01/04/2021 Emerging Senegal

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Emerging Senegal

By ICR Research
Published 10 September 2019

Tagged Under: Senegal Supply & Demand production exports import trade

Senegal, home to one of west Africa’s largest cement industries, is a nation on the rise. Long-term
political stability has resulted in sustained economic growth. Looking ahead, President Macky
Sall’s government is pursuing an ambitious development strategy supported by important new oil
and gas investments. This will help to ensure domestic cement demand is able to sustain the
cement industry and its three integrated producers.

Robust growth in Senegal’s cement demand is expected to help the domestic industry to thrive in the years ahead

Senegal is home to one of west Africa’s most dynamic cement industries. The country is one of only a few in the
region to be endowed with rich limestone deposits, making it the largest integrated cement producer in the region after
Nigeria, and a key exporter to surrounding markets. The country is a major supplier of cement to Mali, its landlocked
eastern neighbour, in addition to Mauritania to the north and Guinea-Bissau and Gambia in the south.
Economically, Senegal enjoys a high degree of integration in the region. It is one of the eight mainly francophone
states that make up the West African Monetary and Economic Union (UEMOA), and with which the country shares its
currency, the west African CFA franc (XOF). Its regional integration is further enhanced by its membership of the
Economic Community of West African States (ECOWAS), which includes other major regional economies such as
Ghana and Nigeria.

Political stability and sustained economic growth

Senegal benefits from its successful democracy and has enjoyed a high level of political stability for decades. This
has provided a basis for sustained economic growth, with GDP expanding annually since the mid-1990s and by over
six per cent annually since 2014.
Despite this, Senegal is still a lower income country with a GNI per capita of just US$1410, with one third of the
population living below the poverty line, according to the World Food Programme. In terms of overall GDP, the

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economy is relatively small at US$24bn, around a third the size of Ghana (US$65.5bn) and dwarfed by that of Nigeria
(US$397bn).
The economy is still driven primarily by agriculture, while the main foreign exchange sources are from fisheries,
phosphates, tourism and services. The industrial sector remains underdeveloped, with cement being the only major
industry in the country. According to the IMF, the provision of critical infrastructure and reforms to improve the
business environment are key obstacles holding back Senegal’s growth.

Emerging Senegal
In spite of these challenges, Senegal is at the start of a new era of development. The country recently returned Macky
Sall to a second presidential term after peaceful elections in early 2019. Under President Sall, the country has
adopted the Plan Sénégal Emergent (PSE), an ambitious economic reform and investment programme designed to
kick-start Senegal’s development and modernise the country by 2035.
Under the PSE, economic zones are being set up to support
agrobusiness, industry, information technology and other
services. A modern city is under construction at Diamniadio,
40km from the congested capital of Dakar, and will combine a
new seat for government ministries, a university and industry
with housing for 350,000 people.
Above all, Senegal’s physical infrastructure requires massive
investment, including water supply, transport and housing,
along with basic utilities such as power and water. At Diamniadio, a modern city is under
construction with a new seat of government
With electricity prices among the highest in the world,
improving access to electricity is a major focus of investment.
Senegal also stands to benefit greatly from the West African Power Pool, which aims to integrate power supply across
the ECOWAS economic community, transforming access to power for countries such as Senegal.
A number of road construction projects are underway, adding
an estimated 187km of new highways in 2018, alongside
improvements to over 1000km of the tertiary road network.

A new US$520m bulk materials port is under construction at

Bargny-Sendou, which will be capable of handling 12Mt of
goods every year, and greatly relieve pressure from the
highly-congested Port of Dakar.
A new bulk materials port is being built at
Bargny-Sendou as the country’s transportSupporting this increasing level of investment is Chinese
infrastructure requires significant investment
capital. Going forward there is also a great natural wealth in
the form of major offshore oil and gas reserves, known as the
Greater Tortue Ahmeyim development, which are set to start production in 2022 and provide revenues for decades to
come.

Robust growth of domestic cement demand

All of this activity is generating substantial demand for cement, with domestic consumption climbing to 4.25Mt in 2018,
up six per cent on the previous year. This translates into a per capita consumption level of around 260kg for Senegal’s
population of 16.3m and is at the upper range of other west African nations (Benin 207kg, Gambia 255kg, Ghana
192kg, Nigeria 118kg and Mali 145kg).
While the major initiatives related to the PSE will drive activity in the economy and play an increasing role in driving
construction activity and cement demand, it is the residential sector that currently dominates consumption,
representing an estimated 90 per cent of domestic cement sales. As in much of west Africa, where access to banking
and financial products is low, household savings are primarily in the form of non-financial assets, above all land and
buildings. This is one of the reasons for the ubiquitous sight of so many unfinished houses, often bare concrete

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structures with steel rebar protruding. This is where individuals gradually ‘save’ by incrementally building their home
on a small plot, brick by brick, wall by wall, over a number of years.

