As at the end of 2017, the company operated an output of 46Mta of production and import capacity in a total of 10 countries spanning Africa, from Senegal to Ethiopia and down to South Africa.
This impressive growth in production capacity has contributed significantly to boost the company’s revenue base.
The company has keyed into its Pan-Africa expansion drive as it noted that “Sub-Sahara Africa is home to a billion people and has a population growth rate of nearly three per cent per year.
By 2050, the United Nations estimates, the region will have a population of more than two billion, all of whom will need homes in which to live, roads on which to drive, places to work and shop and all the infrastructure necessary to support a modernising society.”
The company stated in its annual report that “the success of our expansion is seen in the rapid gains in market share we achieved across Africa soon after our plants were opened despite the presence of strong incumbents.
The company’s revenue in 2017 grew by 30.97 per cent, while in first quarter and second quarter, 2017, its revenue increased by 16 per cent and 17 per cent.
In boosting its revenue and working capital, the company recently announced the issuance of N150billion Series 1 and 2 Notes.
The Commercial Paper comprises of N12.04 billion and N37.96 billion issuances under its N150 billion Commercial Paper (CP) Programme.
The company had issued the first N50 billion Series 1 and 2 Notes, under the established N150 billion CP Programme and listed it on the FMDQ OTC Securities Exchange last week.
According to FMDQ, this is the biggest Commercial Paper programme so far on the Nigeria debt capital market on its platform.
Commercial Papers are short-term debt financing securities no longer than 270 days in tenor and consists of unsecured and discounted promissory notes issued by large corporations with good credit ratings, which can be readily traded.
Due to their relatively short maturity period, commercial papers are referred to as low-risk investments, offering competitive returns to investors in compensation for the issuer’s credit risk.
Following the resuscitation of the Nigerian CP market by FMDQ in 2014, transparency, price discovery, liquidity, efficient quotation processes, amongst others, have been established in the market, paving the way for issuers and investors to effectively and sustainably meet their funding needs, as well as contribute to the development of the nation’s debt markets.
Welcoming the guests to the listing ceremony, directorate Head, Capital Markets, FMDQ, Ms. Tumi Sekoni, commended the issuer and sponsor of the issue for achieving this milestone, noting that their decision to raise
funds from the debt markets was testament to the restoration of confidence in the Nigerian CP market, which had been marked by an extended period of dearth of activity, significantly weakened issuer interest and diminished investor confidence.
She further stated that the issuance would encourage other corporates and commercial entities to effectively tap the potential burgeoning CP market to finance their short-term funding needs, thereby adding more depth and breadth of the Nigerian debt capital markets (DCM).
She added that the quotation of the CPs would undoubtedly pave the way for the establishment of a globally recognised non-financial corporate benchmark for the Nigerian CP
market, owing to the associated rating and reputation
garnered by the Dangote conglomerate and encouraged the issuer to continue to tap the debt markets to ensure the actualisation of the desire for a corporate benchmark in the Nigerian debt markets.
Group chief executive officer of Dangote Cement, Mr. Joseph Makoju, stated, “this is the largest Commercial Paper issuance of any Nigerian company and we are delighted to list it on FMDQ, which has significantly contributed to the development of the domestic debt capital market in Nigeria.
“By promoting transparency, governance, integrity and efficiency in the CP market, FMDQ is encouraging issuers like ourselves to explore alternative funding sources in the Nigerian capital markets.”
Delivering the registration member (Quotations) remarks, executive director and head, Debt Capital Markets, Mr. Kobby Bentsi-Enchill, reaffirmed Stanbic IBTC Group’s commitment towards contributing to development of a world class capital market in Nigeria.
“The domestic capital markets are gradually deepening and growing in sophistication, as prospective issuers become aware of the various financing options available to them via the capital markets”, he said.
He added that this is evidenced by the decision of Dangote Cement to tap the CP market, being their inaugural issuance in the Nigerian DCM.
According to Bentsi-Enchill, at Stanbic IBTC, we partner with our clients to deliver holistic, innovative and cutting-edge financial solutions that help them to achieve their funding objectives.
In doing so, we are able to bring the full weight of our franchise to support our clients, enabling them to achieve a transformed business and customer service experience.
Managing director/CEO of FMDQ, Mr. Bola Koko, said that, “the entry of the Dangote Group to the Nigerian DCM, will not only re-ignite the appetite of local and foreign portfolio investors in the debt markets but is a very welcome
development, as the criticality of the implementation of the Basel III regulations framework to strengthen the risk management of banks lays credence to the urgent need for financial market participants to effectively tap the debt markets for their funding needs.
He further commented that FMDQ shall continue to promote market development in collaboration with the stakeholders, to make the markets within its purview globally competitive and well-aligned to support economic growth and development for the benefit of the citizenry.
Since inception, the Dangote Group has experienced phenomenal growth on account of quality of its goods and services, its focus on cost leadership and efficiency of its human capital.
Dangote Cement is ready to pursue a wider vision which is to be a global leader in cement production, respected for the quality of its products and services and the way it conduct its business.
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