Johann Georg Winklmayr, an Austrian leather craftsman, was making a leather luggage case for a Bentley car in Moscow. The 82-year-old died in 2008 before he could finish the work. It was left to his youngest son Georg, who inherited the family factory in Vienna, to complete the work but, he was not interested. Georg shipped the incomplete job 8,340 kilometers to his elder brother Hanspeter Winklmayr, in Roodepoort, south of Johannesburg, who was busy with crocodile skins.
“My brother sent me all the stuff. I finished it and I sent it back to him and then Moscow. It was the craziest thing I’ve ever done, but it was fun. I prefer doing small bags, it’s my speciality; you cannot be the jack of all trades. But this was in honor of my father,” says Winklmayr.
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This is a story that stretches back from Africa to three centuries ago in Europe. The first in line was Johann Kammerer, born in 1670, in Vienna. Trailblazer Kammerer made leather saddles from home, and this skill transformed into expensive leather elegant accessories for the rich.
Winklmayr, the fourth generation of the Kammerer clan, spent his childhood in the family factory learning the craft from his grandfather and father.
“Before I could read and write, I knew what the hammer, scissors and knife were,” says Winklmayr.
Wanderlust shone, like leather, in the eyes of the young man.
A 21-year-old Winklmayr landed his first job as a designer and manufacturing manager at Dolphin Leather Crafts in South Africa, in 1981. He had a master’s degree in the manufacturing of leather goods.
“When everyone was going to Paris, London or San Francisco, I said I am going to South Africa. I really had no idea what I was putting myself into. I had a very strong patriarchal father, so I wanted to show him I could manage on my own,” says Winklmayr.
Winklmayr spent eight years at Dolphin Leather Craft where he trained staff.
“I couldn’t speak a word of English when I came here, but in two years I was getting better and better,” says Winklmayr.
In 1989, Winklmayr quit Dolphin Leather Craft to partner with a fellow Austrian furniture-maker Walter Hauser, in Roodepoort.
The 56-year-old, grey bearded and ponytailed Winklmayr works in the grimy industrial world of Roodepoort. He co-owns the company Via La Moda, situated in a three-storey red brick building in a factory flanked by used car dealers.
The second floor is where FORBES AFRICA found Winklmayr in a white sleeveless coat with pencils in his chest pocket. He complains about his tennis elbow. The years of cutting and stitching are taking their toll.
Fresh from the kitchen where he had a tea break with his 48 staff, he retreats to his air-conditioned office, full of sketches, scissors and leather cut-offs.
It’s been a long day. At 5AM, on weekdays, he pedals at the crack of dawn. Then Winklmayr drives five kilometers from home to begin the day on his computer exploring the latest patterns from Italian and French designers looking for inspiration.
Turning crocodile skins into these designs is how Winklmayr makes his living.
Via La Moda’s designer handbags are carried by European princesses, they include Princess Caroline of Hanover and Princess Charlene of Monaco, the former Olympic swimmer from Benoni, Johannesburg, who married a prince. The South African-born Hollywood actress Charlize Theron, also from Benoni, has one with her initials engraved on it.
It is the fruit of collaboration that began in February 2014 with entrepreneur Stuart Brand. The former hotelier turned crocodile farmer, in the Zambezi River in Zimbabwe, came to Winklmayr with a bag full of crocodile skins. Before, Brand was shipping all his tanned leather skins to the United States, Italy and France. But he wanted Winklmayr to help him create luxury items under the brand Zambezi Grace.
“We sold most of our processed crocodile skin in the boot market in Texas. But we wanted to go all the way from egg to final product on our own. We wanted to come closer to the consumer. We needed to do everything by ourselves. That’s why we created our luxury brand, Zambezi Grace. A lot of Africans will leave Africa to buy European brands because they think it has to be good if it’s European. That’s why we needed to create a strong African brand, created by Africans, and make sure the conservation is in order. We want a strong presence in Africa,” says Brand.
It all started when Brand was running The Grace Hotel, a family business in Rosebank, Johannesburg, in 2002. He got a call from an anxious friend who had lost his farm to land invasions in Zimbabwe. He wanted Brand to join him in buying a 20-hectare farm with 5,000 crocodiles near the north Zambezi River. It was not your everyday request. It took little persuasion for the adventurous Brand to head for uncharted territory.
“To me it didn’t make good business sense to breed crocodiles and make profit out of their skin, but this was a good friend from university. I trusted him. We bought the farm and he managed it well and he is a shareholder… In Africa we have the skills, the skins, the labor and the conditions, but until now we’ve been supplying overseas brands rather than creating our own,” he says.
