(Updates with comments by Dangote in third paragraph.)
Nov. 30 (Bloomberg) -- Dangote Cement Plc, Nigeria’s biggest company by market value, signed a contract to expand its Ibese plant, Chief Operating Officer Joseph Makoju said.
The expansion will double output at the 6 million-metric ton plant in southwestern Nigeria, Makoju said today at a conference in Lagos.
Signing the agreement early helped Dangote get “a good price for the construction for almost half of the price,” Makoju said, without specifying the cost of the project or saying with whom the contract was signed. Construction will be completed in three years, he added later at a meeting with investors.
Dangote decided to start construction early to help meet demand for cement in Nigeria, Makoju said. Demand for cement in Nigeria, sub-Saharan Africa’s second-biggest economy and the continent’s most populous nation, may rise 45 percent in 2011, Stanbic IBTC Bank Plc said in a report in a report last year.
Dangote Cement is the biggest company traded on the Nigerian Stock Exchange with a market value of 1.63 trillion naira. The company’s parent, Dangote Industries Ltd., has a 64 percent stake in Sephaku Holdings Ltd., a South African mineral exploration and development company that also produces cement.
Dangote Cement said in April that its total annual production capacity should reach 50 million tons in five years. The company may build one production line with an annual capacity for 10 million metric tons instead of two lines producing 6 metric tons a year because “unit investment will be cheaper than two lines doing 6 million,” Makoju said.
Dangote Cement shares were unchanged at 105.10 naira by 12:18 p.m. in Lagos. The stock has fallen 12 percent this year, compared with a 20 percent decline in the Nigerian Stock Exchange All-Share Index over the same period.
--Editors: James Kraus, Linda Shen
To contact the reporter on this story: Vincent Nwanma in Lagos at email@example.com
To contact the editor responsible for this story: Dulue Mbachu at firstname.lastname@example.org