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Dangote Cement Earns N292billion Revenue In Q2 Report.

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Dangote-Cement (1)

Africa’s leading cement producer, Dangote Cement Plc, has reported a revenue of N292 billion in the second quarter ended June 30, 2016.

This is an increase of 20 per cent over the N242 billion posted in the corresponding period in 2015.

According to the reports filed with the Nigerian Stock Exchange, the company’s profit for the period stands at N106.3 billion, representing a slight decline by 3 per cent from N123.1 billion declared a year earlier.

The Chief Executive Officer of the cement company Onne Van der Weijde, in a statement said: “We have achieved a commendable result, given the very challenging situation in our main market and general economic weakening across Africa.”

Weijde said the management would continue to respond to the prevailing operating environment with strategically thought measures for the organization to maintain its leadership and profitability.

On expansion, he added: “While the company remains committed to its ambitious plans, we are taking a more measured approach to the roll-out of new capacity across Africa.”

Dangote Cement has more than doubled production capacity since 2013 and said in April it may increase cement capacity by a further 77 per cent by the end of 2019.

Foreign exchange constraints in Nigeria have prompted the company to reconsider the pace of its expansion and now believes a five-year building programme is more appropriate.

Earnings in the period were affected by lower selling prices, higher fuel costs and the fact that several new plants are still in less-efficient start up phases, the company said.

Cement sales volumes in the period increased by 60 per cent, bolstered by record volumes in its home market, where the company announced a price cut last September, as well as new plants elsewhere on the continent.

The devaluation of the naira will affect costs in the country and Dangote will seek to protect its profit margins, Van der Weijde said.

BIG STORY

UPDATE: Three Oil Marketers Sue Dangote, Insist On Petrol Import

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Three oil marketers—AYM Shafa Limited, A. A. Rano Limited, and Matrix Petroleum Services Limited—have urged the Federal High Court in Abuja to dismiss a suit filed by Dangote Petroleum Refinery and Petrochemicals.

In a joint counter-affidavit, marked FHC/ABJ/CS/1324/2024 and dated November 5, 2024, the marketers responded to an originating summons filed by Dangote Petroleum Refinery and Petrochemicals. They argued that granting the refinery’s application would have disastrous consequences for the country’s oil sector.

The marketers further emphasized that efforts to monopolize the oil industry would be a recipe for disaster for the nation.

Dangote Refinery, in its originating summons dated September 6, 2024, had sued the Nigeria Midstream and Downstream Petroleum Regulatory Authority, the Nigerian National Petroleum Corporation Limited, and several other entities, including AYM Shafa Limited, A. A. Rano Limited, T. Time Petroleum Limited, 2015 Petroleum Limited, and Matrix Petroleum Services Limited, as the 1st to 7th defendants.

The refinery prayed the court to declare that NMDPRA was in violation of Sections 317(8) and (9) of the Petroleum Industry Act (PIA) by issuing licenses for the importation of petroleum products.

It stated that such licenses should only be issued in circumstances where there is a petroleum product shortfall.

It also urged the court to declare that NMDPRA is in violation of its statutory responsibilities under the PIA for not encouraging local refineries such as the company.

Shafa, A. A. Rano, and Matrix Petroleum, however, responded that Dangote refinery does not produce adequate petroleum products for the daily consumption of Nigerians.

They noted that the plaintiff had not placed anything before the court to prove the contrary.

They argued that they are well qualified and entitled to be issued an import licence by NMDPRA to import petroleum products in Nigeria within the meaning of Section 317(9) of the PIA.

They also noted that they are fully qualified for the issuance of the import licences issued to them by the 1st defendant, as they duly met all the legal requirements for the issuance of such import licences, before the same were issued to them.

“The import licences lawfully and validly issued to the defendants did not in any way whatsoever, cripple the plaintiff’s business or its refinery.

“The import licenses issued to the defendants by the 1st defendant are in line with the provisions of the Petroleum Industry Act, 2021, the Federal Competition and Consumer Protection Act, 2018, and other relevant laws,” they contended.

They insisted that giving Dangote Refinery the power of monopoly in Nigeria’s petroleum industry as it sought in the instant suit, would kill competitive pricing of petroleum products in the country.

