Aliko Dangote Africa's Richest Billionaire from Nigeria Cement and Diversified Industries

MTV Base Meets Aliko Dangote with MTN from MTV Base on Vimeo.

Aliko Dangote (born April 10, 1957) is a businessman based in Nigeria. He is the owner of the Dangote Group, which has operations in Nigeria and several other countries in West Africa. A wealthy supporter of erstwhile President Olusegun Obasanjo and the ruling People's Democratic Party (PDP), Dangote controls much of Nigeria's commodities trade through his corporate and political connections. With an estimated current net worth of around US$3.3 billion, he was ranked by Forbes as the 334th richest man in the world as of March 5, 2008[1], making him the richest black African citizen [2] and the second richest black person in the world behind Mohammed Al Amoudi ($9.0 billion) [3] and ahead of Oprah Winfrey ($2.5 billion), Mo Ibrahim ($2.5 billion) and Patrice Motsepe of South Africa ($2.4 billion).

The Dangote Group, originally a small trading firm founded in 1977, is now a Multi-Trillionaire naira conglomerate with operations in Benin, Ghana, Nigeria, and Togo. Dangote's businesses include food processing, cement manufacturing, and freight. The Dangote Group dominates the sugar market in Nigeria, as he is the major sugar supplier to the country's soft drink companies, breweries, and confectioners. Dangote Group has moved from being a trading company to Nigeria's largest Industrial group, including Dangote Sugar Refinery (the most capitalized company on the Nigeria Stock Exchange, valued at over $3 billion with Aliko Dangote's equity topping $2 billion), Africa's largest Cement Production Plant: Obajana Cement, Dangote Flour amongst others.

Dangote played a prominent role in the funding of Obasanjo’s re-election campaign in 2003, to which he contributed over N200 million ( $ 2 million). He doled out N50 million ($ 0.5 million) to the National Mosque under the aegis of "Friends of Obasanjo and Atiku", and contributed N200 million ($ 2 million) to the Presidential Library. These controversial gifts to members of the ruling People's Democratic Party have contributed to concerns over continued graft despite highly-publicized anti-corruption drives during Obasanjo's second term.

Aliko Dangote and the Dangote Group

Within the last three years, imagination on whether a Nigerian manufacturing brand  could assume immediate international prominence, recognition and acceptability, has  been receding and reality is dawning. The process is already well grounded as Aliko  Dangote, Nigeria’s most enterprising entrepreneur, gradually plants the country’s  leading brand across the African continent. In the next three years, a firm  statement would have been made: Congratulations Nigerians, a Nigerian brand has  truly arrived on the manufacturing map.
By 2013, Dangote Cement will be fully producing in 14 African countries. And in the  medium to long term, the Group is moving into the Middle East and Asia in  furtherance of its drive to exploit the abundant resources that abound in Emerging  Markets. Seems impossible? Then you have not seen the small plaque with only three  words placed conspicuously on the edge of Aliko Dangote’s table in his  moderately-appointed office at the Union Marble House, Ikoyi, headquarters of the  Dangote Group. NOTHING IS IMPOSSIBLE, the plaque says.
Indeed, nothing is to Dangote, least of all the business globalisation dream.  Steadily, he has been internationalising the Dangote brand by instituting Dangote  Cement plants in many countries in Africa. Dangote Cement has invested $28mn in the  1.2 million tonnes per year Tema Cement Factory, Ghana. In South Africa, the Dangote  Group is investing $112mn in Sephaku Cement. The company is a unit of Sephaku  Holdings Limited, a South-African black-owned minerals exploration development and  investment firm. This latest investment takes Dangote’s stake in the cement company  to a 64 per cent controlling portion and will contribute largely to actualising the  2.2 million tonnes a year plant billed to start production by 2012. Twenty cement  professionals with a combined experience of 200 years have been recruited from all  the cement companies. The plant will be built in Aganang.
The Dangote Group had, in 2008, invested over $3bn in Sephaku Cement to finance  construction of the plant. This latest financial injection will help provide  guarantees the company needs to secure debt funding for the new plant, fund any  over-runs on the project with a loan of about $35mn and finance the company’s  limestone exploration programme in Western Cape and Limpopo Province. Sephaku is  developing the Aganang project that will produce 900,000 tonnes and the Delmas plant  which will produce 1.25 million tonnes a year. The company also has a plant in Benin  Republic. With Dangote Group’s total stake in Sephaku, confirmed as the largest  investment by any private company in South Africa, Aliko takes over as chairman of  the South African firm. The Dangote Group will soon be producing in Senegal,  Ethiopia and Sierra Leone and is moving into Cameroun and the Congo Republic.