Risk runs in the family. Chippy Brand, his father, was an entrepreneur. He was the first farmer in South Africa to grow grass for sale in Westonaria, 45 kilometers from Johannesburg. Chippy was also the founder of Grace Hotels – Mount Grace, west of Johannesburg; the Rosebank Grace and the Cape Grace at the Waterfront in Cape Town, which won the title of best small luxury hotel in the world in 1999.
Between 2004 and 2007, Grace Hotels was sold and Brand invested his money in Zambezi Grace.
Thirteen years on, on the farm in Binga District, in the north of Zimbabwe, the crocodile population has grown to 40,000 and has its own tannery factory. Zambezi Grace is worth $25 million.
“We added more and more capacity to the farm since we bought it. In 2013, we built a tannery to process the animal leather skin. This has created more work for the local people who lost jobs before we came,” says Brand.
“In today’s world you need to develop your own brand. There are very few recognizable African luxury brands. With the Cape Grace hotel business we managed to do it and I am transferring the experience to Zambezi Grace. It will be difficult because people’s perceptions of Africa are negative. If it is from Africa, it is not luxury,” says Brand.
Brand praises the work of his 400-strong staff. They see 100% of their crocodile eggs hatch compared to less than 70% in the wild.
It’s not easy to separate a ferocious crocodile from its skin but Brand says there has been no fatality yet. Before slaughter, the animals are stunned.
“I made a pact with the crocodiles that I won’t eat them if they do not eat me. That’s why I don’t eat crocodile meat,” says Brand.
So, crocodiles, an African entrepreneur’s know how; blended with hundreds of years of European leather expertise, has snapped up a multi-million-dollar business.

A Business Of Crocodiles And Princesses  Making Millions

There is a rowdy crowd at one of Lagos’ busiest commercial centers – the Idumota market on Lagos Island. High pitched hawkers shove their goods at customers, motorists struggle for space on the narrow roads, and hundreds of stalls, with music blaring, lay out their merchandise. Today’s hustle is no different from any other and no one knows this better than Paul Orajiaka, the entrepreneur who has spent years in this hub.
From running a little store out of a dilapidated building in the market, to owning a colossal outlet within its vicinity, Orajiaka is no stranger to the nooks and crannies of his business address.
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Orajiaka’s company, Auldon Limited, manufactures African-themed toys which promote the continent’s cultural heritage to children. The company recently launched the Unity Girl Dolls Project, with multi-cultural dolls in different Nigerian traditional attire. The dolls can be found in countries including Nigeria, Ghana, South Africa, Kenya and some parts of Europe.
Auldon Limited was founded 17 years ago with less than $100. As a determined young man, Orajiaka’s dreams were shattered when he was repeatedly denied an American visa after finishing high school in Benin City. He wanted to study business management in the United States to market his father’s business. Orajiaka’s father was a renowned African carver and staunch entrepreneur in Warri. Orajiaka, and his siblings, helped with the carving work but Orajiaka wanted to take his father’s craft to a more structured market.
“I was about 16 years old. I was denied a visa at my umpteenth attempt primarily because of my age. I had frequented Lagos to follow up with the American embassy at each application stage. I decided to remain in Lagos, where my sister also lived, after my ambitions to go to the States didn’t work out. I didn’t want to be mocked by my friends back in my hometown. I had no idea what my next move was going to be,” says Orajiaka.
He decided to work at the Idumota market.
His brother-in-law was an importer who traded in a large variety of merchandise. Orajiaka helped his in-law and was impressed by the large amount of money the business made.
“I was learning a lot about the business environment and couldn’t believe the volumes of goods we were pushing into the market. The returns were fascinating and I soon began to get excited about my new activity.”
Orajiaka proved a valuable resource to his in-law’s business and was generously rewarded. The money he was earning made up for his previous disappointments, but Orajiaka was soon advised to return to school.
“While working for my in-law, I enrolled as an accounting student at the University of Lagos after which I proceeded to get a Master’s in Business Administration from Lagos Business School. This reinforced my gusto for the business world now that I had my professional qualifications. I decided to start thinking of my business seriously.”
While seeking new markets to supply merchandise to, in highbrow areas of Lagos, he visited a new store. He admired the toy section and was fascinated by the range and variety on the shelves.
On his next visit, he noticed that the section was almost empty and immediately asked the store manager if they needed new supplies. After getting the green light from the manager, Orajiaka scouted the length and breadth of the Idumota market for a toy stockist. The toys he found were a lot cheaper than those in the fancier stores.
“I was going to make huge margins on this product if I succeeded in getting the manager to place an order. I delivered the samples at a 300 percent markup price. The store manager ordered a few dozen immediately. I never expected this. I approached my in-law… to purchase a bigger order from the supplier for the required number of samples. This is where it all started. Today, a humble beginning which started as a small venture is a leading company, importing and supplying a diverse range of educational toys to both retailers and wholesalers in Nigeria,” he says.
