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Dangote, Sinoma in $3.9bn African Cement Deal




April 13, 2011 by Crusoe Osagie
Dangote Group and Chinese firm Sinoma have jointly entered into a fresh $3.9 billion contract to be executed in six African nations, including Nigeria.
The contract which was signed in Lagos   by the President of Dangote Group, Alhaji Aliko Dangote, and President of Sinoma, Mr. Wu Shoufu, will see Dangote cement’s output across Africa rise to about 50 million metric tonnes per annum in two and a half years.
Dangote said the move is in line with his company’s overall objective of boosting cement production and supply within the African continent to the end of making the product accessible and affordable for the ordinary person.
Group Executive Director, Business Development of Dangote Group , Mr. Edwin Devakumar, told journalists after the contract signing ceremony that the Engineering, Procurement and Construction (EPC) contract with Sinoma will see Dangote Group spread cement production across five  other African states apart from Nigeria, Senegal and Ghana.
The new contract includes 1.5 metric tonnes per annum integrated cement plants in Ethiopia, Tanzania, Republic of Congo and Gabon.
The projects also include a 3 million metric tonne per annum integrated cement plant in South Africa. Other projects covered in the EPC agreement include a fresh 3 million tonnes per annum capacity line in Obajana, Kogi state; two lines with combined output capacity of 6 million metric tonnes per annum in Ibeshe, Ogun State, as well as a 1.5 million metric tonnes cement grinding plant in Cameroun.
“The total value of all the projects including the EPC, power plants and mining equipments will be about $3.9billion and all the projects are expected to be delivered in 27 months from kick off” Devakumar said.
He explained that the nature of the agreement is such that all the equipment for use in the EPC will be procured from Germany while the manpower will be handled by the Chinese firm.
“Sinoma does the designs but all the equipment including crushers, raw mills, coolers, process fans and others will be from Germany in Europe” he said.
Explaining why Sinoma of China was the preferred company to handle the project, Devakumar said the Chinese firm brings the most competitive cost to the project. He added that they also had the best steel prices and are always ready to take on the EPC risk, which is often avoided by European Construction Companies.
Source: Thisday
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