Table 1: cement demand, production and trade in Senegal, 2018-19E

2018A 2019A

Consumption (Mt) 4.250 4.380

Change (%) +6.0 +3.0

Production (Mt) 6.783 6.876

Exports (Mt) 2.533 2.497

Imports (Mt) 0.764 0.369

Source: Dangote Cement Senegal, 2019

Cement production base

Senegal’s cement production base consists of three companies operating 7.9Mta capacity, across three plants located
within a 60km radius of the capital Dakar, with a population of 2.48m.
Sococim Industries, a subsidiary of Vicat (France), operates the largest plant – a 3.4Mta unit at Rufisque. The facility,
which consists of three kilns amounting to 7000tpd nominal capacity, reportedly suffered technical issues in the first
half of 2019, causing a temporary market shortage, although this has since been resolved. The company is currently
investing in a 6.9MW solar power plant, supplied by Urbasolar (France), over a surface area of 14.3ha which will
reduce Sococim’s CO2 emission by 10,000tpa. The company is already replacing fossil fuels with alternative energy
sources, currently biomass for kiln firing.

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The country’s domestic cement production base consists of three companies, which operate 7.9Mta of capacity

Les Ciments du Sahel SA, controlled by local Group Fauzie Layousse, owns Senegal’s second-largest cement plant.
Located at Kirène, the 3Mta works operates two lines with a clinker capacity of 5350tpd. The company gained market
share at the expense of Sococim in the 1H19, and reportedly imported clinker to serve the additional market demand.
The West African Development Bank has approved a XOF25bn (US$42.7bn) loan to help fund a third production line
at Kirène, which could add another 2.7Mta of capacity, if it goes ahead.
Dangote Cement Senegal SA (DCS) is the most recent market entrant and operates a 1.5Mta integrated plant in Pout,
around 50km from Dakar. The facility was one of Dangote’s first foreign investments but also one of the most
troublesome to get off the ground. Although construction of the facility was largely completed in 2012, legal wrangling
over land ownership issues and a lack of power supply delayed production until 2015. But the plant is now sold out
and the option to add further capacity has been explored by the company, although there are no current plans.

Exports
Senegal is one of the few west African countries to have rich limestone deposits suitable for cement manufacture. As
a result, the industry has become a major regional supplier of cement, with an estimated 2.5Mt exported in 2018.
The landlocked market of Mali is by far the largest consumer, taking an estimated 1.85Mt of cement from Senegal in
2018, amounting to around 65 per cent of overall demand. Sococim and Ciments du Sahel are the main suppliers to
the Mali market.
The remaining export volumes from Senegal are directed towards Mauritania in the north, Gambia, Guinea-Bissau,
followed by smaller informal flows to Guinea and beyond.

A tour of Dangote Cement Senegal's Pout plant

Senegal’s most recent addition to the domestic production base, Dangote Cement Senegal (DCS) began
operations at Pout on 1 January 2015. The integrated cement plant represents an investment of
US$300m and is equipped with a single 3500tpd kiln line with a cement capacity of 1.5Mta. Within four
years, the company has established itself as a major player in the Senegalese market.

Quarry operations
The plant is supplied by a 1007ha limestone quarry with a 300Mt reserve, sufficient to supply the existing
plant for 125 years of operation. The deposit is composed of a limestone sufficiently soft for surface
mining, which is carried out by a pair of Wirtgen 2500SM surface miners equipped with dust suppression

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systems working alongside a Caterpillar backhoe excavator. The surface miner cuts, crushes and loads
the material in one single machine pass.

The quarried limestone is loaded by Caterpillar 988H wheel loaders into a fleet of Terex TR60 rigid dump
trucks and transported to the 700tph thyssenkrupp hammer crusher where it is reduced in size to
<75mm. The quarry can produce crushed limestone at a rate of 12,000tpd.
Meanwhile, the other clay and laterite raw materials are supplied from a 359ha quarry at Tchiky, located
some 65km from the plant, and processed by a 200tpd Sinoma additive crusher.
The crushed limestone and other raw materials pass through the crossbelt gamma analyser for raw mix
control and are then transported by a 3.5km conveyor belt to the covered raw materials storage shed at
the factory site.