Dangote cannot wait to see the plant grinding. “In Nigeria, we are doing 12 metric  tonnes per annum. So this is not a big deal. Dangote Industries will bring its full  experience to the project. We foresee growth in South Africa and other African  countries. We shall build modern cement plants in strategic locations. We shall  build using the latest technology and we’ll stick to environmental requirements.  Indeed, we’ll generate less dust than German requirements. We have been looking  outside our home market for growth. There is no way to invest in Africa without  coming to South Africa. We want to be a pan-African company, the champion in the  sector. Africa is the only continent with a cement supply deficit. Many countries  rely on imported products and pay a price premium,” Aliko said.
Chief Executive Officer, Sephaku Cement, Pieter Fourie is confident the first  elements of Sephaku Cement would come on stream in 2012. “The South African  cement  industry will never be the same.”  Fourie, a former director of Blue Circle and  Lafarge stated.
The Ghana investment is a three-legged affair. Dangote Cement is the first foreign  investor into that country’s cement production business through its subsidiary  there, Green View International Company Limited, and is competing with three  indigenous others: Ghana Cement Company, West African Cement  Company and Savanna  Cement. Ghana Cement and West African Cement depend mainly on importing and bagging  the product with no local value added. But Dangote is, barring any hitch in  obtaining all the relevant approvals, working towards full local production from  limestone to bagged cement. Already, as disclosed by Green View’s Managing Director,  Kwame Siriboe, sufficient limestone deposits to support full-scale manufacturing  have been discovered in northern Ghana. The Ghanaian government and people are  ecstatic that when local production eventually commences, it will usher massive  investments into Ghana, with all its multiplier effects, create many jobs and bring  about technology transfer.
At present, Green View is still bagging imported cement for sale from its $28mn  investment facility located in the port of Tema in southern Ghana. It is also  erecting another $28mn facility in northern Ghana to enable it distribute the  product effectively across the country. Executive Vice-Chairman of the Dangote  Subsidiary in Ghana, Mr. Tajudeen Sijuade, promised Ghanaians that Dangote Cement’s  activities in Ghana promise many things for the indigenes in terms of investments,  jobs and offshoot small and medium scale enterprises. Dangote Cement will be filling  a yawning gap in Ghanaians’ cement demand that Ghana Cement and West African Cement  cannot collectively fill. Whereas statistics released by the Association of Ghana  Industries estimated local demand at 3 million tonnes per year, the two indigenous  cement bagging companies can only supply 1.4 million metric tonnes.
That desire to lift Africa from the backwaters of industrial inactivity to enable it  compete with the BRIC nations and peers like Malaysia, Singapore, South Korea and  Indonesia has also taken Dangote to Zambia where the Group is building a $400mn 1.2  million tonnes per annum cement plant. With construction of the plant, being done by  a Chinese firm, not expected to last more than 24 months, the Zambian government is  looking forward to seeing the country commence cement production latest 2012.  President of Zambia, Mr. Rupiah Banda, was effusive with praises for Aliko Dangote  when he visited Abuja, Nigeria’s Federal Capital Territory in October. Banda was  emotionally moved that an African is investing in African economies most of which  and especially Zambia’s, he pointed out, are controlled by the Chinese and Indians.  The Zambian president wished other African businessmen would employ their resources  patriotically to developing the African continent.
Last Tuesday, Dangote Cement formally merged with Benue Cement Company, BCC, and was  listed on the Nigerian Stock Exchange. That merger makes it Africa’s largest  producer of cement, having overtaken Pretoria Portland Cement Co., PPC. The South  African company has cement production plants in South Africa, Botswana and Zimbabwe  with an overall production capacity of 8 million tonnes annually. Production  capacity at the consolidated Dangote Cement alone rubbishes that output: Currently,  the Obajana cement plant in Kogi State produces 5.2 million tonnes per year while  BCC can do 3.2 million. Dangote Cement plans to double output at Obajana by next  year to 10 million tonnes per year while the BCC plant, which Dangote bought over  from government in 2002 as a near-moribund entity and turned around, is being  expanded.
The Group projects to increase production over five-fold by 2015, as it capitalises  on expected construction boom across Africa. It is looking at a whopping 46.2  million tonnes by that year garnered from its plants that would have been completed  and producing across the continent. The breakdown puts output from Dangote Cement  plants in the West African region at 30 million tonnes per year while the remaining  16.2 million tonnes annually will come from other African countries where it is  currently putting up plants.