“We started out with a capital base of about $30 now have a turnover of well over $7 million as at last year.”
The dolls’ visibility has grown in leaps and bounds over the years. Social responsibility is an area the company has also focused on with the Unity Girl Doll Project.
“I was not happy that most of the toys sold in Nigeria didn’t promote any cultural relevance. I wanted to promote the dark-skinned and African-featured girls and women as beautiful and their culture as diverse and admirable.”
One of the challenges Orajiaka faced was a lack of support from financial institutions in Nigeria. A school renovation program was part of the tasks that accompanied the project.
The Unity Girl Doll Project is a collection of 14-inch dolls that represent Nigeria’s three major tribes – Hausa, Ibo and Yoruba – with the aim of promoting the country’s cultural diversity and relevance to the younger generation. The dolls also have booklets outlining details of the culture, languages and backgrounds of the three main tribes.
With the dolls available in leading retail outlets across Nigeria, Orajiaka has proved that business can be child’s play.

This Business Is Child’s Play

In December, when most people were opening Christmas gifts, Nevin Siralen Pillay was unwrapping packages containing semen-stained underwear and bras.
It was a busy month for him and business as usual, unpacking innocuous boxes with questionable contents and addressing strange requests for human DNA testing, from South Africa and beyond.
It would be an understatement to say the 39-year-old Durban-based Managing Director of DNATest, a South African company specializing in relationship and forensic DNA testing, leads an eventful life.
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His office could be regarded as part-lab, part-theater, judging by the cast of characters who walk in every day – anxious men waiting to confirm the paternity of ‘their children’, suspicious women wanting to nail cheating spouses and long-lost family members seeking to establish their biological relationship.
Pillay says he gathers his wits about him every day, laughing at life’s tragicomedies. This is the only way, he says, he can cope.
“I tend to deal with it by making a joke of it and hoping for the best. For instance, there are so many cases of paternity tests, but at the end of the day, a child – an innocent party – is involved, and I tell people not to forget that.”
Although he has marketing in his genes – “I am very marketing-minded” – Pillay’s career was not meant to be in genetics, of all things. He studied sports management and is a self-confessed sports freak into tennis, cricket, soccer, offroad 4X4 driving – and he visits the gym five times a week. After university, he didn’t venture far, starting out as a sales manager in his family’s chemical business in Durban.
“I come from an entrepreneurial family. I joined my family’s business Chemlog, an established chemical manufacturing business that has been around for the last 27 years.”
He was with Chemlog until 2007, which was when certain pertinent incidents in his life and career contrived to change his destiny, draining him ‘emotionally and physically’.
That year, he got divorced and also faced an armed robbery that changed his thinking – forever.
“I have been a victim of four armed burglaries in my life. The first one was when I was at home in Durban. The next three were when I was at work. Each time, I have been beaten and roughed up. But the third time, one of the burglars spat on me, and I waited for an hour until the police arrived. The cops asked me to wipe the spit off my face. And I thought: ‘there is DNA there, why wouldn’t you use it?’ That’s when the idea hit me, and I started researching the use of DNA for forensic analysis… It soon dawned on me that South African legislation did not allow for the outsourcing of DNA forensic work.”
“I was watching [investigative journalism TV show] Carte Blanche one night, and they had a segment on the backlog in forensic crime in South Africa. This was on Sunday night. On Monday, I had decided I wanted to open a lab in South Africa. [To start with], paternity tests were the way to go.”
Pillay approached DNA Solutions, an Australian-based DNA testing and research organization, to give him the initial support to start the operation.
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He founded his company, DNATest, as a testing laboratory in Durban in 2007, with the vision of exploring commercial forensic testing. His intention was simple: to help trace perpetrators of crime in South Africa using DNA evidence, while making a business of it. In 2009, his was also the first company to launch the home paternity test kit.
“I didn’t come from a medical background, so I had to learn all about it. In the beginning, it was just based on word of mouth – we did two tests a month. In the second month, we did 10. I wasn’t selling milk and bread. This was a product somebody looked for only when needed.”
Pillay introduced the DNA test kit to the South African market, in retail pharmacies such as DisChem, where one can purchase a R1,000 ($85) paternity kit over the counter.
“Over time, we see a trend from an economic point of view. A guy would rather pay R1,000 on the test than pay monthly maintenance [for a child that was not his].The lower to middle income groups find paternity tests are an easy way out,” says Pillay.
And there is awareness about it among all income groups now, says Pillay, thanks to the ‘television soapies’ and detective serials such as CSI portraying DNA analysis.
Clients purchasing the home test kits use oral swabs to collect cheek cells containing DNA from inside the mouth, and then get in touch with Pillay’s office to have the samples collected. They are then analyzed and the results discreetly disclosed. The accuracy of results, says Pillay, start from 99.9%, which is exceedingly accurate for paternity testing.
