Abuja, Nigeria: In a regulatory filing with the Nigerian Stock Exchange at the weekend, Dangote Cement Plc board of directors stated that it has notified South Africa’s largest cement maker, PPC, board of directors that it no longer has an interest in acquiring it’s share capital.
Dangote Cement had last month confirmed that it had initiated a bid to acquire the entire share capital of PPC Limited. It, however, noted that the acquisition talks were still at the preliminary stage and the transaction remained a potential one, contrary to reference to the talks in some quarters as ongoing.
The approach by the company owned by Aliko Dangote, Africa’s richest person, followed a joint offer from Canada’s Fairfax Financial Holdings Ltd. and domestic rival AfriSam Group Pty Ltd, signaling the start of a possible bidding war for South Africa’s biggest cement maker. While PPC Limited will consider all bids, the Public Investment Corp., its largest shareholder, supports a tie up with AfriSam and Fairfax, people familiar with the matter said this week.
PPC Limited is the holding company for a group of companies which manufacture and distribute cement, lime and limestone products throughout South Africa. The Group also manufactures and supplies paper sacks and containers for use in the cement and other industries. In addition, PPC has investments in businesses supplying cement based products.
Established in 1892 as De Eerste Cement Fabrieken Beperkt, PPC is a leading supplier of cement and related products in southern Africa. It has 11 cement factories in South Africa, Botswana, Democratic Republic of Congo, Ethiopia, Rwanda and Zimbabwe.
With annual capacity of 11.5 million tonnes of cement products, PPC’s materials business comprise Safika Cement, Pronto Readymix (including Ulula Ash) and 3Q Mahuma Concrete. Its footprint in the readymix sector has grown to include 26 batching plants across South Africa and Mozambique.
Also, PPC produces aggregates; with its Mooiplaas aggregates quarry in Gauteng, having the largest aggregate production capacity in South Africa. PPC Lime, one of the largest lime producers in the southern hemisphere, produces metallurgical-grade lime, burnt dolomite and limestone.
PPC is closely linked to the growth and development of South Africa as it has produced cement for many of the country’s most famous landmarks and construction projects.
Canadian company Fairfax Financial Holdings Limited (TSX:FFH) (TSX:FFH.U) is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and investment management.
AfriSam (South Africa) Proprietary Limited manufactures and supplies construction materials. The company offers all purpose, eco building, high strength, rapid hard, and road stab cements, as well as slagments; concrete premixes; and plaster, building, and screed mixes. It also provides foundation, suspended slab, surface bed, post tension, retainer, and customized mixes, as well as specialty products and pumping solutions; and aggregate products, such as road stones, concrete aggregates, road layer works materials, and specialty aggregates. In addition, the company provides technical services. It serves architects, engineers, home builders, and DIY enthusiasts in Southern Africa.
Dangote Cement is a fully integrated cement company and has projects and operations in Nigeria and 14 other African countries; Dangote Cement’s current total production capacity in Nigeria from its three existing cement plants namely Obajana (10.25MMTPA), Ibese (6.0MMTPA) and Gboko (4.0MMTPA) is 20.25MMTPA. The Obajana Cement Plant (OCP) located in Kogi State is reputed to be one of the single largest cement plants in the world with a combined capacity of 10.25MMTPA. A fourth line which add 3.0MMTPA to the existing capacity will bring the total capacity of Obajana to 13.25MMTPA by 2015.
Dangote Cement Plc, is Nigeria’s most capitalized quoted company and also Africa’s largest cement producer.
Two global rating agencies, Moody’s Investors Service and Global Credit Ratings (GCR), recently rated Dangote Cement high for its financial strength and corporate outlook. In rating reports, both global rating agencies described the outlook of the Africa’s largest cement producer as stable.
Moody’s assigned three respective high ratings to the cement company, including a first time Ba3 Local Currency Corporate Family Rating (CFR), Ba3-PD Probability of Default Rating and Aaa.ng National Scale Rating (NSR).
Global Credit Ratings assigned long-term and short-term national scale issuer ratings of AA+ (NG) and A1+ (NG) respectively to Dangote Cement.
Assistant Vice President and Lead Analyst for Dangote Cement at Moody’s, Douglas Rowlings, said the ratings reflected Dangote Cement’s “strong standalone credit profile and track record of demonstrated financial support from a larger and more diversified parent, Dangote Industries Limited”.
Chief Executive Officer, Dangote Cement Plc, Onne van der Weijde, noted that the ratings highlight the financial strength the company had achieved through unwavering focus on the profitable expansion of its business.
Dangote Cement is also the biggest quoted company in West Africa and the only Nigerian company on the Forbes Global 2000 Companies.