Dangote Cement Plc is intensifying its capital investment plans to counter weaker cement demand across key African markets, according to a new report by CardinalStone Research.
Despite a 6.7 percent year-on-year decline in total sales volumes to 6.8 million tonnes in the first quarter of 2025, the company’s ongoing projects and operational efficiencies are expected to strengthen its medium-term growth and profitability outlook.
The report highlights that Dangote Cement is prioritising strategic capital expenditure to enhance cost efficiency and expand capacity in select markets. Notably, the company is advancing a 3 million metric tonnes per annum (MTPA) grinding unit in Ivory Coast and deploying 1,500 new compressed natural gas (CNG) trucks to optimise energy costs and logistics.
“These projects are expected to dovetail into improved gross margins and robust returns on assets and equity in the coming years,” CardinalStone analysts stated.
Dangote Cement’s haulage costs dropped by 1.1 percent year-on-year in the first quarter, while gross margins climbed to 59.1 percent, compared to 54.0 percent for full-year 2024. The report attributes these gains to the company’s deliberate strategy to embed energy cost savings across its operations.
Further supporting its expansion plans, Dangote Cement is advancing two major capacity projects scheduled for completion by 2028. These include the Itori plant in Ogun State, Nigeria, and an expansion of the Mugher cement plant in Ethiopia, which is set to double output to 5 million tonnes.
“These long-term investments, backed by strong operating cash flows, position Dangote Cement to meet debt obligations and dividend commitments while driving regional cement demand recovery,” the report said.
Short-term challenges remain pronounced, particularly in the Pan-African segment where volumes fell 10 percent in Q1 2025. Countries such as Ethiopia, South Africa, and Senegal continue to grapple with policy delays, economic uncertainty, and disruptions in project pipelines.
In Nigeria, domestic volumes dropped 4.3 percent to 4.4 million tonnes during the period due to reduced private sector demand linked to high prices, insecurity, and stiff competition.
Despite softer volumes, CardinalStone expects Dangote Cement to offset declines with sustained price increases in its core Nigerian market. The research projects revenue per tonne in Nigeria will reach ₦161,200 in 2025, marking a 30 percent increase over the previous year, supported by continued infrastructure demand and pricing power.
The report, however, cautions that weak private sector construction demand and security challenges in Nigeria’s North Central region could weigh on total volumes. Nonetheless, government-backed infrastructure projects under the Renewed Hope initiative are expected to provide some support to public sector demand.
Dangote Cement’s profitability metrics continue to improve on the back of lower financial leverage and enhanced cost discipline. EBIT margins rose to 40.0 percent in Q1 2025, up from 32.2 percent for FY 2024. PAT margins are projected to reach 20.7 percent for the full year, supported by reduced foreign exchange losses and ongoing debt repayments.
CardinalStone notes that Dangote Cement has already settled its ₦100 billion bond and plans to clear an outstanding ₦50.3 billion parent-company loan, strengthening its balance sheet and positioning it for sustained dividend payouts.
Analysts maintain that Dangote Cement’s strategic CAPEX rollout and operational efficiency drive will anchor its resilience amid regional demand headwinds, while positioning Africa’s largest cement producer to capitalise on a future recovery in Pan-African markets.
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