Dangote Plans New Plants, Mines in Africa

Aliko Dangote, plans to launch several new cement and sugar plants as well as mines across the continent, accelerating an expansion outside his Nigerian home market and shrugging off a downturn in Africa.

A slump in commodity prices, lower demand from China and investor flight from risky emerging markets has hit African economies and state budgets hard, raising borrowing costs and the prospect of instability.

But the Nigerian billionaire said his industrial empire would expand its cement production in several African countries, betting on a future construction boom.

"We believe that the future is mostly to do with infrastructure," he told Reuters. "There is so much of a deficit in infrastructure."

In August, his Dangote Cement said it had signed contracts worth $4.34 billion with China's Sinoma International Engineering Co. to build cement plants and boost production by 25 million tones annually.

But now Nigeria's biggest listed firm will add an extra $400 million as some projects were turning out larger than initially planned. "It will be close to $4.8 billion," he said.

A cement plant in Ivory Coast, for example, would produce 3 million tones annually, double the initial plan, he said.

Plants will be built in Cameroon, Ethiopia, Kenya, Mali, Niger, Nigeria, Senegal and Zambia, according to last month's statement. Another plant will be launched in the Democratic Republic of Congo (DRC) next year, Dangote said.

Dangote could also acquire existing cement plants outside Nigeria if an opportunity came up, he said.

The Chinese partner will build turnkey cement plants buying machines and other technical equipment from German firms such as Siemens. "Anything with engines is coming out of Germany," he said, naming apart from Siemens the firms IKN and Loesche.

The financing would be a mix of company cash and debt, he said.