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Dangote Cement will add about 25 million tonnes of annual capacity to reach more than 80 million tonnes, and intends to pay for almost all of it out of its own cash.
Arvind Pathak, the group managing director and chief executive, set out the plan at the company's Capital Markets Day in London on Sept. 21. Capacity currently stands at 55 million tonnes a year.
Most of the new tonnage will come from sites the company already owns. Pathak said the expansion will focus on brownfield projects in existing markets, where land, power and water connections are in place, which cuts the capital cost, shortens the build and produces a payback period of about two and a half years.
Greenfield plants take longer and cost more, which is why almost nobody in cement builds them when there is an alternative.
The funding is the striking part. Pathak said strong cash flow makes the project easy to finance and lets the company conserve money, with supplier credit covering part of the rest and debt available if needed. Dangote Cement's leverage sits at 0.1 times and is effectively negative, which leaves considerable room to borrow that the company does not intend to use.
The plan is to copy Nigeria elsewhere. Pathak said the strategy is to use scale to lower production costs and lift volumes across the company's pan-African operations, replicating the low-cost model it built at home.
New capacity is going into Cameroon and Senegal, and the company's Srirangam project in India will require additional clinker, the intermediate product ground into cement. About 60% of the clinker for the expansion will come from Dangote Cement's own kilns, with the rest bought from third parties and adjoining markets.
It is also moving into products it does not currently make, including aggregates, mortars, dry mixes, ready-mix concrete and precast.
The cement business is the anchor of something larger. Dangote Group is running a $45 billion investment programme aimed at $100 billion of annual revenue by 2030, and has positioned cement as a key pillar of that. Dangote Cement turned over $3.1 billion in the twelve months to June, up 22% on the year before.
One market is not in the plan. Pathak told the same event that Kenya does not feature, because the company has not found limestone there that meets its requirements for size, quality and distance from a plant.
Competition at home is sharpening. BUA Cement, owned by Abdul Samad Rabiu, is building toward 20 million tonnes with new plants at Ososo and Sokoto, and the Chinese group Huaxin has taken over the company formerly known as Lafarge Africa and is recruiting distributors across Nigeria.
Dangote is Africa's richest person, worth $51.3 billion according to Forbes.
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