Dangote Cement Trucks to Run on CNG by 2025
Dangote Cement Plc has announced plans to convert thousands of its delivery trucks to run on Compressed Natural Gas (CNG) by 2025. This initiative aligns with the Federal Government’s agenda to adopt alternative fuels for official vehicles.
Alhaji Aliko Dangote, Chairman of Dangote Cement Plc, shared this update with enthusiastic shareholders at the 15th Annual General Meeting (AGM) in Lagos. He highlighted that this move supports the Federal Government’s efforts to reduce dependence on fossil fuels, enhancing Nigeria’s energy independence and contributing to a more secure energy future.
“We are now going to start using CNG vehicles, especially with the new policy of the Federal Government, launched under the Renewed Hope Agenda by His Excellency, President Bola Tinubu. By the end of next year, all our trucks operating in the company will be running on CNG. This requires significant investment, but we are prepared to meet the challenge and continue to satisfy our shareholders,” Dangote stated.
Dividend Increase and Expansion Plans
In addition to the CNG initiative, Dangote announced a 50 percent increase in the dividend payout to shareholders, from N20.00 per share in 2022 to N30.00 in 2023. He also informed shareholders about the ongoing construction of a new 6 million metric tonnes per annum plant in Itori, Ewekoro local government area of Ogun State. Despite challenges at the Apapa Port in Lagos, the plant is expected to be completed on schedule.
Dangote assured shareholders that the company’s strong performance aligns with his promise of enhanced Return on Investments (RoI). The company achieved a double-digit revenue growth of ₦2,208.1 billion, while Group EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization) reached a record high of ₦886.1 billion, increasing by 25.1%.
“This outstanding EBITDA performance was driven by robust cost control measures and our diverse pan-Africa operations, which provided resilience to country-specific risks and enhanced our overall profitability. Our pan-Africa operations now contribute 41.2% to the Group’s overall volumes,” Dangote added.
Strategic Initiatives and Achievements
- Expansion Initiatives: The successful launch of operations at the 0.45Mta grinding plant in Ghana increased total installed capacity to 52.0Mta. The 1.5Mta grinding plant in Côte d’Ivoire is nearing completion, and construction has commenced on the 6Mta Itori plant in Ogun State, supporting ambitious export goals.
- Performance Indicators: The 2023 results showed a 36.4 percent rise in group revenue to ₦2,208.1 billion, with Profit after tax (PAT) up by 19.2 percent to ₦455.6 billion. Earnings per share increased by 18.8 percent to ₦26.47.
- Market Share: Pan-Africa volumes increased by 12.7 percent to 11.3Mt, demonstrating Dangote Cement’s growing market presence across the continent.
Management Insights
Group Managing Director Arvind Pathak highlighted the effectiveness of the management’s diversification strategy amid challenging macroeconomic conditions. Pan-African revenue increased by a record 123.2 percent to ₦925.9 billion, while EBITDA surged over four-fold to ₦263.7 billion.
Pathak also emphasized the company’s innovative business strategies in response to heightened inflation, including fuel mix optimization and the phased transition from diesel power trucks to CNG trucks.
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Shareholder Praise and Future Outlook
Shareholders praised the company’s impressive performance and substantial dividend payout. Mrs. Bisi Bakare, Chairperson of the Pragmatic Shareholders Association, expressed optimism for even higher dividends in 2024. Dr. Faruk Umar, President of the Association for the Advancement of Rights of Nigerian Shareholders (AARNS), commended the management for navigating economic challenges effectively.
Umar also lauded Dangote’s patriotism and dedication, noting the anticipated positive impact of the Dangote Refinery on petrol prices once it becomes operational.
As Dangote Cement Plc moves towards a greener future with its CNG initiative, the company’s strategic efforts and strong performance underscore its commitment to sustainable growth and shareholder satisfaction.
