Dangote gears up for cement export to ECOWAS …plans to list GDR on London Stock Exchange
Category: Investors NewsBeat
November 23, 2010
Cement export to ECOWAS attractive, says Dangote
The Federal Government’s current incentives to Nigerian exporters and the friendly import policies of ECOWAS countries, make export of cement to neighbouring West African countries a viable proposition, Alhaji Aliko Dangote, President/Chief Executive, the Dangote Group, has said even as the cement company will issue global depository receipts (GDR) to be listed on the London Stock Exchange next year.
“If we export from Nigeria to any of these countries, first of all we collect 30 percent export incentives,” he said. “And then secondly, when we get into those countries, we are not to pay local duties. So it will benefit us quite a lot.”
Dangote, who stated this in an interview with Reuters in London yesterday, disclosed that the company would as from 2012 begin export of cement to some ECOWAS countries in view of its envisaged excess local capacity of more than 20 million metric tonnes and the huge demand for the product in the sub-region.
As part of its strategy of capturing the ECOWAS market, he said Dangote already has a cement plant in Ghana, noting that there are good market opportunities in other neighbouring countries such as Liberia, Sierra Leone and Cote D Ívoire, which lack limestone, one of the basic raw materials used in the production of cement.
“The only thing that we need to do is quickly to create that avenue of exporting cement rather than importing cement,” he said.
Dangote, who revealed that the company is currently consolidating its cement businesses across Africa to reap the benefits of scale, added that the listing of Dangote Cement Plc on the Nigerian Stock Exchange (NSE) last month was part of this strategy. Dangote Cement, which was listed at N2.13 trillion ($14 billion), is currently the biggest quoted company in Nigeria accounting for about 30 percent of the entire capitalization of the exchange.
“And the third phase now, which we will do within the first quarter of next year, will be the other African assets which are owned by Dangote Industries that will be taken over by Dangote Cement,” he added. “This will take us to about 46 million tonnes by 2015.”
Shedding more light on the planned GDR, he said "We have actually made up our mind to do a GDR here in London. The structure is much better for us, it is a market we understand very well,"
"We have to do it in stages, where we do a GDR first, then we will list going forward on the main market. We have an internal target to list in the next year. I think we will achieve it.”
He said Morgan Stanley is one of three international investment banks that would advise on the issue.
"The two others are not announced yet ... They will be building books for the GDR," he said.