And Aliko Dangote is putting them up in style. Insisting on modern cement  technology, Dangote is not sparing any dollar in ensuring that today’s technology is  transferred to Dangote Cement’s plants in full measure. A visit to the $1.2bn  Obajana Cement plant will be highly informative. When Dangote, in 2002, expressed  his intention to build a huge modern cement plant in Nigeria, some pessimists  sneered. Obajana would be the single largest private investment and third overall  largest plant in Nigeria, beaten only by Ajaokuta and Aladja steel plants. But then  those pessimists did not have the NOTHING IS IMPOSSIBLE plaque on their tables and  lack the vision, commitment and patriotic fervour of Aliko Dangote. The conception  was, indeed, quite ambitious and would truly frighten timid African entrepreneurial  minds. Only a business Hercules that Aliko Dangote is would carry such an Atlas of a  project on his shoulders and would not buckle one nerve!
The project is a total business solution, complete with three 45-megawatt each power  plants. A 90-kilometre pipeline was laid from Ajaokuta to supply gas to both the  power and cement plants. It sources all its raw materials – aluminium, clay, marl,  laterite soil and laterite iron – at a vast mine located some five kilometres behind  the plant. Only gypsum, another vital raw material in cement production, like  aluminium, is not available in the immediate environment. It can, however, be  sourced easily from mines not too far from Obajana. Experts have estimated the rich,  sprawling limestone mines to be about 60 metres deep and could be exploited for  nothing less than 70 years. Crushers located near the mines work on limestones and  the other materials at the primary crushing location and then send them through a  long, fast conveyor belt to the cement plant.
The latest Gamma Matrix online analyser technology installed at the mine ensures  automatic right-mix of raw materials. To further enhance quality control, installed  in the factory is a robotic laboratory that samples products and corrects errors, if  any. Then there is the Experts Control and Supervision Unit which continuously  monitors kiln operation, a process that updates plant information regularly. Mr.  Joseph Makoju, Managing Director of Dangote Cement, boasted to TheNEWS magazine that  Obajana Cement is 100 per cent pollution-free.
As has become the tradition wherever it operates, the Dangote Group has transformed  the sleepy Obajana village that hitherto lacked all amenities into a lively  commercial town. Apart from constructing the access road to the factory (a road that  has become a major by-pass for all vehicles), the Group built a network of roads for  the community, thereby opening it up from a one-path hamlet to a civilisation  bustling with activities. The Group has done boreholes for the people to afford them  potable water, built schools, started a micro-finance scheme and is providing them  with jobs, either as skilled or unskilled workers. David Ogah, who told this  magazine he hails from Obajana, admitted he probably would still have remained in  abject poverty if the Dangote Group had not come to town.
What the Group did in Obajana, it more than replicated in Gboko, home of BCC.  Whereas the Group easily got the cooperation of the indigenes in the location of the  Obajana cement plant, it was entirely another story in Gboko. Aliko Dangote’s  acquisition of the decaying plant in 2000 as core investor met with strong  opposition from the indigenes who regarded him as a usurper who wanted to snatch  what they regarded as their birthright. This BCC instance was yet another proof of  Dangote’s doggedness, perseverance and commitment to a cause. The Gboko people  virtually rose up in war against him, vowing an “outsider”, as they called him,  would not take over BCC. Some other entrepreneurs would have quit. But not Dangote,  whose business philosophy, one of many, is WINNERS DON’T QUIT. For three years, the  impasse could not be resolved, but he hung on.
Today, he is not only fully in control of the plant, he has turned it around  completely. When Dangote bought BCC, the company was in debts, the machinery was  outdated and rusty and staff morale was low. It was barely loading 25 trucks per  day. All that has changed. The debts have been cleared. By end of 2008, the company  was doing 200 trucks a day. By the beginning of this year, it was hitting 500. The  BCC stock on the Nigerian Stock Exchange by the last quarter of 2006 was a mere N5.  Before it was suspended for the merger with Dangote Cement and the listing that  eventually held last Tuesday, the price had climbed up to N67.50.
The government and people of Benue State, initial antagonists of the takeover, have  been the greatest beneficiaries of the investment. Since its arrival, Dangote Group  has practically taken over the role of the government, providing amenities and jobs.  It has provided water and electricity and bought motorcycles under a revolving loan  arrangement. It also organised farmers in the community into a cooperative society  to enable them benefit from fertiliser supply and funds. Every year, a number of  youth also benefit from scholarships, just as there is a conscious arrangement that  ensures that, at least, 60 per cent of the community’s indigenes are employed by the  plant.
