AFRICANGLOBE – Worth a staggering $11.2 billion, Aliko Dangote is the richest man in Africa and amongst the richest 100 people in the world. A commodities titan who is also a cement king, his business interests continue to expand.
He is also a philanthropist who has given away millions to education, health and social causes, notably giving $600 to each person displaced by the post-election violence in Nigeria. We look at five important lessons that can be learned from Dangote’s success.
Dangote Cement set itself an ambitious target of producing 60 million metric tonnes of cement from all its plants, a target that now looks like it will be met in the next three years. Its six million metric tonnes plant in Calabar, Rivers State, is almost complete and primed for operations. Should Dangote achieve his target, as it looks he will, it will make Dangote Cement the largest cement producer in the world. A new line at the giant cement plant in Obajana, in central Nigeria, has also been commissioned.
Expand and Diversify
Dangote’s interests do not lie solely in cement, and neither are they restricted to Nigeria. His business interests spans across Africa and sectors such as cement, oil and gas, flour, sugar and textiles. He has invested $4 billion to build a new cement facility in the Ivory Coast and is building a $115 million cement plant in Cameroon, plus owns plants in Zambia, Senegal, Tanzania and South Africa. He has reiterated plans for this expansion to continue at an even greater pace, planning for Dangote Group to invest $7.5 billion in its expansion strategy over the next four years.
According to Dangote, the company is going into “something big”.
“We need to spend $7.5 billion in the next four years. So, definitely, we need a lot of concentration,” he said.
Patriotism and Cultivation
Dangote’s careful cultivation of successive presidents over three decades has played an important role in expanding his empire, which has inevitably caused some resentment towards him. These close links with those in power continue to this day, with Dangote maintaining a close relationship with president Goodluck Jonathan. Jonathan awarded Dangote with the second-highest honour in Nigeria, the Grand Commander of the Order of the Niger, last year.
Yet he has also given back to his country. “I don’t think that any of them have even done 5 percent of what Aliko Dangote has done for this country,” Jonathan has said of him. He employs more than 11,000 people, far more than any other non-state company. He is also one of the country’s biggest cheerleaders, describing Nigeria as “the best place in the world to invest”.
He listed his cement company on the Nigerian Stock Exchange in late 2010, and it has become the largest company on the exchange. He is now forging ahead with plans for a listing on the London Stock Exchange next year, a market capitalisation that he hopes will raise $35-40 billion for his company, which will be used to pay off investors, including himself. In a difficult global environment for share offerings, Dangote said he was not discouraged by the tumble in Facebook’s shares since they listed in May.
“Where the assets of Facebook were hype, we have real assets,” said Dangote, setting out the market capitalisation he expected for his firm at the listing planned for late next year. If he raises as much as he hopes, it would value Dangote cement at much more than rival Lafarge, which has a market capitalisation of around 9 billion euros ($11 billion).
Believe in Africa
Dangote acknowledges that there are risks in investing in Africa, but strongly believes that it is the place to make money. “The opportunities are here, the growth is here,” he has said. “Where else do you get this type of growth? Maybe Asia, but the difference we have from them is that we are starting from a low level. The return on investment takes out the risk.”
He has signed contracts to build plants or terminals in 13 countries across Africa, and he is also not afraid of looking at acquisitions in Egypt.
“Somebody said “why, with all this turmoil?” But the brothers [Muslim Brotherhood], the fundamentalists, they too need jobs. They will be crazy to close down a factory.”
“Foreigners will not invest if locals are not doing so. We must lead or nobody will come. The economy of America was not established by the Chinese.”
By; Tom Jackson