Dangote Cement turns to local coal, deploys 1,500 CNG trucks

Dangote Cement has started using local coal in its plants as imports became pricier and turned to trucks powered by compressed natural gas (CNG) owing to the surge in diesel cost.

Africa’s biggest cement maker has been switching increasingly towards alternative fuel to cut costs. Last year, fuel and power expenses jumped by 70.3 percent N679.9 billion, driving up its manufacturing costs by 63.5% to N1.65 trillion.

“We have started using local coal. Three, four years ago, we were importing expensive coal at about $80-$100 per tonne. As at today we are using local coal and buying for less than N30,000 N40,000 per tonne,” Gbenga Fapohunda, its group chief finance officer, said at a conference call.

The company has received over 1,500 CNG trucks to replace high-cost diesel-powered vehicles. “Our goal is to expand this fleet to 3,000 in the coming year,” it said. The cost of CNG is about a third of the price of diesel, according to Fapohunda.

“The two biggest cost drivers you have in a cement-producing company is fuel to fire your kiln. The second one is transportation,” he said.