Dangote Cement Plc Annual Report 2021
Strategic report
second tranche of the buy-back. In the same month, we became
the first Nigerian listed company to report its financial results in
XBRL format using IFRS taxonomy and commissioned our second
gas-fired power plant in Tanzania. August brought with it the
establishment of a new #150 billion Commercial Paper
Programme, while in September we had a successful 'Sustainable
Week' themed "Building a Sustainable Future: The Dangote Way".
I believe that building a sustainable future is a collective
responsibility and it was fantastic to see such a great team effort
across all our countries of operations. Lastly, in December, CDP
raised Dangote Cement's rating to B- for the Company's
commitment to climate change. The CDP rating upgrade clearly
illustrates the progress made by Dangote Cement regarding our
commitment to transparency and mitigating our CO2 footprint.
Over the last two years, we have finalised the deployment of 6
million tonnes of new capacity in Nigeria - Obajana line 5 and
Okpella plant. This expansion supports the increasingly growing
demand in our local market, as we prepare for the next phase of
growth. That said, we are now focused on a less capital-intensive
expansion cycle, which includes building grinding plants across
West and Central Africa to leverage and strengthen Dangote
Cement's regional integration. We are on track to deploy grinding
capacity in Cote d'Ivoire and Ghana over the coming months,
which will feed off clinker exported from neighbouring
operating countries.
Finally, we have made great strides in our debt capital market
journey, from the issuance of our maiden #100 billion 5-year bond
in 2020 to another landmark bond issuance, where we have now
raised 116 billion. The largest corporate bond issuance in the
history of the Nigerian capital market. Our effort was rewarded
with our 100 billion maiden Senior Secured Bond, selected as
the winner of the 2021 Bonds, Loans & Sukuk Africa Awards for
Local Currency Corporate Bond Deal of the Year. We are very
proud of all these achievements.
What were your biggest challenges in
2021, and how did you manage to
overcome them?
One of the biggest challenges we faced in 2021 was the increased
inflationary pressure across our cost lines. We experienced a
significant increase in our energy cost and spare parts. Some of
these cost pressures were due to the depreciation of the Naira
from #401/1US$ at the end of 2020 to #424/1US$ at the end of
2021, while others were due to macro-economic inflationary
pressure, especially in our domestic market Nigeria where average
inflation was at 16.95% in 2021. Nevertheless, we closely monitored
all our cost lines and working capital needs through our disciplined
cost control measures. Our plant efficiency initiatives, high
productivity of the new assets deployed, and better-fixed cost
absorption across the Group enabled the offsetting of inflationary
pressures on most of our cost lines.
We experienced supply challenges and increased sea freight
costs, which resulted in the volatility in the landing cost of clinker
and cement. Countries importing clinker such as Cameroon and
those importing cement such as Ghana and Sierra Leone faced
challenges due to freight prices and material price volatility.
Lastly, the COVID -19 pandemic persisted into 2021, with various
new variants emerging. We upheld the structures we put in place
in 2020 to manage the pandemic and maintained a strong focus
on health and safety measures in all our engagements
with stakeholders.
Furthermore, we continued testing and aftercare while
encouraging all our staff to get vaccinated. Dangote Cement
remains committed to protecting our team members and
communities by being fully compliant with local laws and
regulations.
How have your sustainability efforts
developed over the year?
In 2021, our sustainability agenda remained firmly on track and in
line with our strategic priorities. I will highlight our continued
sustainability and governance efforts, structured around the
'The Dangote Way'.
Our institutional pillar defines our strong governance framework
with a focus on Board member diversity. We are pleased to
announce the appointment of two new board members, Mr. Philip
Mathew, the Deputy Group Managing Director, with effect from
15th September2021, and Ms. Halima Aliko-Dangote as a Non-
Executive Director with effect from 26th February 2022. As such,
we now have a 27% female Board member representative on our
Board. We have made significant improvements to our
environmental pillar by strengthening our alternative fuel
initiatives. It focus on leveraging the circular economy business
model, optimising costs, and sustainably reducing exposure of
our cash cost base to foreign currency fluctuations. So far, our
plants are currently procuring and installing alternative fuel
equipment that can process diverse types of waste. In 2021, we
co-processed waste lubricants, biomass, industrial waste, scrap
tyres, and fly ash. Thanks to various programs deployed across all
territories of operations, we have also registered a decline in our
energy consumption per tonne compared to the same period last
year. Our social pillar shows our social investments in 2021, having
spent #2.49 billion on CSR across our operations
As Africa's leading cement producer, we are leading the way
with our commitment to sustainability and best practices.
We are driven by the goal of achieving the highest level of
governance and building a sustainable brand for all stakeholders.
Transparency and consistency are at the core of every part of our
business culture.
What is the outlook for Dangote Cement
in 2022?
I am very excited about the future of Dangote Cement. My five
strategic priorities for the year ahead include growth, operational
excellence, financial strength, people management, and
sustainable development. I am dedicated and focused on fulfilling
this strategy in 2022 and beyond.
As the world faces further uncertainty, inflation and scarcity of raw
materials are bringing new challenges. I take pride in our
successes and acknowledge our ability to adapt to the fast-
changing environment. Our goal to be the partner of choice for
those transforming Africa, while creating sustainable value for our
stakeholders remains firm and clear. Despite operating in a
challenging and fast-moving environment, Dangote Cement
consistently delivers superior profitability to the shareholders. The
robust demand experienced across the continent despite the
COVID-19 related challenges, confirm the powerful potential of
these markets. I would like to thank all our investors for your
continued trust and support in our business. I look forward to an
exciting year ahead.
Dangote Cement Plc Annual Report 2021
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