‘Our own coal mills will have 100% quality assurance’
Dangote Cement Plc has stated that its coal mining facility, expected to commence operations by September 2016 would have 100 per cent quality assurance without product blend.
The facility, which would be located in Ankpa, Kogi State, according to the company would drive its future profitability and help reduce foreign exchange (forex) volatility in its business operations.
The Managing Director of the company, Onne van der Weijde while addressing stockbrokers during the company’s ‘facts behind the figures’ held in Lagos on Wednesday, explained that the coal which would be mined in Nigeria was expected to replace the existing locally purchased coal which is blended with imported one to assure optimal quality.
“We want to reduce over dependence on forex. Already we use locally purchased coal blended with imported coal to assure optimal quality. We will begin mining our own coal at Ankpa, Kogi State in Q4, 2016. The quality will be good enough to use 100 per cent, not blend. Most coal mills will be operational by the end of September.”
He pointed out that the company plans to tackle challenges that may arise due to non-availability of forex by exporting cement products to ECOWAS countries, especially in Ghana.
“Forex has become unavailable in the past few months. We are now trying to produce locally and have more made in Nigeria products. We are trying to source and produce coal locally so that we can have more of imported products replaced domestically.
“The second part is that we are exporting our cement to other ECOWAS countries so that we can gain foreign currencies. We try to earn our forex by exporting our product.”
He explained that the coal mining facility is currently in the developmental stage, adding that; “by September, we would have the mining running and in three months from now, we hopefully will see how far it will go for us.”
The Dangote cement boss also announced that company’s new factory in the Republic of Congo would commence operations in the last quarter of the year, assuring shareholders that the expansion exercise would help the firm maintain a healthy balance sheet in the current financial year.
The company, for the six months ended June 30, 2016 posted revenue of N292.2 billion compared to N242.2 billion achieved in the comparative period of 2015, representing an increase of 20.6 per cent.
Its gross profit stood at N153 billion against N157.7 billion recorded in the preceding period, a decrease of 3.0 per cent. Profit before tax also stood at N124.9 billion in contrast with N128.7 billion declared in the corresponding period.
The company’s market share during the review period stood at 66 per cent against 58 per cent in first half of 2015.