The Dangote Group is also providing jobs for indigenes in Ibeshe, a community near  Ilaro, Ogun State, where it is erecting a six-million metric tonnes capacity plant  scheduled to begin production in March next year. The $680mn is being handled by  Sinoma International Engineering Limited, a Chinese firm. A sum of $280mn of the  amount is being invested on a 105-megawatt power plant that will run on bio-fuel  (natural gas and coal). The 22km long gas pipeline will be completed by December  this year and is expected to be linked to the national grid early next year.
The factory occupies about 2000 hectares of land for mining of limestone deposits of  about 240 million metric tonnes with an estimated lifespan of 90 years. It is  expected to produce 7200 tonnes of cement per day. It will have a 300,000 metric  tonnes storage capacity and six cement silos. It also plans to provide two boreholes  for the community, as well as schools and hospitals.
The Dangote Group also, in 2004, acquired a 75  per cent stake in Bonny Allied  Industries Limited, BAIL, a cement terminal formerly managed by a Scandinavian  company at Onne, Rivers Port. The company, which has a production capacity of 700  tonnes, about 233 trucks per day, services about 70 per cent of the south south and  south east markets.
The Dangote Group is making giant strides in sugar production. In 2003, it bought  over the non-performing Savannah Sugar Company in Numan, Adamawa State. Since taking  over, the Group has invested about N12bn purchasing state-of-the-art machinery,  trucks, canal construction, high quality seedlings, fertiliser and boosting staff  morale. It has since increased sugar production at the plant from 1040 tonnes in  2002 to 50,000 metric tonnes for the 2009/2010 season. It built a N500mn 16km canal  to ensure all-year cultivation of sugar cane and increased cultivable land between  2003 and 2009 from 20 to 6330 hectares. In seven years, staff strength has increased  from 700 to 5000.
By 2012/2013, production capacity is planned to increase to 250,00 tonnes per annum,  with staff strength going up to 25,000. The Dangote Group will be establishing a  1000 cattle dairy farm with the aim of using cattle feeds from molasses (one of the  by-products from the plant). On the whole, the Group plans to cultivate a total of  100,000 hectares of land in northern Nigeria for sugar production. In Lau, 35,000  hectares will be cultivated; in Hadeija, 15,000 hectares will be cultivated while in  Galala, 25,000 hectares is planned for cultivation. A total of 1 million tonnes of  sugar will be produced annually. As in other communities, the Dangote Group is  impacting extensively on the lives of the Numan communities and its neighbours in  its corporate social responsibility. The Group built the Zanghum-Imbru road,  constructed a 10-metre bridge over the canal, renovated primary schools in Zanghum,  Gwayana, Burthi and Kem, constructing a secondary school in Zanghum, equipped and is  maintaining a health community centre with modern facilites and provided a 500kva  transformer to Gwayana community. It plans to build a school there for vocational  training and upgrade the schools.
To make farmers self-reliant, it has organised the Outgrowers Scheme, in conjunction  with the Nigeria Sugar Development Council to assist local farmers in cultivating  sugar cane using Dangote’s resources and then paying them for the produce after the  harvest. Under the arrangement, the Savannah Sugar Company will provide farmland,  fertiliser, water for irrigation, seedlings and farming implements. The company is  providing 1000 hectares of land for 1000 farmers over the next two years.
Dangote Group is ensuring there is something for every home from its mills – from  sugar to salt to pasta to noodles, to semovita (Danvita) to juice drinks to flour to  bottled water and, yes, to agro sack to pack them all. Across the country, from  Lagos to Kano to Calabar, the Group is building subsidiaries, serving the nation,  providing employment. In 1997, Dangote began production of salt at its plant in  Apapa, Lagos. Since then, there has been, as in every other one of its ventures, no  looking back. It is now clearly the market leader, operating under the quoted name  of National Salt Company of Nigeria plc and producing table salt in 500 gramme and  1kg sachets and 25kg bags. It also produces industrial salt, butter salt and kitchen  salt in 25kg bags. It has installed three plants in Apapa, Oregun (both in Lagos)  and Port Harcourt to produce salt sold not only in Nigeria but across the West  African coast. The Oregun factory is a  modern facility capable of turning out  30,000 tonnes a year and there are plans to increase the figure, especially in table  salt to 150,000 as the commodity gains more acceptability in the ECOWAS markets.  About 40 per cent of salt from all the three plants goes to the North for sale while  the remaining 60 per cent is distributed in the South. Dangote Salt is an  international award winner, having won the International Standard for System Quality  (ISO 9000-20001). It has also won the Nigerian Industrial Standards, NIS, award for  quality.