Today, Pillay’s company is growing from strength to strength. His clients include royalty, politicians, celebrities and the common man. He also works for child welfare groups, where relatives of orphaned or abandoned children want to confirm their biological relationship.
Last year, DNATest recorded a R10 million ($853,000) turnover. Pillay had started his company with capital of R100,000 ($8,533). His formula for success?
“Blending medical technology with clever marketing, as it’s a commercial product,” says Pillay.
One of the highlights of his career was the high-profile DNA analysis in 2011 commissioned on behalf of the royal Zulu family of the late Zulu queen Thomozile Zulu who had died in 1959, and secretly buried. King Goodwill Zwelithini wanted to give his mother a ceremonial reburial, after years of not knowing where her remains were. The DNA test confirmed the remains were his mother’s.
“Our part was a forensic DNA analysis on bone. We were able to employ the best possible technology and experts available to match the sample for maternity to that of the king,” says Pillay.
The whole process was ‘a logistics nightmare’ however, as they needed to find a casket for the bones, which had to be dispatched – respectfully – to some of the most advanced labs in the United States.
“I spent sleepless nights,” recalls Pillay, but in the end, it got him recognition and the confidence to surge ahead.
“We are dealing with people’s lives and cannot afford to make mistakes. We have so far never made a mistake. We have never had a case of disparity of results,” says Pillay.
It’s a sentiment echoed by 24-year-old Kabir Dhupelia, who worked at DNATest as an intern in the initial years.
“Besides the fact that Nevin was doing something absolutely innovative, that people needed but didn’t have access to because of the cost, what made him stand out was his attention to detail. He was a stickler for facts, had the knowledge and was extremely forward-thinking. He was driven in business, and as a person, was laidback, casual and trusting,” remembers Dhupelia.
More recently, for the company, infidelity tests are proving to be more popular. Pillay says he has enough anecdotes to write a book – or a crime novel. But his job is not entirely a treat for the senses.
“We once had this client, a lady, who wanted to find out if her husband was cheating on her as she had found a [used] condom in the bin. She kept it over an extended period, and posted it to us, wrapped in plastic. We had to open the package and I can’t tell you, the smell was horrendous! I can never forget it!”
The samples – bras, underwear, bedsheets, cotton buds contaminated with anything from saliva to blood and semen – come from all over, traveling long distances in unsuspecting parcels from as far as Russia, China, Australia and Malta.
Pillay delivers another salvo.
“Then there is this case of a well-known, wealthy family in the Eastern Cape. The husband employed a private investigator to check if his wife was cheating on him. Every Monday, without fail, we would receive a semen-stained lady’s bra, for a semen-detection test. It continued for a period of six weeks. Eventually, we did prove that she was cheating on him.”
In another case, he recalls a 22-year-old girl from Durban who arrived at his door with her child and three guys, asking to test which one of them was the father of the child.
“It took us seven days to conduct the test, and at the end of it, I told her: ‘are you ready for this?’ The tests revealed that the child’s father was a fourth guy who was not present in the room. The girl was so blasé about it, but the three guys who came with her looked really relieved.”
Infidelity tests can be done for as little as R2,000 ($170), but what continues to amaze Pillay are the lengths suspicious men and women will go to acquire tangible evidence. Specimens could be anything from hair to clipped nails to ear wax to chewing gum, dental floss and cigarette stubs.
And then there is the story of the pastor in Port Elizabeth.
“The pastor’s wife knew he had cheated on her and had a daughter, now a grown woman who he never acknowledged. The wife always suspected she was his daughter, so she collected about R10,000 ($850) to enable the paternity test, drawing hair samples from his razor blade, and cigarette stubs from the girl. And she was proved right,” says Pillay.
Pillay also offers services from his offices in Namibia and Zimbabwe. In 2015, he will be opening new offices in Mozambique and Swaziland. On occasion, he says he has even had the Hawks (a special unit targeting organized crime in South Africa) approach him for assistance on cases.
His company handles about 250 relationship tests a month, of which about 10 to 20 are requests for infidelity tests. While more tests mean more business, on the flip side, it also speaks of society’s ills.
“[Typically], there is a surge in paternity tests from August to October. Because it is in December and January that people are sleeping around,” says Pillay, as you do the math.
In his own life, have these trends put him off marriage and commitment? Pillay says it has.
“I think I was hurt very badly after my divorce, and [even] among your network of friends, you see the guys who cheat, the women who are not happy…”
For now, he is a happy man in his off-hours, enjoying the outdoors and the sunny Durban beach. But he is never too far away from a package with his name on it and a damning sample that could change somebody’s life forever.

