May 28, 2022


Accounting + Finance Blog



In a press release to the Nigeria Stock Exchange (NSE), the management of Dangote cement express that by November this year, it will start the mining of coal. This will be used to produce cement.

Dangote cement, before now, relied mostly of gas. But because of the need to use Low Pour Fuel Oil (LPFO) and coal in the production of cement, it has turn to this alternative to gas. Due to the deterioration of the Naira against the dollar, using this means of fuel has result in higher cost of production. However, the company said it remain sales volume has increased by 15% in July and August this year.

To mitigate this high cost, the comapany has decided to increase the ex-factory price of cement price by N600. This has increase the price of cement only marginally above its price at September last year when they announced the reduction in cement price.

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And the company also plans to start mining coal by November this year. The installation of coal mill has already been build in Nigeria and most of the production plants in the country has been converted to make use of coal. Futhermore, local mining of coal will reduce dependency of exported LPFO and coal. According to the management, owned-milled coal will be cheaper than gas which is paid in Naira and priced US dollars. It will also reduced the need for foreign currency at this difficult time in the Nigeria economy.

According to the Dangote cement cheif executive officer, Onne Van Der Weijde, the time we are living has posed challenges to Dangote cement and the Nigerian economy. But with the current action it will position the company for continued success. He said that the coal mining initiative will benefit both Nigerian economy by reducing the need for foreign exchange and helping us to both protect exisying jobs and create new ones.

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H concluded ” despite the challenges we are facing, we continue to focus on becoming a global force in the cement production.

Further reading

Six ways to control your spendings.

How to prepare Bank reconciliation statement with ease.

Knowing the difference between good debts and bad debts.

Issues of PMS price hike and scarcity in Nigeria.

Revamping of railway-stimulus for Nigerian economy.

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