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Dangote To Stabilize Cement Price Through Direct To Customer Delivery Strategy

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Amid cheers from the shareholders for a good outing in the year 2013, Chairman of Dangote Cement Plc, Aliko Dangote, has pledged that his company would intensify direct-to-consumer deliveries as a means of stabilising the price of cement in the country.

Dangote gave this pledge while addressing shareholders at the 5th 2013 Annual General Meeting (AGM), of Dangote Cement Plc, held in Lagos yesterday, saying the company sold 13.3 million tonnes of cement in Nigeria within the financial year representing an increase of 28.2 per cent over sales recorded in 2012

Insisting that his company has not increased the price of cement, he explained that though prices of most inputs into cement production has gone astronomically high but that his organisation is committed to making the commodity available to consumers at the most reasonable price.

'We have not increased the prices of our product, we have embarked on an initiative to improve the standard of cement sold in Nigeria and our belief is that 42.5 strength cement, is the most appropriate for general use now.

'We have recently introduced 52.5 strength cement,which is appropriate for heavy load-bearing structures such as bridges and flyovers, we hope to increase the market share in the short-term by increasing the level of direct-to-customers deliveries and competing on product superiority', he stated

The company Chairman also expressed optimism that the current year would offer better returns because trading has remained robust in the country and the company has started witnessing solid start to the year with demand up in all regions.

Dangote also informed the shareholders the status of the company's various African projects as the shareholders one after another shower commendations on the management of the cement company.

Said he: In Ethiopia, work is well underway, to build 2.5m mtpa plant at Mugher with production expected late in 2014. In Tanzania, we have begun work on a 3m mtpa plant at Mtwara and would be fully operational in 2015. In Zambia, work is underway on a 1.5m mtpa at Ndola with cement production expected in second half of 2014.

'We are reviewing plans for Kenya with a view to increasing the scale of our proposed factory from 1.5 to 3.0m tpa, because we are confident there will be sufficient demand both in Kenya and neighbouring countries.'

Dangote disclosed that plan were afoot to build import and grinding facilities along the coast of West Africa to receive and process raw materials supplied from Nigeria, Senegal, and elsewhere.

In his comment during an interview journalists, Group Managing Director of Dangote Cement Plc, DVG Edwin attributed the impressive results of the company to focused and strategic management.

He stated: 'Dangote Cement made excellent progress in 2013. As the Nigerian cement market grew by a strong 15.6% we managed even better growth of 28.2%, with our revenues increasing by 29.4% to ₦386.2bn. Our direct-delivery strategy is proving very popular with customers and I am pleased to report that direct-to-customer deliveries now account for more than half of our sales.'

'We increased our margins despite continuing disruption to our gas supply and believe that the gas distribution infrastructure will be more robust in 2014, enabling us to improve our margins even further. At the same time we are looking at ways to diversify our fuel supplies to mitigate the impact of any future disruption and reduce the cost of using alternative fuels to gas.'

'Our financial strength has allowed us to increase our dividend by 133% to ₦7.0 per share and the coming year will see our new factories opening across Africa as we begin to deliver on our promise to become Africa's leading cement producer, generating strong and sustainable returns for our shareholders.'