Stressing that such an act would further deteriorate the country’s critically ailing economy.

They also added that it would “unleash untold hardship on Nigerians, all of which constitute a recipe for disaster in the polity”.

The marketers explained that if Nigeria puts all her energy eggs in one basket by stopping the importation of petroleum products and allowing the plaintiff to be the sole producer and supplier of petroleum products in Nigeria, with liberty to determine the prices at which it supplies the products, the prices of petroleum products will continue to rise and energy security will elude Nigeria.

They also noted that should the refinery break down being a monopolized sector, the country will be plunged into a hot mess of energy crisis.

“That in the event of any breakdown in or obstruction to the production chain of the plaintiff which stops it from producing Nigeria will be thrown into energy crises because it does not have the reserves that would last it for at least 30 days that it would need to order, pay for, freight and import refined products into tanks in Nigeria.

“That amidst the glaring absence of any credible and demonstrable proof that the plaintiff refines and supplies adequate petroleum products for the daily use/consumption of Nigerians, is a recipe for disaster in Nigeria’s energy sector.

They further told the court that granting the reliefs sought by the plaintiff was a design to leave Nigeria and Nigerians at the mercy of the plaintiff with respect to the availability and cost of purchasing petroleum products in the country.

The presiding judge, Justice Inyang Ekwo fixed January 20, 2025, for a report of settlement or service.

  • Dangote Exports Products

Meanwhile, three foreign firms have accounted for about 75 per cent of what’s being lifted from the 650,000-barrel-per-day Dangote refinery, a new report has stated.

A report by Bloomberg on Wednesday said Vitol Group, Trafigura Group, and BP Plc are the dominant buyers of fuels from the oil refinery that’s reshaping petroleum trading in Africa and Europe.

The trio has accounted for the vast majority of the plant’s shipments since flows began ratcheting up around the middle of this year, according to data from Precise Intelligence, a new oil-and-gas trading analytics firm based in Geneva.

The report quotes products offtake from February 27 to October 10 with other customers including the local market taking 25 percent of total fuel purchases from the company.

Earlier this year, Dangote began operations and kick-started the production of diesel, aviation fuel, and LPG before subsequently progressing to the production of Premium Motor Spirit (petrol).

Once it’s fully up and running, Dangote should be able to process about 650,000 barrels a day of crude into products including gasoline and diesel.

That will far exceed the fuel making capacity of any single plant in Europe or Africa, helping to reshape the regions’ oil and fuel trading.

The emergence of Dangote has already trimmed a glut of Nigerian crude.

Analysis of the report showed that the refinery has loaded almost 6 million tons of fuel since starting up.

This is equivalent to almost 45 million barrels, loading rates averaged about 35,000 tonnes a day in October, its data showed.

Dangote itself said late last month that the refinery had reached processing rates of about 420,000 barrels a day of crude.

The plant is also selling into the Nigerian market.

The composition of fuel cargoes loading from Dangote is closely watched because it offers clues into where the refinery is at in terms of starting up different processing units.

On the products sold, the figures show that automotive gas oil — commonly known as diesel — is the largest cargo type being lifted, accounting for the highest proportion of shipments. This is followed by fuel oil, which ranks second in terms of volume.

Together, these two products make up more than 60 per cent of the total output being collected from the plant.

Other significant fuel types being processed include gasoline, which is used for cars and other light vehicles, and jet fuel, primarily utilised by the aviation industry for aircraft.

 

Credit: The PUNCH

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BIG STORY

Oil Marketers Counter Dangote Refinery On Substandard Products Claim, Say “It’s False”

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Oil marketers, under the umbrella of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), have rejected claims by the Dangote refinery suggesting that cheaper petrol sold by other marketers is substandard.

On November 3, the Dangote refinery stated that any oil marketer offering petrol below its price is likely importing inferior products.

The refinery emphasized that its prices are aligned with international benchmarks and the rates at which the Nigerian National Petroleum Company (NNPC) Limited sells to local marketers after deregulation.

In response, DAPPMAN’s executive secretary, Olufemi Adewole, issued a statement on Tuesday, asserting that none of the association’s members are involved in the importation of low-quality products into Nigeria.