Ever one to exploit advantages in favourable government policies, the Dangote Group  is, at its Abule-Oshun, Lagos, factory, churning out a wide variety of fruit juice  drinks, Ziza milk and the Mowa bottled water under its subsidiary name, Dansa Foods.  The federal government had banned importation of packaged juice and beverage  products. The company is cultivating 400,000 hectares of farmland in Calabar to  source its raw materials with a view to, as Pankaj Kumar, its Managing Director told  this magazine, reducing its dependence on imported concentrate juices. The company  also needs more raw materials as it steadily expands in both local and international  markets. At present, about only 20 per cent of its concentrate requirement is  produced locally. Dansa Foods has now commenced processing of pineapple juice on its  farm to feed the Abule Oshun plant while arrangements continue to start cultivating  other citrus species.
Dansa Foods provides both direct and indirect jobs for over 20,000 Nigerians that  could otherwise have been unemployed, thus, as in the objective of the entire  Dangote Group, contributing to poverty alleviation. Its operations also conserve  foreign exchange that would otherwise have been spent on importing fruit juice  drinks. Although wholesale dealers have been marketing Dansa Foods products across  the West African coast, the company itself has concluded arrangements to formally  launch the products in the sub-region, as disclosed by Kumar. It would soon begin  commercial packaging of its fruit juice range in Ghana, to be followed in the  not-too-distant future by full establishment of a manufacturing plant there.
As usual, Aliko Dangote has not spared funds in ensuring high technology operates at  the Abule Oshun plant to guarantee production of unblemished products for the good  health of its numerous customers. Dansa Foods partnered with Tetra Pak in the supply  and maintenance of the ultra-modern juice production equipment worth over N10bn  covering 13 production lines. It employs 649 direct workers to keep it running. In  addition is a highly automated machine capable of producing 4 million bottles of the  Mowa table water per month without any human contact whatsoever with either the  liquid or the bottles. As was revealed by Prem Kanojia, Dangote Foods Sales Manager,  the company had from zero per cent captured 11 per cent of the market share within a  short time and would soon increase to 15 before the year ends.
Dangote Pasta produces spaghetti and macaroni at its plant located in Ikorodu, Lagos  State. It began operations in 2000 with only one line producing 2500kg of spaghetti  per hour. Capacity has gradually increased over time and it currently boasts about  six lines producing about 30,000 metric tonnes per annum, of variants of macaroni  and spaghetti. Of the six, five lines are dedicated to spaghetti production while  one is for macaroni. Each production line turns out 10kg carton. The noodles unit  also has six production lines in Lagos, Calabar and Kano and a back-up line. Two  more lines are planned to be added. Equally spread across Lagos, Calabar and Ilorin  are the Group’s flour mills. The Group started flour production in Apapa in 1999  with a capacity of 500 tonnes a day. Today, it is the biggest player in flour  manufacturing in Nigeria with total milling capacity of 4800 metric tonnes a day, a  figure it is working on to jack up to 7300 metric tonnes. At the Calabar mill,  TheNEWS saw engineers from Switzerland installing more state-of-the-art equipment to  boost production.
Aliko Dangote has always believed in uplifting the living standard of man.  Consequently, he has established the Dangote Foundation to affect the welfare needs  of both countries and individuals. The Foundation was established in 1993 and has  been silently involved in egalitarian interventions over the years. It has worked to  provide drinking water and health facilities in partnership with many state  governments. It has also provided grants to individuals and groups for health,  education, economic development projects, among others.
Aside the numerous welfarist projects the Dangote Group itself is engaged in as part  of its corporate social responsibility, the Dangote Foundation is separately  touching lives of many individuals and needs of countries and states. This year  alone, the Foundation has provided 50 boreholes in all the 23 local governments in  Kaduna State. Apart from the boreholes in Kaduna State, it has also dug boreholes  worth over N100mn across the country. In Lagos State, it provided a dialysis machine  to the Lagos Island General Hospital. It provided food items worth over N70mn to  victims of the Jos and Bauchi crises, apart from cash worth over N50mn earlier  provided.
For the Nigerian youths, Aliko Dangote has established the Dangote Academy which is  taking off this year. The Academy will be training free of charge students in  electrical, mechanical and instrumentation engineering. The students will have the  advantage of benefiting, apart from theories that will be delivered to them by  excellent lecturers, from practical courses in the modern, hi-tech plants and  laboratories in Dangote subsidiaries spread across the country, like the Obajana  Cement plant in Kogi State, the Savannah Sugar plant in Numan, Adamawa State, the  Dangote Flour Mill in Calabar, Cross River State and Dansa Foods in Lagos. Some of  the graduates will be lucky to swell the 14,000-man workforce of the Dangote Group.  “

—Tayo Odunlami

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