Dangote’s entrepreneurial expertise have helped make him Africa’s richest individual, with cement plants opened or underneath building in all places from Senegal to Ethiopia to South Africa. He goals of proudly owning the biggest cement agency on the planet. By 2015, he hopes, his industrial conglomerate might be value 4 instances its present estimated $15 billion.
“We have taken the flag of Nigeria and flag of Africa and put them in locations they by no means anticipated to be seen,” beams the barely greying, younger-confronted tycoon sitting in his workplace within the industrial hub of Lagos. Behind him is a map of Africa and a photograph of his cement plant within the city of Obajana, set to have a capability of thirteen.25 million tonnes a 12 months by 2015, which might make it the world’s largest.
But the fifty five-yr-previous shouldn’t be with out controversy. To some, he’s an unassuming man whose quiet demeanor stands out in a nation the place success is often marked by talkative swagger; to others, he’s a monopolist who makes use of aggressive ways and political ties to beat opponents.
Critics accuse him of utilizing his affect with successive governments to ban imports by his rivals, pushing port authorities to halt rivals’ shipments, and utilizing sharp worth drops to place them out of enterprise.
Dangote admits he has been mates with a number of latest presidents of Nigeria and has loved profitable tax breaks, although he denies receiving any particular favors.
However he bought there, there’s little doubt his success in manufacturing is a rarity in a continent seen as too dependent on exports of uncooked supplies – minerals and money crops – with no added worth. By distinction, the Dangote Group refines sugar, mills flour, processes salt, and produces cement.
At current solely 5 % of Dangote Cement and 25 % of his flour and sugar corporations are publicly traded; nearly all of the opposite shares are held by Dangote. His whole annual pay cheque is not public, however Dangote Cement, Dangote Flour Mills and Dangote Sugar are all vastly worthwhile.
Dangote Cement’s pretax revenue for the primary half of 2012 grew by 23 p.c to 71.Three billion naira ($443 million). The sugar refiner almost doubled its income to eight.5 billion naira over the identical interval.
When Dangote floated the cement agency in late 2010, it boosted his estimated private wealth 5-fold to $thirteen.Eight billion, making him the quickest riser on the Forbes wealthy record. After a foul yr on the Nigerian inventory market, he remains to be price $eleven.2 billion.
Dangote now needs to checklist 20 % of the cement firm on the London Inventory Trade late subsequent 12 months, at a value that might worth it at $35 billion to $forty billion. That will make it the world’s high cement agency by market capitalization, larger than Lafarge of France, and surpassing cell phone operator MTN as Africa’s high inventory.
Hurdles stay. The tycoon must persuade buyers and regulators that his private empire is usually a FTSE one hundred agency with the mandatory company governance requirements. That can be a uncommon feat for a Nigerian firm. Guaranty Belief Financial institution and Diamond Financial institution have secondary listings in London, however each are too small to make the highest FTSE index.
“NOT IN IT FOR The money”
Born in April 1957 within the northern Nigerian metropolis of Kano, Dangote comes from a household of rich Muslim merchants. After demonstrating his early entrepreneurial spirit promoting sweets, he headed to Egypt to review enterprise at Cairo’s Al-Azhar college.
In 1977 he borrowed about 500,000 Nigerian naira from his uncle to commerce primary foods: cooking oil, sugar, pasta. 4 years later he purchased trucks to begin a transport agency and inside a decade was importing bulk items, together with cement. By the point he turned his hand to manufacturing the stuff – shopping for a defunct cement plant in 2000 and reviving it – he was a wealthy man.
Dangote, who married younger and has three daughters – he and his spouse at the moment are estranged – says he has by no means been motivated by wealth.
“I am not in it for the money. No, no,” he says. “I prefer to run a enterprise that is profitable … I am a really artistic particular person.” He says he eschews conspicuous consumption.
“I’ve a quite simple life.”
Up to a degree. Like many billionaires, he owns a yacht in addition to giant properties in Ikoyi, a leafy Lagos suburb, and neighboring Victoria Island, house to Africa’s most costly actual property. Then there’s the non-public jet, which he says he purchased to keep away from hangers-on who used to ebook first class tickets on the identical flight as him.
Suntil, by the requirements of Nigeria’s champagne-swigging, sports activities automobile-accumulating wealthy, he is not that extravagant.
Old good friend Bismarck Rewane, CEO of Lagos-primarily based consultancy Monetary Derivatives, remembers a enterprise dinner on the palm-fringed Eko Resort in the town. When he and Dangote left in Dangote’s black Mercedes, lodge workers charged 5,000 Nigerian naira ($32) for parking – extreme, however peanuts for a man of Dangote’s wealth. Indignant on the tried rip-off, the cement king negotiated it right down to 1,000 naira.
“He spent a superb few minutes doing it. I mentioned to him: ‘let’s simply go. Our time is extra precious than a couple of thousand naira.’ However he would not let it go,” Rewane stated of the tycoon. “He smiled afterward. He was so completely happy he’d obtained a very good deal.”
Dangote shouldn’t be at all times so frugal.
