Dangote Cement expands Ethiopian operations with $400m investment

Aliko Dangote, Africa’s richest man and the chairman of the Dangote Group, has unveiled an ambitious $400 million plan to expand the Mugher cement plant in Ethiopia.

The investment aims to establish a second production line at the facility, effectively doubling its output from 2.5 million tons to 5 million tons annually.

The Mugher plant, which commenced operations in 2015, has played a crucial role in Ethiopia’s industrial landscape. However, its growth has been hampered by significant challenges, including regional unrest and security threats.

A tragic attack in 2018 resulted in the deaths of the country manager and two other employees, underlining the volatility of the operating environment.

Despite these setbacks, Dangote remains steadfast in his commitment to Ethiopia, viewing it as a vital market within his broader African cement empire.

The latest expansion aligns with his strategy to scale up Dangote Cement’s total annual production capacity across the continent to 55 million tons.

In 2015, the Dangote Group invested $19 million to add a bagging plant at the Mugher facility, increasing its ability to produce 120 million bags of cement annually.

The new expansion plan includes the establishment of a greenfield grinding unit near Addis Ababa, further cementing Ethiopia’s role as a strategic hub for Dangote’s operations.

Speaking on the expansion, Dangote emphasized the importance of African business leaders in shaping the continent’s economic future.

“Africa will be developed by Africans,” he stated. “As our political leaders work to strengthen the African Union, we as business leaders must complement their efforts by deepening commercial linkages across the continent.”

Dr. Brook Taye, CEO of Ethiopian Investment Holdings, hailed Dangote’s decision as a testament to Ethiopia’s improving investment climate and its commitment to industrialization.

“Ethiopia is undergoing a significant economic transformation that prioritizes industrialization, investment, and job creation. This investment is a strong signal of confidence in Ethiopia’s business environment and will significantly contribute to our infrastructure and economic growth,” he said.

Dangote Cement’s Mugher plant will see its production capacity increase from 2.5 million to 5 million tons per year with the addition of a new greenfield grinding unit near Addis Ababa.

The expansion highlights Dangote’s long-term vision for Ethiopia, reinforcing the country’s role in Africa’s industrialization drive.

Beyond cement, the Dangote Group is diversifying its investments in Ethiopia, including expansion into the sugar industry through operations at Omo Kuraz Sugar Company.

The company is also considering the establishment of a urea production plant, contingent on Ethiopia’s natural gas development, to bolster agricultural productivity.

According to the Bloomberg Billionaire Index, Dangote’s net worth currently stands at $28 billion, further underscoring his influence in Africa’s economic landscape.

The expansion of the Mugher cement plant signifies a major milestone in Ethiopia’s industrial development, strengthening the country’s economic ties with the broader African market.