“We have said this for the umpteenth time, and it bears repeating, those in the downstream sector business of petroleum products trade are patriotic Nigerians who will not shortchange Nigerian citizens for filthy lucre,” Adewole said.

“Our members are in this business to add value to the businesses of their fellow Nigerians and not to defraud them.

“Prices of products in the international market are dynamic as they are dictated by prevailing circumstances at every given situation. We calculate our landing costs based on the dynamics of market forces, and the templates are always in the public domain.

“To claim that if the landing cost of imported product happens to be lower than that of the refinery indicates importation of low quality product is not only preposterous, but also fallacious. In any case, the management of the refinery has, until now, kept its cost and prices close to its chest and put it away from public scrutiny.”

Adewole said the refinery’s comment is targeted at projecting DAPPMAN’s members negatively before the public.

He also said such claims cannot help the company’s desire to have oil marketers patronise its products.

“What will ensure such patronage is transparency, fairplay, and readiness to compete with others, including foreign refineries, on an even keel and on a level playing field,” he added.

The DAPPMAN executive secretary said the company’s claim that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) does not have a modern laboratory to test imported fuel is false.

“A regulator must have access to modern, state of the art laboratory at every point in time, whether owned by it or others. Such laboratories must be of world standard,” he said.

“The regulator, and indeed, the marketers, have access to such world-class laboratories, which include: SGS, Inspectorate, and Interterk, among others.

“If fuel marketers were bringing in off-spec fuel, this wouldn’t have been difficult to detect. How many vehicles in the last one year have reported engine problems resulting from bad fuel? Where are the reports about environmental pollution occasioned by the usage of low quality fuel?

“It is a false statement to claim that any product brought in with a landing price lower than the price offered by the Dangote Refinery is a substandard product.

“It is the management of the refinery that will need to tweak its template to reflect the crude for naira sales and other incentives which the federal government has graciously extended to the refinery.”

Adewole also said the members were surprised to know that the refinery has a 500 million litres fuel reserve.

“We were surprised because we believe that if the Refinery has such huge stock, it is the marketers that should be put in the know first,” the executive secretary said.

“Secondly, it was even more surprising given that the news came about the time the refinery was working on rationing what each marketer could pick from the refinery. If they had such huge stock, how is it then that they are rationing what marketers could buy.”

Adewole said the association will continue to play by the rules and will not be tired of advocating for a level playing field, and a competitive and transparent sector.

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BIG STORY

Imported Petrol Cheaper Than Dangote’s N990 Per Liter — Marketers

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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has criticized the Dangote Petroleum Refinery for selling petrol at N990 per litre, describing the price as inconsiderate. The association pointed out that Dangote Refinery benefited from significant concessions in accessing foreign exchange during its construction.

PETROAN also argued that imported petrol is cheaper than Dangote’s N990 per litre. Major marketers recently revealed that the landing cost of imported petrol as of October 31, 2024, stood at N978 per litre.

On Sunday, Dangote Refinery accused PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) of planning to import substandard petroleum products into the country.

In response, PETROAN Publicity Secretary, Joseph Obele, issued a statement on Monday, stating, “PETROAN will sell far less than the current selling rate of PMS in Nigeria when granted an import licence by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.”

Obele said the association had successfully incorporated a strategic business unit called PETROL.

While noting that PETROAN’s drive was solution-centric and patriotic following the pricing instability and turbulence in the downstream sector, the association said the reformative agendas of President Bola Tinubu were seen as inimical to advocates and beneficiaries of the monopolistic market.

“Consumers get the best value for pricing when competition is at its peak, hence Competition should be encouraged. Contrarily to competition, such a market will be exploitative and strictly for profiteering.

“The publication by Dangote refinery that PETROAN will import substandard petroleum products is not coming as a surprise to stakeholders, because such is his usual gimmick for maintaining a monopoly. The publication was coming after PETROAN and IPMAN announced plans to sell far less than the current Selling rate of PMS in Nigeria.

“It is important to set the records straight that PETROAN has never compared the price of Dangote PMS with any, other than the fact that Dangote’s PMS price wasn’t known until this morning at the press release by Dangote Refinery,” Obele said.

