Dangote Cement's Investment in Nepal

1. Dangote Cement Plc Proposed Investment in Nepal 27 February 2014

2. Dangote Group The Dangote Group is a diversified conglomerate, headquartered in Lagos, Nigeria, with interests across a range of sectors in Africa. Current interests include cement, sugar, flour, salt, pasta, beverages and real estate, with new projects in development in the oil and Natural gas, telecommunications, fertilizer and steel. The Group focuses on provision of local, value-added products and services that meet the needs of the African population. Dangote Cement, the largest cement production company in Africa, with a market capitalization of almost US$14 billion on the Nigeria Stock Exchange, has subsidiaries in Benin, Cameroon, Congo, Ethiopia, Ghana, Nigeria, Serra Leone, South Africa, Tanzania and Zambia.

3. Nigeria is a growing economy and with its low cement consumption per capita base, it has significant growth opportunities. Per capita cement consumption (kg, log scale) GDP per capita (current US$) History shows that demand for cement rises rapidly when GDP takes off from a low base Per-capita GDP and cement consumption for a basket of emerging- market countries. 2020 2020 2 Nepal

4. Dangote has grown from a trading company into an international cement company in a short period of time 3 Early Years 1977-1997 Accelerated Growth 1998-2010 Institutional Expansion 2011 and beyond Emphasis on trading Emphasis on institutionalization and international expansion Emphasis on manufacturing In 1977 began trading in rice, sugar and cement, reinvesting the profits until he was able to venture into full-scale manufacturing - The Guardian Newspaper, UK we are still expanding. We are not slowing down at all. There is no economic meltdown. - Al. Aliko Dangote (Wall St. Journal, 2009) From an original small trading firm in 1977, the Dangote Group has grown to become a multi-trillion naira conglomerate, controlling 28% of the entire equities listed on the Nigerian Stock Exchange - Tell Magazine, Nigeria Aug 2011 we are going into something bigneed to spend $7.5billion in the next 4 years, so definitely we need a lot of concentration. - Al. Aliko Dangote (Reuters, 2012) 1977 1998 2011 Key Skills Required Entrepreneurship Deal-making Distribution network and logistics Raising financing Capital project execution Operations and Sales Distribution Corporate Centre capabilities (Strategy; portfolio management Performance management Talent management Dangote Group major business eras

5. A niche producer of cement with proven competence Largest producer in Nigeria and Sub-Saharan Africa Clear leader in Nigeria, Sub-Saharan Africas largest cement market 19mt capacity, delivering ca. 60% market share Three plants in excellent locations, supported by strong distribution Delivering superior financial performance FY 2011 sales: 235.9bn ($1.5bn); 56% EBITDA margin 8.6mt cement sold Strong operating cash flow - 164bn from operations (FY 2011) Modest Net Debt/EBITDA (1x) positions company for strong growth Strong ROE of 41% Highly efficient operations Largest plant, Obajana, achieving 100% utilisation (FY 2011) 12mt new, higher-margin capacity replaces imports to meet demand Largest company on Nigerian Stock Exchange Market capitalisation $13bn; ca. 28% of NSE LSE listing planned to comply with NSE rules; extra 20% stock 25% free float A bellwether on the African growth story 4

6. From 8mta production capacity in 2011, it has grown to 20.75 mta in 2012 and more than 50mta by 2015 5 FY 2011 8mt capacity Two plants in Nigeria, 8mt capacity Obajana 5mt Gboko 3mt Clear market leader, 50% share 50 depots, most extensive distribution Leading importer (from Far East) $1.5bn revenue $0.82bn EBITDA, 56% margin Ca.22% sales imported (lower margin) Modest net debt vs peers: $0.8bn High ROE 41% Capacity expansion underway Obajana: 5mt brownfield Ibese: 6mt new plant Gboko: 1mt process upgrades Senegal: 1.5mt new plant $3.9bn of additional capacity planned Fund with Nigerian cash flow Raise debt in local markets FY 2012 20.75mt capacity Nigerian capacity increased to 20.25mt Obajana 10.25mt Ibese 6mt Gboko 3mt Market share extended, ca. 70% Expanding depot network Margin gains from new capacity Margin gains as imports end Ibese serving high-growth South West Obajana opening new regional markets 1mt Gboko expansion due Q1 2013 1.5mt Senegal plant commissioned Convert Nigerian terminals for export Work begins on new Nigerian capacity Obajana +3mt by 2015 Ibese +6mt by 2015 Calabar +3mt by 2015 (TBC) Work underway on African capacity 15.0mt production, 8 countries 4.0mt import on ECOWAS coast FY 2015 51.0mt capacity $1.5bn revenue $0.82bn EBITDA Nigerian capacity 32mt Obajana 13mt Ibese 12mt Gboko 4mt Calabar 3mt (TBC) Fully operational in 15 countries 47.0mt production capacity (TBC) 4.0mt import on ECOWAS coast ECOWAS strategy fully operational Exporting across other African borders Operating in robust, growth markets Demand, deficits sustain pricing Well-diversified regional exposure Largest/major player in all markets Strong profitability, cash generation High barriers to entry Delivering high returns for shareholders Africas leading cement company An emerging global cement giant

