Register

Register for important updates:

Close

Dangote’s ambitions push it to control Sephaku Cement

26 August 2010

Publication: Business Report
Author: Roy Cokayne

Nigerian industrial giant Dangote Industries, which is to invest an additional R779 million in Sephaku Cement, has given notice it aims to become the largest cement producer in Africa by 2014.

Dangote will increase its equity stake in Sephaku Cement from 19.76 percent to 64 percent through the additional investment.

Dangote was established in 1981 and is one of the largest manufacturing conglomerates in sub-Saharan Africa, with interests in cement, sugar, flour, salt and fish.

Alhaji Aliko Dangote, the group’s chief executive, said yesterday that the group was delighted to increase its investment in Sephaku Cement and its pan-African footprint to include an enhanced presence in the South African market.

“We look forward to bringing our experience and expertise to the project and to producing cement by the end of 2012 as we seek to become the largest cement producer in Africa by 2014,” he said.

The balance of Sephaku Cement’s shareholding will continue to be held by Sephaku Holdings.

Dangote is the largest cement producer in Nigeria and will have a cement production capacity of 16 million tons by the first quarter of next year.

Neil Crafford-Lazarus, the chief executive of JSE-listed Sephaku Holdings, said yesterday that the investment by Dangote and the continued unbundling of non-core assets signalled the rebirth of Sephaku as a recapitalised, financially sound business.

It would focus on the development of two key and highly sought-after industrial products: cement and fluorspar.

Crafford-Lazarus said the additional investment meant the company had now secured the full equity requirement for the cement project and would be exceptionally well positioned to finalise debt funding terms.

Sephaku plans to establish new cement plants in North West and Mpumalanga at a total cost of R3.3 billion.

Sephaku Cement will issue 217.59 million ordinary shares to Dangote at an issue price of R3.58 a share.

Dangote acquired its initial 19.76 percent in Sephaku Cement in 2008.

Crafford-Lazarus said this significant equity investment would be used to fund the development of Sephaku Cement’s Aganang and Delmas projects.

These flagship projects are scheduled to come into production in late 2012, with the Aganang project yielding about 900 000 tons of cement a year and the Delmas project 1.25 million tons of cement a year.

The transactions are subject to shareholder approval and a shareholders’ meeting is planned for the middle of next month.

Sephaku Holdings leapt 7.6 percent to R3.55 yesterday.

Full Financial Analysis

×

Bodibeng Trading Proprietary Limited

Founded by Mr Gaopalelwe Olebogeng from the Verdwaal Village in the North West province who is the sole managing member of Bodibeng Trading Proprietary Limited. Mr Gaopalelwe has previous experience in plant cleaning that he acquired during his tenure as a plant cleaner at another cement company in Lichtenburg. Bodibeng Trading Proprietary Limited employs 36 employees from the local community and currently has a short-term contract with SepCem which includes mentorship to ensure that it effectively provides the plant cleaning services at Aganang.

catering1
×

Mancamane Trading Enterprise

Mancamane is a black female-owned enterprise that started operating in 2010 as a plant cleaning, construction and mining supply company. Ms Daisy Maseko, a renowned entrepreneur, founded the enterprise in the Delmas area, Mpumalanga province and currently employs 28 permanent staff. SepCem adopted Mancamane into the enterprise development programme in 2014. The company is currently supplying plant cleaning services to the Delmas grinding plant and has demonstrated the ability to grow sustainably.

cleaning1
×

MM&JK Cleaning Projects Proprietary Limited

In 2014, SepCem contracted the cleaning services of MM&JK Cleaning Projects, an enterprise established in 2013 by Mr Sipho Mazibuko from a village called Springbokpan in the North West province. SepCem identified MM&JK Cleaning Projects as a well-managed enterprise that is appropriately suited to benefit from the programme. In the case of MM&JK, SepCem has partnered with another major industrial organisation to mentor Sipho.

The partner’s role is to assist MM&JK Cleaning Projects with inproving its cleaning skills through training, providing cleaning equipment and required detergents. SepCem’s role is to develop Sipho’s business management skills including cost management, record keeping and negotiation. SepCem is assisting MM&JK to develop a marketing strategy to increase its customer base to reduce the single-customer dependency risk and ensure that the company is sustainable. MM&JK Cleaning Projects currently has a three-year contract with SepCem for general cleaning at Aganang and employs 14 permanent staff.

cleaning2

×

Millicent’s Enterprise

Millicent’s Enterprise is 100% black female-owned and was founded by Ms Millicent Mahlabe, an entrepreneur from Delmas in the Mpumalanga province. The company was selected for the programme because it has historically demonstrated the ability to supply large contracts but lacks administration skills. Millicent’s has a good reputation and positive track record of being able to cater for large provincial government events.

SepCem secured Millicent’s catering services in 2013 for its canteen at the Delmas plant that provides meals to 150 employees. Millicent’s currently has seven permanent employees and several contract employees who are sourced as and when required.

catering1
×
Top