Founder and president of Dangote Group
As Africa’s richest man and business warrior, Aliko Dangote traverses the world leaving little time for interviews. He recently brought himself a $45 million Bombardier jet to save time. In May, Dangote was in China to sign a deal with Sinoma International Engineering Company. This deal means 10 new cement plants across the African continent, at an estimated cost of $3.9 billion, in just over three years’ time.
In this rare encounter, at the Transcor Hilton in the Nigerian capital, Abuja, he appeared relaxed, passionate about Africa, as well as pleased to be nominated as a Person of the Year by FORBES AFRICA.
“I feel great about it. I consider the recognition an honour and appreciation of what we are trying to do in the private sector. One thing people usually don’t understand is that what the Dangote Group is trying to achieve is something that our political leaders have failed to achieve in terms of reaching Africa economically. We are now in 14 African countries and wherever there’s an opportunity on the continent, we are very keen to explore it,” he says.
These are busy times for the Dangote Group, next year it plans to move into petrochemicals.
“It’s really a green area in Nigeria but we believe it’s an opportunity provided by the country’s endowment of gas,” he says.
“In our cement business, we are expanding massively on the continent, looking to raise our annual production capacity on the continent to about 60 million metric tons. Our target is to be number one in terms of profitability. In terms of agriculture, we have a sugar refinery where we process imported raw sugar, but we are looking at backward integration that will lead to the employment of 50,000 Nigerians. Going forward, from 2012 to 2015 we intend to invest $7 billion in Africa.”
It is the fruit of decades of risk taking that began with his cement plant back in Obajana, in Kogi State, 220km south west of where we are sitting. Dangote took the risk and invested in a five million tons plant – at a time when the entire Nigerian production was a mere 1.2 million tons.
“We saw the growth potential of the market and took the risk betting that the more we produce, the more the demand. I recall that my late friend and former CEO of Guarentee Trust Bank, Tayo Aderinokun, said that I was taking a big risk, but I believed that it will pay off. Today, Dangote Cement alone has a production capacity of 20 million tons and the rest of the market has eight million tons and we are starting another project to add a fresh 9 million tons in the next 60 days,” he says.
The impact of the Dangote Group has also been felt in the Lagos Stock Market. Last October, the group listed on an exchange erstwhile dominated by the banks. Dangote Cement is now one of the largest capitalized companies on the bourse, accounting for a quarter of the stock market.
Dangote believes passionately this is the time for Africa.
“I personally think there will be another recession because Europe will not be able to handle Greece and Italy at the same time. But Africa has the advantage of high growth rates on low debt. It’s the reverse in Europe. As a result, I think it’s only a matter of time for more investors to shift focus to Africa, which is more profitable. Money has no color and so investors will be attracted more to this continent because of its potential. If Lafarge of Blue Circle were more aggressive about investing in Africa in the past, Dangote would not have grown to this level because they could have blocked that opportunity with the cash and scale they have. Today, our Nigerian operation alone is a $14 billion business that we never dreamt would happen,” he says.
Dangote inspires many entrepreneurs in Africa, we ask whether there are many other investors like him in the continent.
“There are people that have cash but not heart and guts. They know the potential, but think of the headaches. But the truth is that nothing is easy in life. I think there can be even bigger companies than Dangote. It’s all about guts. Ten years ago, it was difficult to imagine our company achieving a valuation of $1 billion… I never in my wildest dreams at the beginning thought I would achieve 1% of what we’ve achieved. Nothing is impossible,” he says.