F.L.Smidth has signed a contract to the tune of DKK 1.8 billion (close to EUR 250 million) with privately owned Dangote Group of Nigeria for three new cement production lines each with a capacity in excess of 5,000 tonnes per day.
Two of the production lines will form the basis of Obajan Cement Company which Dangote Group is establishing in Kogi State about halfway between the port of Lagos and the capital of Abuja in central Nigeria. This new cement plant with a capacity exceeding 10,000 tonnes per day will be the largest in Subsaharan Africa when it comes on stream in 2005. The third production line will be located in Ibese in Ogun State, north of Lagos.
Due to commence in August this year, F.L.Smidth machinery and equipment supplies will include three vertical raw mills, six vertical cement mills, three rotary kilns, three clinker coolers plus electrical and control equipment. F.L.Smidth is also responsible for civil design, commissioning, spare parts and training. Three F.L.Smidth Group companies: MAAG Gear, F.L.Smidth Materials Handling and F.L.Smidth Airtech, are to provide gear units, air pollution control equipment and raw material stores, respectively.
Dangote Group is among Nigeria's largest privately owned enterprises with manufacturing and trading interests in food, cement import and distribution. The Group was founded by Mr Alhaji Aliko Dangote who is President and CEO of the company. The first contact with F.L.Smidth was made two years ago followed by initial raw material investigations. Negotiations started in mid 2002 and culminated with the signing of the contract in London on 24 January 2003.
F.L.Smidth has been active in Nigeria since 1955 and is currently completing a 3,000 tonnes per day production line for West African Portland Cement PLC (WAPCO) in the town of Ewekoro, 60 km northwest of Lagos. Cement consumption in Nigeria is rising, particularly in latter years with annual growth rates between 10 and 15 per cent. Nigeria's yearly cement consumption is around 10 million tonnes, corresponding to 75 kg per capita. The domestic industry, consisting of eight cement plants, produces 2.8 million tonnes, whilst the remaining 7 million tonnes has to be imported into Nigeria which is among Africa's most populous nations with more than 130 million inhabitants.
Dangote Industries is the largest cement importer and provides more than a third of all cement sold in Nigeria.
The contracts for the Obajana and Ibese cement plants are expected to become effective during the first and third quarters of 2003.
The order does not affect the already announced earnings prospects for 2003.
FLS Industries A/S
Corporate Public Relations