Table 2: main equipment and capacities, DCS Pout

Equipment Type and capacity Supplier

Limestone crusher 700tph thyssenkrupp (Germany)

Additive crusher 200tph Sinoma (China)

Online analyser 700-900tph CBX (USA)

Vertical raw mill 225tpd Loesche (Germany)

Preheater 5-stage, RF5/3000 Sinoma (China)

3 support, dia 4.2m x 60m

Kiln Sinoma (China)
(3500tpd)

Burner Novaflam –7.5-9tph max Pillard (France)

Pendulum grate cooler –

Clinker cooler IKN (Germany)
3000tpd

Clinker bucket conveyor Dept-42 – 25tph Aumund (Germany)

Vertical roller mill –

225tpd Loesche (Germany)
cement

Rotopacker 120tpd Haver & Boecker (Germany)

ID Fans 480,000–552,000m3/h Venti Oelde (Germany)

VRM drives – raw mill 2460kW Loesche (Germany)

VRM drives – cement mill 4650kW Loesche (Germany)

VRM drives – coal mill 400kW Loesche (Germany)

Robot lab XRF/XRD Robot ARL9900 FLSmidth – ARL

Cement silos 4 x 7000t Sinoma (China)

Power plant

Captive power plant Cethar Limited (India)

Boiler 2 x 65tph DCPL (India),

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Steam turbine 1 x 30MW Qingdao Jieneng (China), Groupe Co

Ltd (China)

ABB (Switzerland/Sweden);
Power plant central control Woodward (control system); Bentley
room (monitoring system of turbine
vibration, UK).

Raw material grinding and homogenisation

This part of the production process includes grinding and blending of the raw material. Raw mix, laterite,
clay and high-grade material are taken from the stacker reclaimer to the respective hoppers to the
proportioning station. They are then fed into a 225tph (nominal capacity) Loesche vertical roller mill
(VRM) to be ground to a fine powder of 10-12 per cent residue on 90µm size. Hot gas is taken from the
kiln exhaust into the vertical raw mill to remove the surface moisture of the raw material and increase the
output.

Pyroprocessing
The raw meal is subsequently fed from the 10,000t homogenisation silo to the five-stage RF5/3000
Sinoma preheater and the 3500tpd, three-support kiln (4.2 x 60m).

Ash from the coal power generation plant is added to the clinker raw mix, impacting favourably on the
production costs (reduced by around EUR1/t).
The clinker exiting the kiln is cooled by an IKN 3000tpd pendulum clinker cooler and conveyed in a deep
drawn bucket conveyor supplied by Aumund (Germany) to the 30,000t clinker silo. An hourly clinker
sample is drawn automatically by the FLSmidth ABB 2400L IRC5 Robot system for quality control by
XRF/XRD analysis.
The plant is also equipped with waste heat recovery power generation.

Dangote Cement Senegal’s cement plant at Pout represents a US$300m investment

Cement mill and packing

The clinker, gypsum and high-grade limestone are reclaimed from a storage and proportioning station to
the 225tph Loesche VRM. Hot gas is taken from the kiln exhaust to the VRM to remove surface moisture
of the raw material.

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The main product produced for the Senegal market is a CEM II 32.5 cement, which is primarily used for
residential construction and accounts for a market share of 80 per cent. Dangote also introduced a
higher-strength 42.5 cement into the market, which is used mainly for the manufacture of concrete
products.
The finished cement is stored in two 7000t capacity cement silos, allowing multiple products to be stored
and loaded in bags, although this only accounts for 10 per cent of production. A further two new silos
with a capacity of 6000t each to allow for the storage of new products are in the commissioning phase.
Around 90 per cent of the cement produced is packed in kraft paper sacks by Haver & Boecker
Rotopackers, each with 120tph capacity, and sold ex-factory.

Power supply
Due to the unreliable power supply from the grid, DCS opted to construct its own 30MW coal-fired power
plant to supply the factory. The power plant was supplied by Cethar Ltd (India), Qingdao Jieneng (China)
and Groupe Co Ltd (China). A surplus 12MW of power can be generated, and sold back to the public
electricity company, SENELEC, to supply the local community.

The logistics of importing coal are complex, with Senegal’s main bulk terminal at the Port of Dakar
frequently suffering from delays which can affect shipments and incur hefty demurrage fees. In 2018,
when DCS imported six 40,000dwt vessels with coal to serve the power station and the kilns, delays at
port resulted in demurrage fees amounting to US$1.5m, equating to an additional US$1.25/t produced.
On the plus side, the ash from the coal power station is a valuable raw material that can be integrated
into the final cement process.

