Cementing the right foundations

Firms are building strong ties with African companies

Africa's richest man has signed a contract with a Chinese company to further increase Nigeria's cement production.

Dangote Cement Plc of Nigeria signed construction contracts worth $228 million with China's Sinoma International Group to build cement plants in Senegal and Zambia.

According to the agreements, the two companies will build nine cement plants across Africa, including Ethiopia, Zambia, Senegal, Kenya, Niger, Cameroon and Mali, with annual production capacity of between 1.5 million metric tons and 3 million tons. The expected accomplishment time is about 30 months.

Shen Jun, chairman of Sinoma Nanjing, said the company's cooperation with Dangote could be traced back to 2008 and more than 10 cement plants have been established since then. He said the company plans to bring the latest and the most suitable technologies to Africa and work on transferring skills to local workers.

Huang Ping, Sinoma's Africa regional director, said the contracts are the continuation of a previous collaboration with the group and Sinoma's low cost with good quality, as well as efficiency have attracted the local partners.

"With this the total deal volume between Sinoma and Dangote has exceeded $3 billion," he said.

Aliko Dangote, president and CEO of Dangote, said: "We have concluded this deal with Sinoma in order to drive our pan-Africa expansion strategy at a time when the global economy seems to be emerging from recession."

Aliko Dangote is the richest man in Africa, according to Forbes Magazine, with interests in cement, sugar and flour businesses.

"We are in a strong financial position and we are putting our money where our mouth is," he said.

Dangote has projects and operations in Nigeria, Benin, Ghana, Senegal, Zambia and South Africa, with a capacity of 13 million tons. The group's total commitment to new production capacity in Africa is $1.63 billion

Sinoma's collaboration with an African partner is not a novel experience as it has followed a similar approach in most of its overseas joint ventures, according to Ren Zhigang, the branch manager of CBMI Construction Co Ltd in Abuja, a subsidiary of Sinoma International Engineering Co Ltd and an affiliate of Tianjin Cement Industry Design & Research Institute Co Ltd, considered one of China's top three cement research institutes.