Dangote Group, the largest cement manufacturer in Africa, is making a 400-million-dollar investment to double the production capacity of its Dangote Cement Plc plant in Mugher town, Oromia Regional State, over the next 30 months. The expansion is expected to increase the plant's annual capacity from 2.5 million tonnes to five million tonnes through the addition of a new production line.
The announcement was made during a briefing on Saturday, February 15, at the headquarters of Ethiopian Investment Holdings (EIH). Akilo Dangote, Chairman and CEO of Dangote Group, and Brook Taye (PhD), CEO of EIH, discussed the investment expansion and diversification.
Dangote also held discussions with government officials, including Prime Minister Abiy Ahmed (PhD). He stated that the country’s investment climate has improved, creating an opportunity for business expansion. His last visit was a few months before Abiy came to the helm.
He expressed optimism about investing in Ethiopia, ranking it among the group’s most promising investments after Nigeria. This follows the liberalisation of the foreign exchange market, enabling the investor to repatriate 100pc of its loan repayment obligations, reportedly amounting to hundreds of millions of dollars, as well as 100pc of its dividends.
"We are going to be very bullish in our investment in the country," he said.
Dangote Cement has faced problems in its business in the country, including instability. A particular incident was in 2018, when Deep Kamara, the company's country manager, was killed in an attack by unknown assailants.
Dangote Group is also partnering with EIH to invest in the Omo Kuraz Sugar factories with engineers already dispatched to conduct an analysis. Dangote developed a 60,000hct sugar plantation in Nigeria.
The company is considering expanding its investment into the four sets of Omo-Kuraz Sugar factories (I, II, III, V) and is conducting due diligence to select the best investment options.
Dangote said that agriculture presents a big investment opportunity, fostering job creation, agricultural productivity, and industrial development. Brook indicated that the investment in sugar factories could involve either a joint venture with EIH or a complete divestiture, granting full ownership to Dangote, depending on their decision.
"It will depend upon what they decide on," Brook told Fortune.
Under Brook's management, Ethiopian Investment Holdings’ (EIH) has incorporated several enterprises, including Ethio Post, Ethio Engineering Group (EEG), Ethiopian Industrial Inputs Development Enterprise (EIIDE), Ethiopian Railway Corporation (ERC), Industrial Parks Development Corporation (IPDC), Development Bank of Ethiopia (DBE), Ethiopian Electric Power (EEP), and National Veterinary Institute & ShieldVax. These subsidiaries generated nearly 250 billion Br in total revenues in the first quarter of the 2023/24 fiscal year, achieving 80pc of their target.
Last year, federal authorities sought to privatize Arjo Dedessa, Kessem, Tana Beles, Tendaho, and the Omo Kuraz sugar estates, attracting interest from over 20 investors.
Omo Kuraz II and III, constructed by China National Complete Plant Import Export Corporation (COMPLANT), have commenced production after delays and management changes. The Omo-Kuraz III plant, costing 290 million dollars and located 900km from the capital in the Southwest Ethiopia Regional State, has a daily sugar production capacity of 10,000qtl.
Dangote noted that the company intends to create more than 25,000 new job opportunities.
He also announced plans for investments in fertilizer to support the country's food self-sufficiency drive, including the construction of a urea fertiliser plant. Discussions are underway with the government regarding an agreement for the exploration and extraction of natural gas.
Ethiopia currently relies on fertilizer imports. The federal government distributed 4.5 million quintals of fertilizer last month, representing about 20pc of the 24 million quintals planned for the year, exceeding last year’s import by four million quintals.
Dangote Group, the largest conglomerate in West Africa, has made 12 investments across the continent and has a presence in 17 African countries, leading the cement market on the continent. One of its subsidiaries, Dangote Cement Plc, is the largest listed company in West Africa and the first Nigerian company to be listed on the Forbes Global 2,000 Companies list.
"Only Africa can develop Africa,” said Dangote.
However, an investment consultant who remains to be anonymous argues that Ethiopia's investment condition remains volatile, with security concerns and bureaucratic hurdles hindering investment growth. He says a lack of transparency, unpredictability, and bureaucratic inefficiencies stifle business operations and investment.
“It will be long until the country becomes lucrative for investment,” he said.
The consultant recommends comprehensive reforms to restore confidence and encourage investment.
PUBLISHED ON
Feb 16, 2025 [ VOL
25 , NO
1294]
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