Tidy Profits From Messy Lives

Ten years ago, Victor Ochen, was a cobbler, fish monger and charcoal burner. This year, the 33-year-old is the first Ugandan and youngest African to be nominated for the Nobel Peace Prize.
Ochen spent most of his early childhood at an internally displaced persons (IDP) camp in Abia at the height of a bloody war perpetuated by Joseph Kony’s Lord’s Resistance Army (LRA) in northern Uganda. He is now the director of the African Youth Initiative Network (AYINET), offering medical and psychological rehabilitation to the thousands of victims of the conflict.
Ochen, who was nominated with AYINET, says he can’t believe he will be competing with global personalities like Pope Francis; Edward Snowden, who leaked details of American electronic surveillance; and Novaya Gazeta, a Russian investigative newspaper critical of President Vladimir Putin.
“I was born in war, raised in war, a life no child should live. I can’t believe the work I did for the good of my people, a local struggle, has taken me to the international level,” he says.
Ochen has seen the horrors of war. He watched his mother die in 1996 because the conflict barred the way to malaria drugs.
“We tried to carry my mother on a stretcher from Abia to Lira (about 20 kilometers away) but the rebels had set up so many traps around the area. After carrying her for some time, she told us to take her back home and instead take care of ourselves.”
Later, Ochen’s mother died, which led to his father wanting to commit suicide. With his brother, Ochen managed to convince his remaining parent to live.
Before their mother died, Ochen and his brother vowed to never shoot a gun.
“Up to now, I don’t know how to fire a bullet,” he says.
After relocating to an IDP camp, life became rough. Ochen would dig other people’s gardens and burn charcoal to earn money for food.
Around 1995, at the age of 13, Ochen formed a youth peace club that was against the recruitment of child soldiers.
“I remember being called by some elders and asked how I could talk about peace yet I had never lived a peaceful life. They also told me I would be killed by the army if they got to know I was preaching against war,” says Ochen.
Living with war has left Ochen with an aversion to violence.
“I don’t celebrate when I see a rebel being killed. I believe there are conditions that forced these people to fight. But again committing crimes against humanity with impunity cannot go on.”
Ochen believes that former LRA commander, Dominic Ongwen, currently at The Hague facing war crimes, should be punished.
“He was such a vicious commander who oversaw the abduction, rape and murder of tens of thousands of children and women. He should answer for his sins. Let him at least tell us where some of the women and children are. We know they must be somewhere.”
Ochen witnessed an operation led by Ongwen in 1999 when he was burning charcoal to try and earn money to register for national examinations.
“We watched them open our charcoal and spoil it. They only crazy thing I have done in my life was throwing stones at the 100-plus gun-wielding rebels to try and stop them from spoiling my charcoal. I cried silently, cursed Ongwen and ran back to
the camp.”
Whereas other children go to school to get jobs, Ochen’s story was different as “I have always done all kinds of jobs so that I can go to school.”
The year he joined secondary school, Ongwen worked as a fish monger to raise money to buy a box and pay fees. Throughout his life, Ochen never put on shoes until he was chased out of a senior two lesson for wearing lugabile (sandals made from old car tyres).
“I remember becoming a cobbler in school and raising 8,000 Ugandan shillings to buy my first shoes. However, I did not put on these shoes as they were stolen the same night I bought them. I never saw them again and up to now I’m still looking for my first pair of shoes,” says Ochen with a smile.
He was able to finish Senior Four and went on to work as a cleaner, receptionist and radio presenter. Ochen was voted the best radio presenter in Lira.
His first attempt to join university in 2003 was thwarted by a lack of school fees. His family relied on him for income.
“I was later lucky to get a job with Straight Talk Foundation where I got some money and studied a bachelor’s degree in Leadership and Development Studies from the little-known World University of Leadership (the university has since stopped operations in Uganda),” he says.
While at Straight Talk, Ochen decided to form his own organization. He wrote several proposals that have now helped him to run a budget of $1 million.
Top on the list of activities is helping victims of the LRA war. Those whose lips were chopped off, those who were amputated and the returnees who need to be helped back into the community.
His greatest belief is that his story represents the African youth who has suffered at the hands of what he calls greedy
war mongers.
“The youth are being used as tools of injustice yet they should be used as tools of justice. It is good we have helped strengthen the understanding of foundations for justice such as the International Criminal Court.”
Ochen says the trial of Ongwen should be a wake-up call for all those involved in war crimes.
This year’s winner of the Nobel Peace Prize will be announced on October 9, the day Uganda celebrates its independence.
“My prayer is that as we celebrate Independence Day, my effort will be rewarded so that the African youth living in IDPs can see a bright future ahead of him.”