He insisted that “PETROAN has concluded plans with its foreign refinery counterparts and financial partners to import the best quality of PMS and then sell far less than the present selling rate of PMS in Nigeria. We planned to enter the market before December 2024, pending the approval of our import permit license by the regulatory agency and access to foreign exchange from CBN at the official rate.”

The PETROAN spokesman maintained that before now, the Dangote refinery had refused to make public its selling rate of PMS until IPMAN and PETROAN announced their readiness to sell at prices less than the current prices.

“The rate of N990 as announced by Dangote refinery was inconsiderate based on the fact that Dangote refinery enjoyed massive concessions for accessing foreign exchange during the construction of the refinery.

“The core determinant for setting the price is a consideration of the cost of production, then adding a fair margin. But this wasn’t the case for the determinant of PMS price by Dangote refinery as they said ‘the parameter was comparison with the international selling rate at the global market’.

“A nation that gave you a yet-to-be-disclosed concession for foreign exchange which was highly criticised by financial experts, such a country pricing template shouldn’t have been templated by the selling rate at the international market but rather it should have been the cost of production plus fair margin,” Obele stressed.

He added that goods from Chinese markets are not as costly as goods from the American market because the cost of production differs.

“The allegations that PETROAN will import inferior products and also that an international company is trying to establish a PMS blending plant in Lagos are all strategies for Dangote refinery to push others out of the market to achieve a monopoly for exploitation.

“A few months ago, the CEO of Dangote refinery said the NNPC LTD was importing inferior petroleum products, that his own was far better than what NNPC LTD was selling to marketers. In another press conference, he said the refinery in Malta was just a blending plant and not a refinery. All the allegations are intending to close the doors against other operators to enjoy monopoly,” it was stated.

PETROAN commended Tinubu for his commitment towards the revamping of the nation-owned refineries, saying the ongoing rehabilitation project never suffered funding under Tinubu.

The association maintained its position by counselling that the Port Harcourt and Warri Refinery plants be immediately privatised and handed over to a reputable firm with the technical capability, managerial skills and financial strength in partnership with PETROAN and other critical stakeholders after completion.

This, Obele said, will enable the operators of the government-owned refineries to withstand aggressive ballistic competition that will be poised by the known beneficiaries of the monopolistic market.

The statement read further, “Antecedents of the beneficiaries of the monopolistic market has shown numerous suffocating business owners crashing out of other sectors for a sole operator in the past. Stakeholders’ concerns are a prayer that the process of privatisation should be transparent using Indorama Petrochemicals as a model as against the Maintenance Repairs and Operations contract.

“A balanced market should be an all-inclusive market where the market leader is enjoying his lead, while the market challenger is servicing a certain degree of the consumers and the market followers are still surviving in the market at an affordable price.

“Therefore, it is penitent that the Federal Government should discourage and dismantle any attempt at monopoly in the downstream sector given crashing the current selling rate of PMS. The only catalyst to trigger PMS price reduction is by ushering in competition and PETROAN will support the Federal Government in achieving intensive competition in the sector.”

  • IPMAN reacts

In an interview (with The Punch), the National Secretary of IPMAN, Terlumun James, said the association did not have a blending plant in Lagos, calling on all stakeholders to unite and give Nigerians affordable energy.

James said there was nothing like building a depot to blend substandard fuel.

“There is nothing like that and I am not sure Dangote said all those words. I am always at the point of putting things correctly. You media people need to help us and help this country. If we come together, all these things will be solved. The common man is suffering a lot and that suffering has affected all of us. We all need to come together,” he said.

James added that IPMAN is still discussing with Dangote to commence lifting from the $20bn refinery.

“We are pursuing our import approval and we are discussing with Dangote,” the IPMAN secretary noted.

On Sunday, the spokesperson of the Dangote Group, Anthony Chiejina, said “An international trading company has recently hired a depot facility next to the Dangote refinery, with the objective of using it to blend substandard products that will be dumped into the market to compete with Dangote refinery’s higher quality production.”

When contacted, the NMDPRA refused to comment on the allegation.

Replying to a message form media house, the NMDPRA spokesperson, George Ene-Ita, said “No comment”.

 

Credit: The Punch

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