7. 6 Tunisia Morocco Cape Verde Guinea-Bissau Senegal Mauritania Mali Burkina Faso Ghana Ivory Coast Liberia Guinea Sierra Leone Cameroon Central African Republic Nigeria Togo Benin Niger Chad Sudan Eritrea Djibouti Ethiopia Uganda Somalia Egypt Libya Algeria Mauritius Reunion Madagascar Kenya Tanzania Democratic Republic of the Congo Congo Gabon Angola Botswana Zimbabwe Zambia Malawi Mozambique Lesotho South Africa Swaziland Namibia The Gambia Western Sahara South Sudan Cape Town Pretona Harare Dar Es Salam Lusaka Luanda Nairobi Kampala Niamey Kano Abidjan Freetown Noukchott Bamako Port Harcourt Douala Yaounda Librevile Burundi Equatorial Guinea Rwanda Seychelles Integrated cement plant Grinding plant Import facility Current/planned Significant influence No/low influence Location Plant Type Capacity Mta Nigeria Integrated 35.3 Cameroon GP 1.0 Ethiopia Integrated 3.0 Gabon GP 1.5 Rep Congo Integrated 1.5 Senegal Integrated 1.5 South Africa Integrated 3.3 Tanzania Integrated 3.0 Zambia Integrated 1.5 51.6 Ghana Terminal 3.0 Sierra Leone Terminal 0.5 Cote d'Ivoire Terminal 1.0 Guinea Terminal 1.0 Liberia Terminal 0.5 6.0 Besides Nigeria, growth strategies and clear entrepreneur vision of the management have moved investments to other African countries with US$2.5bn committed

8. To take Dangote Group to its next level, the Group has targeted to grow our cement production capacities to 100Mta by 2017 Nepal

9. DANGOTE CEMENT TEAM AND H.E ANIL JHA; HONOURABLE MINISTER OF INDUSTRY, GOVERNMENT OF NEPAL

10. DIRECTOR STARTEGY AND BUSINESS DEVELOPMENT; DR. STANLEY KO AND CHIEF SECRETARY OF NEPAL GOVERNMENT; LEELA MANI POUDYAL, GOVERNMENT OF NEPAL

11. Key observations 1. Nepals economy has been growing at an average of 4.12%. The rate eased to 3.9% in 2011 and analysts have predicted further easing to 3.9% in 2013. 2. Easing of economy has not reduced cement consumption because of ongoing construction projects 3. The consumption of cement has historically outpaced production 4. Capacity utilization is low in the country 5. New plant capacities are expected to be added Nepal 6. Present (2013) cement demand is 4,000,000 MT estimated 7,000,000 MT by 2017 7. Estimated 2013 Clinker home production is 1,000,000 MT only. 3,000,000 MT deficit in 2013

12. Nepals economic growth of 3.9% (WB,2011) is below the Developing Asias average, while inflation has been high 1/15/2015 11 Nigeria (2011) Nepal(2011) Geography Area (km2) 924,768 147,181 Capital Abuja Kathmandu Demography Population (million) 152.6 30.4 Denisty (Inhab/km2) 165 Urbanisation (%) 47 17 Economy GNI per capita (US$) 1,940 540 Currency Naira Nepalese Rupee US$ Exchange (2012) 0.0063 0.0114 Per capita cement consumption (kg) 97 75

13. 1/15/2015 12 Consumption has been outpacing consumption Consumption has been driven by: Public investments Private investment Consumption expected to be driven by investments in High rise buildings Roads and bridges expansion Hydro power projects

14. Nepal Foreign Investment Policy Foreign Investment is welcome in Nepal 100 % foreign owned enterprises permitted Permitted to repatriate the equity investment, benefits, dividends, principal and interest of foreign loans Government- assured security of investment Number of tax benefits are entitled including income tax and others

15. Process for Investment in a New Industry Documents required: Project Report Three copies Certificate of Incorporation including Memorandum of Association and Article of Association Company Profile Financial Credibility Certificate (FCC)provided by a home country bank Authority Letter from the company to carry out necessary work on its behalf

16. Limestone Mines in Nepal A score of limestone deposits of various grades were discovered across the country Most limestone lie along the southern margin of midland zone which has good cement grade limestone Only few deposits are being explored at the moment There are over 1,000,000,000 MT limestone identified across the country

17. DANGOTE PLAN IN NEPAL Invest to establish two Cement Production Plant; East and West Nepal Each has the capacity to produce 6,000 MT/Day and acquire 200,000,000 MT limestone Mine First Phase Investment and erection of One Plant (2.1 Million MT/Annum

18. DANGOTE JOURNEY SO FAR Visit high level missions three times in 2013 and two times in 2014 Applied for FDI in February 2013 Submitted Feasibility Study report in April 2013 Check out the Mines and did detailed technical studies in Dang, Dhading and Makwanpur districts. Received Approval from FDI in Cement Industry for investment of $550,000,000 (Five Hundred and Fifty U.S. Dollars only) in November 2013 from The Investment Board of Nepal Now in the process of registering at the Company Registrars Office and other departments in Nepal

19. ISSUES/CHALLENGES Delay in Approval process (8 months instead of the committed 2-3 months Delay in process at the Investment Board and relevant Government Authority Assurance from high level authority but no real support from the officials at execution level No one door system/policy as assured

20. DANGOTE CEMENT NEPAL LIMITED Project completion by 2017 6,000 MT per day production (120,000 of 50kg Cement) 1000 direct employment and 5000 indirect employment Towards self sufficient cement production in the country