In 2008, the names of Alhaji Aliko Dangote and a few other Nigerians appeared on the FORBES billionaires’ list. Dangote’s fortune was pegged at $3.3 billion. When the rankings were made a year later, his fortune dropped to $2.5 billion and plunged further to $2.1 billion the year after. By 2011, after he had taken Dangote Cement public, his fortune surged 557 per cent to $13.8 billion.
In 2012, he dropped to $11.2 billion, but rebounded at $20.1 billion this year. Since March, his fortune has jumped another 30 per cent. He is now the richest man in Africa and the 25th richest in the world. Dangote, whose cement manufacturing concern is on its way to becoming the largest in the world, has announced his plans to go into petroleum refining. He may well be on his way to becoming the No. 1 moneybags in the world. Or, what is he up to? HASSAN GIMBA AHMED writes:
Aliko Dangote was born in Kano, Nigeria, on April 10, 1957. Born into a rich Muslim family, he had an eye on cutting his teeth in his own corner. While in primary school, he discovered the incurable desire for sweets by the other children and began selling cartons of sweets, just to make money. He would buy from huge shops and sell to the children in his school. He had no use for the money, yet he stockpiled it. “I was selling the sweets just to make money, because I was so interested in business even at that time,” he recalled.
After finishing his secondary education, the young Dangote was shipped off to Cairo’s Al Azhar University where he bagged a degree in business methods. With some knowledge of the world added to his natural business savvy, Dangote returned to Nigeria to work with his maternal uncle Sanusi Abdulkadir Dantata. When he turned 21, Dangote was good to start and on his own. His uncle, who had become somewhat of a business tutor, loaned him N500, 000 with his blessings.
Dangote began trading in commodities like cement, flour, sugar, rice, fish and later pasta and its byproducts.
By the early part of the 21st century, he had delved into full production of these items. He also added freight and food processing; he went ahead to build the Dangote Group, West Africa’s largest publicly-listed conglomerate. His interest covers sugar refineries, salt processing facilities and Dangote Cement, the continent’s largest cement producer. Dangote Group brokered deals which made his group the major sugar supplier to the country’s soft drink companies, breweries, and confectioners.
Today, the Group exports cotton, cashew nuts, cocoa, sesame seeds and ginger to several countries. It also has major investments in real estate, banking, transport, textiles and oil and gas. The Dangote Group employs over 11,000 people, a figure expected to double in the next three years. It has become the largest industrial conglomerate in the whole of West Africa. In January 2009, he was honoured as the leading employer of labour in the Nigerian private sector.
In 2000, the Group acquired the Benue Cement Company from the federal government and, in 2003, commissioned the Obajana Cement Plant, the largest cement plant in sub-Saharan Africa.
A believer in home-grown investments, Dangote is on the verge of branching into telecommunications and has started building 14,000 kilometres of fibre optic cables to supply the whole of Nigeria.
Nigeria’s richest man
By mid-2000, Dangote had established his roots and was ready to expand. His burgeoning conglomerate branched into Benin, Liberia, Sierra Leone, Cameroon, Togo, Ghana, South Africa and Zambia.
When his name first appeared on the Forbes billionaires’ list, in 2008, Dangote was acknowledged as Nigeria’s richest.
Africa’s richest man
Dangote rallied his investments and his fortunes surged to $13.8billion in 2011, after he took Dangote Cement public. More diversifications caused him to drop down the Forbes pecking order; he dropped to $11.2 billion in the 2012 rankings. An astute business brain, he was dropping to rise and thus was climbing gradually on the path to fulfilling his dream of becoming Africa’s richest man.
By March 2013, when Forbes released its billionaires’ list, the Nigerian merchant had become Africa’s richest man with a net worth of $20.1 (USD). Since then, though, his fortune has jumped another 30 per cent. He is also the world’s 25th richest man and Africa’s first $20bn-mark man. Dangote has climbed over Russia, South Africa, and Egypt’s richest men. There is no telling where he will be when the list is released next year; the likelihood of him falling down the pecking order is quite slim.
Yet, despite its burgeoning portfolio and numerous philanthropic activities, the Dangote Group is buying up more business interests and stretching its empire farther and wider into new business mergers and partnerships.
Some ongoing projects have been earmarked as some of the Group’s biggest push towards consolidation: Plans for the production of 2.5 million metric tonnes of methanol, 900,000 metric tonnes of polypropylene, 450,000 metric tonnes of polopropylene, and 125,000 metric tonnes of butadene are all at a mature stage.
