Having introduced competition into the Ghanaian market, Dangote Cement has established itself as a go-to for quality and nationwide coverage, its products helping to build vital infrastructure and homes across the country.
Laying the Foundation
Ghana has come an extraordinarily long way over the past three decades.
Once impoverished and on the verge of economic collapse, fast-forward to the present day and the situation is unrecognisable.
Yes, the onset of COVID-19 has disrupted growth and will cause some tremors, but the past few years have seen Ghana’s GDP grow at some of the fastest rates in the world, with gold, cocoa and oil among its key exports and drivers of prosperity.
This has enabled its government to embark on ambitious infrastructure programmes. Driving a One District, One Factory policy, the idea is to create jobs through the setting up of factories and industries as the country embraces greater levels of industrialisation.
One such industry is cement, a critical supplier to all infrastructure and building projects taking place across Ghana.
“Ghana’s cement sector is both challenging and exciting at the same time,” comments Brice Houeto, Country CEO for Dangote Cement, the continent’s leading producer.
“For example, the most basic cement raw material is limestone, and Ghana is not fortunate in the sense that it does not have large enough reserves for cement producers to draw upon.
“However, the industry has been able to overcome this and the amount of construction going on here is above average compared with the rest of the continent, therefore we are seeing a sustained growth in cement consumption.
“The number of players entering the industry is also increasing very quickly, which of course presents a challenge but means we operate in a dynamic and vibrant sector.”
Indeed, Dangote can be credited for catalysing the competitive buzz seen within Ghana’s cement industry today.
It entered the market in 2010, breaking a long-held monopoly and introducing both a quality and large range of products not seen previously. Today, the company dispatches cement both in bags and bulk from its Tema facility (Greater Accra), an operation which employs around 1,300 local people and sells into the domestic market and nearby countries.
Current capacity stands at 1.2 million tonnes per annum, a capacity that could be supplemented in case of a surge in demand by the group from other Ecowas production sites.
For Houeto, there are two major reasons why Dangote stands above the competition in the Ghanaian market.
“The first is simply about quality,” he says. “What we produce is unmatched, and Dangote is trusted and recognised as such by building professionals all over the country.
“Second is our enormous logistics setup and capabilities. We have a fleet of over 1,200 trucks which are delivering products to customers, a capacity that is simply unrivalled and unheard of. So, not only do we make the best quality cement, we are able to deliver it more efficiently to every corner of Ghana than anybody else on the market.”
Indeed, such has been the success of Dangote Cement Ghana, the Country CEO outlines plans to upgrade and optimise the operation.
“Much of this work involves upgrading our processes and making improvements in productivity,” Houeto continues. “By the time this is completed, we anticipate making productivity gains of up to 30 percent.
“The COVID-19 outbreak has delayed things slightly, but we expect to complete phase one of our plans around November this year, assuming we’re able to start making progress again in September.
“Phase two will begin in the first half of 2021 and involves redesigning the workflow at the plant, creating a clear distinction between the industrial and background support parts of the business. That will enhance both safety and productivity.”
With the Tema upgrades now expected to be completed by around the end of 2021, Dangote is also planning to build a new grinding plant at Takoradi.
Nestled on the coast around 230 kilometres southwest of Accra, it is designed to produce around half a million tonnes per year and will help the company to fulfil increasing demand in the local market.
Central to Dangote’s ability to continue serving Ghana’s cement needs will be a fully functioning supply chain, a facet of the business that Houeto describes as absolutely essential to the success it has enjoyed thus far.
Moreover, the COVID-19 pandemic has heightened the firm’s emphasis on working with local partners, with Ghana full of dynamic producers and businesses with which it can develop fruitful partnerships for a large range of its needs.
“An optimised supply chain is one of the most important factors in our continued success here,” Houeto says. “All of our suppliers I like to refer to as partners, and we must ensure we master these relationships so that in turn we can keep providing exceptional and competitive solutions to our customers.
“We cannot afford for there to be a break in the chain, as the impact on our costs, operational efficiency, and even more so our customers’ satisfaction, is huge.”
Dangote’s support of local communities stretches far beyond providing opportunities for supplier companies.
Not only does the company itself provide major employment opportunities through its Tema plant and 1,200-strong distribution fleet, it also engages various community stakeholders through programmes that are entrenched in sustainability.
“Over the 10 years we have been in Ghana, Dangote has continuously increased its involvement with members of the community through many different activities,” Houeto says. “For instance, we have a greenhouse initiative which is about safeguarding the environment around us, and every year we partner with local forestry commissions to plant trees around the coastline in the Tema area.
“Everything we do in the community is focused on sustainability, whether it is do with the water supply, developing schools or helping hospitals – a self-fulfilling reward of our daily job.”
Indeed, central to the Country CEO’s stance on Dangote’s commitment to communities is the impact such initiatives will have in the long term, the message very much being that the company is here to stay.
Having achieved the milestone of 10 years in Ghana, the firm has a strong foundation from which to further develop its brand and reputation, the clear disruption being caused by the COVID-19 outbreak only being a temporary hurdle to overcome.
Indeed, the pandemic has forced Dangote to adapt to new and innovative ways of working, something Houeto is eager to embrace permanently.
“Like many businesses, Dangote Cement Ghana had to learn to cope with the constraints of the pandemic,” Houeto says. “The health and safety of our personnel as well as our customers is of utmost importance. One of the ways we found to preserve what matters the most was to fast-track working at home, so we digitalised our transactions as much as possible.
“We have kept our employees safe and our customer service has not been weakened, and so I would like to take some of these new ways of working forwards, especially where digitisation has made us more effective.”
This ‘new normal’ leaves Houeto optimistic, not only about Dangote’s own fortunes in Ghana but the wider economic picture and demand for cement as the company moves into its second 10-year chapter.
He concludes the conversation buoyantly: “I can only see growth in this industry over the next decade. Demand will continue to rise both in Ghana and regionally – the need for housing, schools and other vital infrastructure is going to increase.
“Dangote entered the market at a very low base in terms of output and consumption, and there is so much space still to move into.”