The Man Of Peace Who Wept As He Threw Stones At Rebel Soldiers

Aliko Dangote lives as you might expect, given he’s the richest person in Africa and resides in the same country being bullied by the insidious Boko Haram terrorist group, which finds something noble in kidnapping village girls. Located on Victoria Island, a wealthy Lagos enclave that has a moat in the form of a lagoon and the far eastern shores of the Atlantic Ocean, his mansion comes with all the trimmings: massive black gate, bulletproof windows, Big Brother video surveillance, guards and a secret entryway.
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After I enter, a butler motions to a sitting room overlooking a patio and a blue-tiled pool. The three-story fortress is shielded from the 90-degree heat by powerful air-conditioners (themselves presumably shielded from Nigeria’s notoriously unreliable electric grid by diesel generators). Dangote, round-faced with a trimmed graying moustache, appears from upstairs dressed in khakis and a casual blue button-down. The 57-year-old can seem miscast in the role of industrial titan, often speaking so softly that he mumbles.
As breakfast arrives by the platterful, including plantains, smoked chicken in red sauce, diced sweet potatoes, whitefish and sausage, he sticks to coy conversation. Whether about his country’s fraught presidential election (“It’s going to be tough for both parties”) or his cement company’s long-delayed overseas listing (“Maybe next year”), he has little to say. On one subject, though, he is always articulate. “Nigeria is one of the best kept secrets,” Dangote says. “A lot of foreigners are not investing because they’re waiting for the right time. There is no right time.”
Nigeria does provide fertile opportunity for vast wealth. As evidence, look no further than Dangote’s No. 67 rank on the World’s Billionaires List and his $14.7 billion fortune – mostly from three majority stakes in publicly traded cement, sugar and four companies. And he doesn’t arrive here alone. In another dramatic sign of his country’s emergence, Nigeria has overtaken South Africa on FORBES’ 50 Richest in Africa ranking. Thirteen Nigerians earned spots in 2014, including a trio of new billionaires.
Dangote and these other Nigerians power Africa’s largest economy. The drop in crude prices prompted the oil rich country’s stock index to plunge 40% last year, taking Dangote’s net worth down in lockstep – no surprise, since his companies account for almost a third of the nation’s benchmark index (his $10.3 billion drop in net worth was the world’s largest last year). But the underlying fundamentals are strong. From 2010 to 2013, Nigerian GDP expanded by an average of 5% a year. (It now totals some $500 billion, or a third larger than South Africa.) Even with the oil glut, forecasters believe this year’s growth will top 5%. In fact, according to a widely cited Citigroup report, economists expect Nigeria to have among the fastest average annual GDP growth in the world between 2010 and 2050.
There are other reasons for international interest as well. In the shadow of rising Islamic militancy, which has destabilized the Middle East and now threatens to do the same to parts of Africa, President Obama recently issued an executive order tasking US business executives with strengthening trade ties to sub-Saharan Africa (the council includes heavy hitters from Wal-Mart, G.E. and McKinsey).
Prior to that, in May 2014, he dispatched Penny Pritzker to Nigeria, the first visit by a Commerce Secretary in two decades. America’s foreign direct investment in Nigeria reached a continent-leading $8.2 billion in 2012, the last year for which statistics are available. Overall US-Nigerian trade was $9.8 billion last year. Nigeria sells far less oil to America these days – it exported $2 billion of the black stuff last year as the US’ tenth-largest supplier – so most of that trade comes through other goods and services.
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Keeping Nigeria successful is critical. The country is already Africa’s most populous, with more than 170 million people, and that figure will swell to 210 million by 2020. By 2050, Nigeria is forecast to overtake the United States (440 million to 400 million). Yet a majority of the people subsist on less than $1.25 a day. About half are illiterate; most are very young (the country’s median age is 18.3). And 50% of rural Nigeria lacks access to clean drinking water. It’s hard to imagine the government coming to grips with it all, even if oil prices recover. Nigeria consistently ranks in the bottom quarter of the most corrupt countries in the world, according to Transparency International, and is proving a feckless pursuer of the Boko Haram thugs terrorizing the northeast.
All of which makes Dangote – well connected, wildly wealthy and ready to do business – an increasingly important player on the world stage. “Anyone doing business in Africa,” says David Rubenstein, the cofounder of the Carlyle Group and a fellow billionaire, “knows Dangote.”
The roots of Dangote’s rise lie 150 miles south of the Sahara in his hometown of Kano, Nigeria’s second largest city. A dusty metropolis, Kano has been a trade center and commercial hub since its establishment in the 10th century, thanks to its strategic location on the edge of the vast desert. Egyptian perfumes, incense, inks and mirrors dominated at first, then leather goods. The camel caravans became lucrative enough to fight over; wars broke out with neighboring kingdoms. When the British arrived in the late 1800s, Kano was West Africa’s most important business center.
