Dangote Cement Bolsters Efficiency With New Cost-Cutting Strategies.
Dangote Cement Plc, Africa’s largest cement producer, has unveiled a series of innovative strategies to reduce operational costs, reinforcing its commitment to sustainable growth and economic resilience. The company, a cornerstone of Nigeria’s industrial landscape, is leveraging advanced technologies and regional trade opportunities to enhance efficiency and maintain its competitive edge in the cement industry.
A key pillar of Dangote Cement’s cost-reduction strategy is its focus on optimising energy use. The company has adopted modern rotary kilns equipped with preheaters that recycle exhaust gases to heat raw materials, significantly reducing fuel consumption. This technology, implemented across its plants, lowers both production costs and carbon emissions, aligning with the firm’s environmental sustainability goals. Additionally, Dangote Cement is exploring alternative fuels, such as waste reutilisation, to further decrease reliance on traditional energy sources.
The company’s export-driven approach is another cornerstone of its cost-saving measures. By commissioning export terminals in Apapa and Onne in 2020, Dangote Cement has expanded its clinker shipments to West and Central Africa, boosting production capacity and reducing fixed costs per tonne. This strategy capitalises on Nigeria’s abundant limestone reserves and supports the African Continental Free Trade Area’s vision of regional self-sufficiency. The increased foreign exchange revenue also helps mitigate currency risks, strengthening the company’s financial position.
In Tanzania, Dangote Cement is set to transition its Mtwara plant to a gas-powered facility, a move expected to eliminate the high costs associated with diesel generators. The $90 million investment in a coal/gas-fired power station, supported by a negotiated natural gas supply from the Tanzania Petroleum Development Corporation, is projected to enhance profitability by reducing energy expenses. The plant has already seen a 64% increase in production volumes in the first half of 2017, underscoring the potential of these initiatives.
Furthermore, Dangote Cement has partnered with General Electric to deploy Asset Performance Management (APM) digital solutions at its Obajana and Ibese plants in Nigeria. This technology enables predictive maintenance, reducing unplanned downtime and enhancing operational reliability. The agreement extends the service life of seven GE LM6000PC gas turbines, ensuring consistent power supply—a critical factor in cement production.
The company’s strategic distribution network also plays a pivotal role in cost optimisation. By positioning distribution hubs close to target markets, Dangote Cement minimises logistical challenges and enhances delivery efficiency. This approach, coupled with streamlined payment processes through partnerships with firms like Fincra, ensures seamless operations across the supply chain.
Despite its focus on cost reduction, Dangote Cement remains committed to its sustainability ethos, known as “The Dangote Way.” The company’s seven sustainability pillars—encompassing institutional, social, economic, financial, environmental, operational, and cultural aspects—guide its operations. While critics note the lack of specific emissions reduction targets, Dangote Cement conducts regular environmental audits and impact assessments to mitigate its ecological footprint.
These strategic initiatives have already yielded positive results, with Dangote Cement reporting a tripling of net income to ₦309 billion in the second quarter of 2025, driven by higher prices and a stable naira. The company’s ongoing expansion, including an $800 million grinding plant in Nigeria set to open in 2026, signals its confidence in sustaining growth while keeping costs in check.
As Dangote Cement continues to innovate, its efforts to reduce operational costs while fostering sustainable industrialisation position it as a leader in Africa’s cement industry, delivering value to shareholders and communities alike.
