Here’s Why Dangote Cement is Marching Ahead of the Industry

Despite a myriad of challenges bedeviling the manufacturing sector, Dangote Cement stands out as it continues to retain its position as the most cost effective cement maker that showcases impressive results in the stock market.

The largest producer of the building material in Africa’s most populous nation spent less on input costs to produce each unit of products as total cost to sales ratio stood at 67.84 percent, according to MoneyCentral calculations.

That compares with BUA Cement, 69.0 percent; Nascon Allied Industries, 74.49 percent; BUA Food, 74.80 percent; Lafarge Africa, 75.07 percent; PZ Cussons, 78 percent  Nestle Nigeria, 77.46 percent; Fidson HeathCare 83.06 percent; Dangote Sugar, 83.60 percent; Beta Glass, 86.48 percent; Vitafoam, 86.39 percent; Unilever, 87.03 percent; Flourmills, 88.86 percent; Nigerian Breweries, 93.08 percent, and International Breweries, 98.76 percent.

Dangote Cement’s cost effectiveness compared to peer rivals whose costs have eroded profitability stems from its ability to seamlessly transit to cheaper energy for subsidiaries across the continent.

In Tanzania, the company uses gas generators in its Mtwara cement plant’s equipment and lorries to reduce fuel costs by 45 percent.

The producer of the building material plans to establish a compressed natural gas (CNG) filling station in Dar es Salaam. Its operations remain 70 percent reliant on rental vehicles that run on oil.

Investors have confidence in the cement maker’s growth prospect, and that a tenacious cost control amid a tough and unpredictable macroeconomic environment will spur future earnings.

Dangote Cement’s shares have gained 114.66 percent since the start of the year, outperforming the NGXASI index.

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