Inside view – Luk Haelterman, Dangote Cement Senegal

To understand the local market more fully, ICR spoke with Luk Haelterman, country head for Dangote Cement
Senegal (DCS). Mr Haelterman arrived in Senegal in 2014, not initially as a cement expert but as an Africa specialist
with proven multi-sector experience in helping businesses succeed.
He was parachuted in to solve the problem of the Senegal plant, which although built, had not operated since
construction was completed in 2011-12, due to the lack of energy supply to the plant and various legal issues over
land ownership that held up the operating permits. Having resolved these obstacles, DCS has rapidly become a major
player in the market: “We were market leader in August, in eight months from start-up, and now we are working
almost at full capacity.”
While this may sound like business was easy, a great many
challenges have been faced along the way. Some simple, yet
critical, decisions relating to the product were made early on.
“When I came, I changed the product,” explains Mr
Haelterman. “Dangote Cement usually sells 42.5 in west
Africa, but in Senegal the market prefers 32.5, so we
focussed on this. Dangote usually uses plastic sacks for
cement, but in Senegal, paper is preferred. So we made
these changes.”
Coal is critical to DCS operations: not only does the plant use
coal to fire the kiln, but also to fuel the captive power station.
Cost control is a major issue, and rising coal prices have been Luk Haelterman, who leads Dangote Cement Senegal
a severe challenge: “We are using around seven vessels a
year, each of 40,000t,” says Mr Haelterman. “It is a headache. There is only one quay that has a draught sufficient for
a 40,000dwt vessel. It can take 10-45 days! Last year we paid US$1.5m demurrage.”
Operationally, DCS is one of the best performers in Dangote Group’s portfolio, as evidenced by the awards adorning
the entrance hall, recently picked up from an internal meeting in Lagos. This success has enabled DCS to integrate
fully into the local economy. “Out of 250 expats, we are now just 15 expats working here, out of a full workforce of

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1000 (with around 300 Senegalese on our own payroll),” explains Mr Haelterman. “Here, we train people ourselves. It
is a key aspect of sustainability and local integration. We’re a sustainability champion for Dangote.”

Turning to the local market, Mr Haelterman is cautious, noting that in spite of the strengths of the country, the pace of
development is weaker than he would hope. “There are a lot of minerals in Senegal, but a society-wide structure to
use them is not yet there,” he argues, adding: “There is no movement from the lower class to the upper class. It is like
Europe in the years before industrialisation, with wealth concentrated in the upper class.”
Senegal cement demand has grown at a sustained pace for years. Does he think the rate of demand growth will
persist going forward? “Senegal is already at 260kg per capita, which is high for Africa. So will the country maintain 6-
7 per cent annual growth? I doubt it. It will be difficult.”
The key challenge for Senegal, in his view, will be driving an economic expansion that is rapid enough to provide for
the country’s burgeoning population. The current population of 16.3m is projected to more than double to 34m by
2050. “Senegal’s population is growing by 500,000 every year. The increase in employment is 60,000. Do not tell me
that the earnings per capita will increase. If they do not have money, how will they build? However, the high rate of
population growth is a challenge for the whole of Africa, not just Senegal,” says Mr Haelterman.
For the cement sector, income levels are still too low for the country cement consumption to ‘take off’. “Urbanisation
growth was high, but if your average income does not follow, it will not translate into demand [for housing],” he
explains. “The mortgage system is non-existent. The middle class is not developed. To create a middle class you
need industry – where is the industry? According to official sources, over 80 per cent of the economy is informal.
Therefore, income for the government is very low, as it cannot be taxed. So the government does not have a lot of
room to manoeuvre.”

On the supply side, Mr Haelterman highlights the issue of cost pressures which have not been sufficiently balanced by
cement prices. They stand at around XOF45,000/t (US$70/t), but have not seen any significant increase since 2008,
partly due to government controls – and partly due to increased competition and supply. The latest move to impose a
new ‘cement tax’ is one step too far. “The government has recently introduced a cement tax, XOF3000/t, not to the
consumer – to us producers!” says Mr Haelterman. “The government now has to do something. You cannot make a
profit if your costs keep rising, but your prices do not go up,” he argues. “We are the most modern of the three
installations in Senegal, it is managed probably as well as the others. So we make profit, but not enough to defend our
investment.”
On the positive side, Senegal’s competitive cement industry is strong enough to hold its own in the regional market
where it is the supplier of choice for its neighbouring markets and locally the market is well defended by the
competitive pricing, which makes imports unviable. Provided the regional markets hold up going forward, Senegal’s
cement industry will continue to thrive.
This article was first published in International Cement Review in September 2019.

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