Quick Read: Aliko Dangote has announced a $400 million expansion of the Mugher cement plant in Ethiopia, doubling its capacity to 5 million tons annually. Despite past challenges, Dangote remains committed to Ethiopia’s industrial growth. The expansion includes a new grinding unit near Addis Ababa. Additionally, Dangote Group is exploring investments in Ethiopia’s sugar and urea production sectors.
Africa’s richest man, Aliko Dangote, has unveiled a $400 million expansion plan for the Mugher cement plant in Ethiopia. This investment aims to double the plant’s annual output from 2.5 million to 5 million tons, strengthening Ethiopia’s cement production capacity.
Challenges and Resilience
Since its launch in 2015, the Mugher plant has encountered significant challenges, including regional unrest and violent attacks on company property. In 2018, a tragic incident resulted in the deaths of the country manager and two employees. Despite these difficulties, Dangote Cement, which operates in 10 African countries, remains committed to expanding its presence in Ethiopia.
Strategic Expansion
The Mugher plant plays a crucial role in Dangote Cement’s broader strategy to increase its total annual cement production across Africa to 55 million tons.
In 2015, the Dangote Group invested $19 million to establish a bagging plant at the Mugher facility, enabling it to produce 120 million bags of cement annually. The latest expansion will also introduce a new greenfield grinding unit near Addis Ababa, further enhancing production capacity.
Dangote’s Perspective
Dangote, Chairman and CEO of the Dangote Group, expressed strong confidence in Ethiopia’s investment climate, calling it his “best investment destination.” He emphasized the critical role of African business leaders in shaping the continent’s economic future.
“Africa will be developed by Africans. 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.”
Government’s Response
Dr. Brook Taye, CEO of Ethiopian Investment Holdings, welcomed Dangote’s investment, highlighting Ethiopia’s focus on industrialization and private-sector growth.
“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.”
Key Takeaways
- The expansion will increase the Mugher cement plant’s production capacity from 2.5 million to 5 million tons per year.
- A new greenfield grinding unit near Addis Ababa will play a key role in boosting capacity.
- Dangote Group is also diversifying into Ethiopia’s sugar industry by enhancing operations at Omo Kuraz Sugar Company.
- The company is considering a urea production plant, contingent on Ethiopia’s natural gas development, to support agricultural productivity.
- Aliko Dangote is currently worth $28 billion, according to Bloomberg Billionaire Index estimates at the time of writing.
Dangote’s continued investment in Ethiopia underscores his long-term commitment to industrial growth in Africa and his confidence in the country’s economic potential.
