senegal speaks to Luk Haelterman, General Manager, Dangote Senegal
Based in Nigeria, Dangote Cement is the leading producer of cement in Africa with operations in 10 countries. Dangote Cement entered Senegal in 2007 with the goal of building a manufacturing unit in the country to take advantage of the geographical strategic location, a strong demand and abundant limestone deposits. The factory in Pout, 60 kilometers away from Dakar, holds a capacity of 1,5 million tons per year, producing higher quality cement than the market has been traditionally distributing.
Why is Senegal a strategic location for your operations?
Following strong development in Nigeria in different sectors, Dangote sought to increase employment across Africa. Many African countries are undergoing the second stage of their development, which includes an emphasis on construction, thus creating demand for cement. Senegal is the only West African country with large high-quality limestone deposits along the coast. Finally, local cement consumption is a lot higher than the sub-Saharan average: 250 kg per year per person in Senegal versus 100 kg per year per person in the rest of the continent. These factors combined made Senegal an excellent destination to implement a production unit in the region. Nevertheless, challenges arise. Senegal is producing more cement than it can use. Since 2010 – when we started building the factory – competitors increased their production, leading to overcapacity. Cement exports are partly the solution to that, but the logistics situation is rendering exports fairly difficult due to weak road quality and underdeveloped maritime and rail routes. We manage to export to Mali, The Gambia and Guinea-Bissau via the road network, but it remains a struggle.
How do you surpass the high cost of power?
Unlike for cement, the demand for power is higher than the production levels. Several solutions are currently in a discussion such as solar power, individual or micro-grids but the issue remains: these options are suitable for small households or even villages, but cannot tailor to the needs of heavy industries. The issue with heavy industries is that you need power generation 24 hours a day, seven days a week, which determines what type of source you can use. Solar power is a great option for generation but it cannot be stored sufficiently, and storage is expensive. I believe the future of Senegal’s power generation lies in natural gas and coal. The country will gradually move away from fuel because it will notx be competitive, cost wise. Dangote Senegal built its own power plant capable of producing 30MW. I believe the regional power market, which is currently under construction, is an interesting opportunity but the local challenges will remain: Senegal needs to produce more.
What initiatives has Dangote Senegal led regarding Health, Quality and Environment?
The Aliko Dangote Foundation has a budget of around $100 million to carry large projects in health, education and social progress. Each subsidiary individually allocates a part of its own yearly budget to health, quality and environment initiatives. Very recently, we launched the construction of three projects for the benefit of the communities surrounding our factory including a primary school and a maternity unit. Also, we will soon launch the construction of a healthcare centre in the same area.
Part of our health, safety and environment budget goes toward general causes such as youth sports events and a festival for women entrepreneurship where we either provide equipment or financial prizes. We are active both in building community infrastructure, but also support local initiatives.
This article will be published in the upcoming Africa Energy Series: Senegal report which will be launched at the London Investor Forum hosted by Africa Oil & Power on June 11, 2019.
Register here to attend the event.