There are also plans for integrated manufacturing of tomato paste at Ibese, Ogun State. Given the Group’s success rate, it is almost a given that when this does come afloat, it will dwarf all other products in the market.
In April, indications emerged that plans for an $8bn-worth oil refinery had reached advanced stages. The refinery, it was gathered, will be located at the Olokola Free Trade Zone, Ondo State.
The refinery, with capacity for around 400,000 barrels, will be ready by late 2016. This refinery has been touted as the answer to Nigeria’s current poor refining strength.
When this refinery comes fully on stream, Dangote and his group of companies would have formed what could be termed “ALTERNATIVE GOVERNMENT” as the Group would have fully taken over ALL facets of activities hitherto undertaken by government.
Dangote Cement, the Group’s largest branch-out, is the largest cement production company in Africa with a market capitalisation of almost US$14 billion on the Nigerian Stock Exchange. The cement plant has subsidiaries in Benin, Cameroon, Ghana, Nigeria, South Africa and Zambia.
In December 2010, the Group signed an agreement with the government of Zambia to construct a US$400 million cement plant in Zambia. The plant, which will be completed this month, is expected to have an annual output of 1.5 million metric tonnes of cement.
In 2012, the company produced around 10 million metric tonnes of cement, with revenues of US$1.8 billion. As of 2013, Dangote Cement had a market capitalisation of $15 billion. In 2012, Forbes Africa named Dangote Cement as one of the top five listed companies in West Africa.
Dangote Cement is Nigeria’s largest cement producer with three plants in Nigeria and plans to expand in 13 other African countries. The company is a fully integrated quarry-to-depot producer with production capacity of 19.25mmtpa (million metric tonnes per annum) in Nigeria at the end of 2012. The company plans to build a further 19mmtpa of production, grinding and import capacity across Africa expected to be operational by the end of 2015.
Dangote Cement’s Obajana plant in Kogi State, Nigeria, is the largest in sub-Saharan Africa with 10.25mmtpa capacity across three lines and a further 3mmtpa capacity currently being built. On February 9, 2012, the firm opened a $1 billion cement plant in Ibese, Ogun State. The facility is capable of producing 6 million metric tonnes of cement per year, raising the company’s total production by 40 percent at the time. The plant was installed by the Chinese construction and engineering firm Sinoma and represents one of the largest non-oil investments in Nigeria. The company’s Gboko plant in Benue State has 3mmtpa capacity with an upgrade to 4mmtpa planned in 2013.
Current plans are for integrated or grinding plants in Cameroon, Ethiopia, Gabon, Republic of Congo, Senegal, South Africa, Tanzania and Zambia as well as import/packing facilities in Ivory Coast, Ghana, Guinea, Liberia and Sierra Leone.
It is evident that Dangote is looking beyond the Forbes’ list. He has plans to create a business legend, an empire, a mammoth-like conglomerate, a dynasty. The implication for the Nigerian employment market can only be imagined. Aliko Dangote invested US$6.5 billion in the company between 2007 and 2012. Cement accounted for roughly 80 per cent of Dangote Group’s business as of 2011.
One reason Dangote has been able to build an enviable business empire is because he has not shied away from treading where others dare not. He has discovered the monopoly which owning a refinery will give him, and he moved to do just that early this year. The $8bn-worth oil refinery has been largely touted as the answer to Nigeria’s current poor refining strength.
But the magnate knows what he is up against. He told Reuters sometime in March: “This will really help not only Nigeria but sub-Saharan Africa. There has not been a new refinery for a long time in sub-Saharan Africa.
“The people who were supposed to invest in refineries, who understand the market, are benefiting from the absence of refineries, because of the fuel import business. Some are going to try to interfere.” The business mogul secured a loan of $4.25bn (some from Nigerian banks, others from two offshore banks) to actualise his plan.
However, if all goes as planned, with government refineries almost non-existent, Dangote will have a vice-like monopoly over the consumption of Nigeria’s 173 million people and he could be like a sprawling government.
As with most successful businessmen who have the nose to smell out opportunities, Dangote is sure to seek a “pioneer status” for this start-up that would attract a five-year tax holiday.
But the most immediate gain is that this foray into oil and gas refining may see Alhaji Aliko Dangote (GCON) sitting comfortably on top of the Forbes pile as the world’s richest man.
This is the plan. This will surely make our own Dangote the richest man to walk through this world in our time. Surely, since there is very little for us to celebrate, this calls for clicking of glasses in future. It would be gratifying to learn that we all have not been failures: at least one of us would be the richest in the world.
Source: leadership paper