Under British rule, Sanusi Dantata, Dangote’s grandfather, grew rich trading commodities like grain oats and rice, and ranked as one of Kano’s wealthiest citizens. Dantata insisted on personally raising his grandson – not an unusual arrangement in northern Nigerian culture – and instilled a businessman’s mind-set in Dangote at a young age. At the age of eight, he turned allowance into startup capital. “I would use it to buy sweets, and I would give them to some people to sell, and they would bring me the profit,” Dangote says. “When you are raised by an entrepreneurial parent or grandparent you pick that aspiration. It makes you be much more aggressive – to think anything is possible.”
The country was growing up, too. Post-colonial instability, including countless coups and a civil war in the 1960s, was eclipsed by an oil boom in the 1970s. During that decade, the economy grew 18% annually, with many of the spoils going to well-connected elites. Despite the explosion of revenue, the World Bank still considered Nigeria – along with countries such as Bangladesh, Ethiopia, Chad and Mali – as “low income,” a candidate for international aid.
Dangote, a Muslim, attended Al-Azhar University in Cairo and studied business. After graduation, he asked his grandfather for permission to move to Lagos. A $500,000 loan from his uncle set up 21-year-old Dangote as a trader of rice, sugar and cement. He was well capitalized and a naturally talented trader. He imported sugar from Brazil and rice from Thailand and sold them locally at a huge mark-up. At his height, he says, he was pocketing $10,000 in profit a day. “Things were quite good,” he says. “It allowed us to create an awful lot of cash.”
He also worked the politicians. According to a State Department cable unearthed by WikiLeaks, Dangote “held exclusive import rights in sugar, cement, and rice, using such advantages to do volume business and undercut competitors.” Dangote flatly denies this.
Dangote’s success landed him firmly on America’s radar. A 1994 diplomatic cable singled him out as a businessman to know in Nigeria and drew attention to his clan’s homes in Kano, Lagos, London and Atlanta. The State Department report also highlighted the annual family vacation to the States.
A 1995 trip to Brazil convinced him to shift from trading to manufacturing. Why continue to play middleman when he could make the stuff in Nigeria instead and pocket even more profit? His resolve was strengthened in 1999, when Nigeria held its first democratic presidential election in six years, choosing a bespectacled former military ruler and chicken farmer named Olusegun Obasanjo, whom Dangote had known since 1981. As a key part of his platform, Obasanjo had pledged to protect and promote domestic industry.
That’s all Dangote needed to hear. Dangote Sugar started in 2000 and quickly expanded the annual production capacity of its refinery at Lagos’ Apapa Port to 1.44 million tons, enough to satisfy 90% of national demand. By the time Dangote Sugar debuted on the Nigerian Stock Exchange in 2007, sales had quadrupled to $450 million. The four firms, which began in 1999 and also produces pasta and noodles, followed a similar trajectory. It began with a single mill, tripled revenue to $270 million, increased capacity eightfold to 1.5 million tons – then joined Dangote Sugar on the NSE in 2008, the same year Dangote became the first Nigerian on FORBES’  World’s Billionaires list, at No. 334. In 2005, Dangote secured a $480 million loan led by the World Bank’s International Finance Corporation – Nigerian banks didn’t have the ability, or the stomach, to put up the cash alone – and agreed to plunk down $320 million of his own money to build a cement factory. Dangote Cement listed on the NSE in 2010 as a $1.3 billion-in-sales company. The three companies today do a combined $3 billion in revenue; while Dangote Flour operates at a loss and Dangote Sugar’s net margin falls in line with Brazilian peer Cosan, the cement company is wildly profitable, with a margin of 52% – about double that of close competitor LaFarge Africa.
Obasanjo, re-elected in 2003, worked overtime to ensure that any Dangote challenger who entered the market did so with a significant handicap. At the time Dangote’s sugar and four companies went public, raw sugar was taxed 12 times less than refined sugar, wheat six times less than flour. Dangote Cement prospered from restrictive licenses. The companies retain a vice-like grip on their industries today, controlling at least half of the cement and sugar markets and about 25% of four.
“When Obasanjo took over, he took guys with him,” says a Nigerian belonging to the country’s overlapping circle of business and political elites. “He gave them a leg up.”
Last August, as the Islamic State overran northern Iraq and Boko Haram was declaring its own caliphate in Nigeria, the White House held a US-Africa trade summit in Washington, DC. A highlight was the announcement of a $5 billion fund backed by Wall Street billionaire Steve Schwarzman’s Blackstone Group – and Dangote. They plan to invest in infrastructure companies throughout sub-Saharan Africa.
“We can do well as investors, and the countries will do well,” Schwarzman says. “We’re aware that operating in Africa isn’t as easy as many other places. You have to have a very strong local partner, and we were lucky enough to find Aliko. He’s done a remarkable job.”
