NAIROBI, Kenya – Dangote Cement has ruled out establishing a manufacturing plant in Kenya in the medium term, citing difficulties in securing suitable limestone reserves for a large-scale cement operation.
Dangote Cement CEO Arvind Pathak made the disclosure during the company’s Capital Markets Day in London on September 21 as he outlined its expansion plans across Africa.
Pathak said Kenya is currently not part of Dangote Cement’s business plan targeting 80 million tonnes of production capacity, which includes a planned expansion of about 25 million tonnes.
“Right now in our business plan, which we have presented for 80 million tonnes, Kenya is not figuring in that. So in this period, that is the medium term, we do not envisage to have a plant in Kenya,” he said.
Limestone shortage blocks Kenya plant
Pathak said Dangote has identified sizeable, high-quality limestone deposits in several African countries where it already operates.
Kenya, however, has yet to offer the company a limestone opportunity that meets its requirements for the size, quality and location needed to support a large cement plant.
He said the company would remain open to investing in Kenya if suitable limestone reserves are identified.
The decision therefore does not amount to a permanent withdrawal from the Kenyan market, but reflects Dangote’s current assessment of the availability of raw materials required for a competitive large-scale operation.
Ethiopia takes priority in East Africa
Instead of establishing a new plant in Kenya, Dangote’s immediate East African expansion plans will focus on Ethiopia, where its existing operation is already producing at maximum capacity.
Dangote Cement’s West Shewa plant in Mugher has an annual production capacity of about 2.5 million tonnes.
The company is expanding the Ethiopian operation as part of its broader strategy to increase production from markets where it already has established assets.
Dangote upgrades Tanzania plant
Dangote is also pursuing a low-cost optimisation programme at its Mtwara plant in Tanzania, an investment valued at about Sh65 billion ($500 million).
The optimisation programme is expected to increase the plant’s production capacity by approximately 16 per cent.
The Mtwara facility currently produces about three million tonnes of cement annually and operates at between 85 and 90 per cent capacity, according to the company.
The strategy reflects Dangote’s broader preference for increasing output from existing facilities where suitable infrastructure and raw materials are already available.
Zimbabwe, Botswana targeted in next expansion phase
Beyond East Africa, Dangote’s next phase of expansion will focus largely on upgrading existing plants while exploring opportunities in new markets.
Zimbabwe and Botswana are among the markets being targeted as the company expands its African footprint.
The approach forms part of Dangote Cement’s wider plan to increase production capacity while keeping investment costs under control.
Kenya remains key to Dangote’s oil plans
Dangote’s decision not to build a cement plant in Kenya comes as the group’s wider interests in the country continue to attract attention.
The company is preparing for the proposed Sh2.59 trillion ($20 billion) Lamu oil refinery and petrochemical complex, with a planned groundbreaking scheduled for September 30.
The refinery project is expected to position Kenya as an important market for Dangote’s energy and petrochemical ambitions in East Africa.
The planned investment in Lamu contrasts with the cement business, where the absence of suitable limestone reserves has led Dangote to exclude Kenya from its medium-term manufacturing expansion plans.
For now, Dangote Cement’s East African growth strategy will therefore centre on expanding its existing operations in Ethiopia and Tanzania, while Kenya remains outside its medium-term plans for a new cement manufacturing plant.