Rubenstein, of the Carlyle Group, sought out Dangote as well when raising money for his firm’s first sub-Sahara-focused fund in 2012. Dangote ultimately invested in the $700 million fund.
“His name carries a great deal of weight,” Rubenstein says. “If you say he’s an investor with you that carries a lot of weight. He’s helped us.”
The Carlyle fund has so far invested in five companies, including a $147 million deal last November for Nigeria-based Diamond Bank, a retail lender.
It’s all part of Dangote’s fast-rising international profile. He’s a Davos regular, and appeared with Goodluck Jonathan, Nigeria’s current president, on a panel about investment potential in Africa at the 2014 World Economic Forum. Even four years ago, he was there making a familiar pitch: “Don’t give any more aid to Africa,” he said. Invest with local partners instead. “You will make money, and we’ll make money, and it’s better for everyone.”
But it is not in Dangote’s nature to rely on others to prosper. Mostly, he relies on himself.
He trusts few others with real power at his companies, often making decisions with little more than gut feeling, says a former top executive.
“Ultimately all the decisions sit with the boss, Dangote, rather than the senior management,” the executive says.
Self-reliance and a supremely healthy ego blend seamlessly into a cult of personality at Dangote’s firms. Portraits of him hang on the walls. The average Dangote employee seems to virtually worship him.
“I’m going to be a big man, I’m going to be the next Dangote,” a lab technician at the one of the cement plants says over and over again until his sentiment is recorded on paper. A lieutenant warns that Dangote will walk out of a meeting if it starts even a minute late.
But Dangote is hardly the hermetic workaholic (“I don’t think I’ll ever retire”) he puts on. “He attends more parties than anyone I know,” says Jim Ovia, a banker and close friend. One Sunday last month found Dangote on his yacht – christened Mariya after his mother – and then flying to Geneva on Monday to see his grandchildren. Later that week, he met first with the French general counsel and then with Davido, Nigeria’s biggest pop star.
Another recent social call: breakfast with former president Obasanjo, then onto Abuja to meet the current president. Dangote has good reason to keep up with Jonathan, whose government still enforces Obasanjo-era high tariffs on imports that compete with Dangote’s key products. Indeed, the State Department has come to see Dangote as completely inseparable from the Nigerian government.
“But without him a lot of people wouldn’t have jobs,” says a former US diplomat in Africa. “And Nigeria would be weaker.”
Jonathan’s reign may soon end: He faces a surprisingly strong challenger in this March’s presidential election, and Boko Haram’s unchecked bloodshed is at least partly to blame. The insurgents have killed an estimated 20,000 people, displaced more than a million and now control some 20,000 square miles within Nigeria. Jonathan’s opponent – a retired army general – is seen by his supporters as the best man to finally defeat the terrorists. For Dangote, the upheaval has meant lower demand for his cement (“There are places in the north where no one is thinking of building a home,” one Dangote executive says), and he cut cement prices twice last year, most recently by 14% in November. But whether it’s Jonathan or someone else ruling Nigeria, observers find it difficult to believe that anyone would shut him out of the presidential palace. He’s simply too important to the economy.
Oil represents another big play. He is busy building a refinery some 40 minutes by car outside central Lagos. He explains with uncharacteristic glee that the recent drop in prices will actually make construction easier. His suppliers will be desperate… and easy pickings. “We will be the only ones around,” he says. “We will carry a big knife and cut them on prices.”
The refinery, Dangote says, can be profitable even at $50 to $70 a barrel. Raw crude for the refinery will come from multiple suppliers. If all goes according to plan, it’ll produce 650,000 barrels a day – a variety of gas, diesel and jet fuel. Dangote would basically walk away with a monopoly on refined oil in the country: The four Nigerian National Petroleum refineries are viewed as corrupt to the point of non-functioning.
To make it happen, Dangote plans to invest some $10 billion to $11 billion in the project and an adjacent petrochemical plant, with at least $6.75 billion in debt financing. Dangote threw a big celebration the day he signed the loan terms at the Hilton in Abuja. Guests included state governors, bank executives and, naturally, the president.
Terraforming is almost complete on the refinery’s 10-square-mile site – a jungle swamp now turned into a sandy expanse. A drive-through reveals a few stick huts, the last remnants of native villages that were there before Dangote arrived. Dangote executives promise the government has compensated the displaced natives well. As a stream of black Dangote trucks pass – one with a full bed of armed guards – a woman scurries inside a hut and shoots back a dark look.
The convoy pulls to a halt on a palm-tree-lined beach, a tropical paradise more suited to multimillion-dollar condos than refining petrochemicals. It’s a goner, though, the future home of another Dangote empire.
“The refinery will start in 2018 if we finish on time,” Dangote says, optimistic as always. “By that time all the dead bodies will have been removed from the street. All the trouble will be gone.”

Tag: April 2015

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