“He desires huge, some would possibly say too massive. In 2004-5 we owed eighty billion naira (about $500 million),” recalled Uzo Nwankwo, a fund supervisor who was Dangote Cement’s govt director of company finance from 2005 to 2007. “The banks have been nervous, however they could not cease the money. We had been too huge to fail.”
Dangote’s success has not been with out controversy. In a 2007 diplomatic cable that ended up final 12 months on the WikiLeaks web site, the then U.S. Consul Basic in Lagos, Brian Browne, wrote: “To detractors, he’s a predator utilizing connections in a corrupt political economic system to tilt the enjoying discipline in his favor.”
Critics say Dangote owes as a lot to political favors as enterprise acumen. His fortunes blossomed when his shut good friend Olusegun Obasanjo grew to become president in 1999, Browne wrote within the cable.
Browne couldn’t be reached for remark.
Obasanjo – whose 1999 election ended years of kleptocratic navy dictatorship – gave Dangote unique import rights to cement, sugar and rice, the cable suggests, in return for Dangote’s assist, together with funding Obasanjo’s re-election marketing campaign in 2003.
“It is not any coincidence that many merchandise Nigeria’s import ban lists are gadgets wherein Dangote has main pursuits,” Browne wrote. “He has had success in blocking commerce and funding that may compete along with his enterprises.” He concluded that Dangote is “dangerous to Nigeria’s pursuits”.
Dangote frowned, visibly annoyed, when Reuters learn him the cable throughout an interview. Constructing relationships with presidents is a standard a part of being a enterprise chief, he stated, denying he had used connections to stifle competitors.
“We have been near nearly all of the presidents which have handed,” he stated, naming army dictators Muhammadu Buhari, Ibrahim Babangida and the infamous Sani Abacha as examples. However, he insists, “we have now by no means taken benefit … and we weren’t even at all times handled pretty.”
These days, Dangote’s relationship with presidential energy has turn into symbiotic: presidents must court docket him too.
He is on President Goodluck Jonathan’s financial administration crew and the federal government’s job creation committee, which successfully permits him to assist form commerce and financial coverage. Jonathan, who final 12 months awarded Dangote Nigeria’s second-highest honor, Grand Commander of the Order of the Niger, attended a ceremony for the opening of a manufacturing line on the Obajana plant in June.
When requested if he would run for president, Dangote is adamant: “By no means, by no means. I do not need to transcend my life ambition … A lot of the presidents, I have been giving them recommendation, whether or not they solicit it or not. To date they at all times hearken to me. If I’ve an concept, I can actualize it by way of our political leaders.”
But Dangote’s strategies do not simply contain political connections. One tactic for defending his digital monopolies is the usage of non permanent worth drops – lawful in Nigeria the place anti-belief laws is scant.
In 2010, as an illustration, as Lafarge arrange a packing plant in Ogun state, Dangote dropped its costs to 27,000 naira from 30,000 naira, sufficient to squeeze its rival’s margins. Just a few weeks later Dangote put its costs again up, says an govt in Nigerian trade.
“It despatched out a powerful message, that he is in management,” stated the govt, who wouldn’t be named.
Nor does Dangote shrink back from utilizing litigation. He’s at the moment embroiled in a authorized tussle with one among his arch-rivals within the cement enterprise, Cletus Ibeto.
Former president Obasanjo shut down Ibeto’s cement plant for allegedly claiming funding tax breaks on false pretences. When Umaru Yar’Adua turned president in 2007, he reopened Ibeto’s enterprise and gave him preferential import duties and zero VAT to compensate him for losses beneath Obasanjo.
Now Dangote is asking a courtroom to cancel these tax breaks. And in a rustic the place the larger fish are likely to win, few suppose Ibeto stands an opportunity. Ibeto didn’t return requires remark.
Dangote says he at all times acts lawfully, and that one specific supply of irritation to opponents – the 5-12 months tax vacation he received on all his factories – is obtainable to any Nigerian enterprise in the event that they promote home trade. Such tax breaks are open to firms that obtain ‘pioneer standing’, which dozens of Nigerian corporations have. To get it, an organization has to show it has made substantial new investments, which none of Dangote’s rivals within the cement enterprise have been capable of do.
Supporters say Dangote demonstrates that Nigeria can succeed internationally in sectors moreover fossil gasoline extraction or on-line fraud, and that Africa can achieve trade with out having to depend on overseas funding from the West or China.
“He is an African investing in Africa, creating jobs in Africa that may ultimately construct a sustainable center class,” says Nigerian Inventory Change Director Common Ade Bajomo. “The wealth created by Africans is the wealth that tends to remain onshore.”
The different lesson – that Africa should course of the minerals it digs up if it desires to create jobs – chimes with what African leaders equivalent to Uganda’s Yoweri Museveni have stated for years.
With an annual turnover of $2.5 billion, the Dangote Group contributes practically 1 % of the GDP of Africa’s second largest economic system, and employs 23,000 individuals in a rustic with large unemployment.
Dangote additionally makes cement domestically on a continent with a booming inhabitants, dilapidated infrastructure and a chronic housing scarcity.
“We’re placing these cement amenities in sub-Saharan Africa the place there may be want,” he says. “The market is already there, so we’re closing the hole between provide and demand.”
A London itemizing would imply changing the board of Dangote Cement, of which he’s chairman, as it’s presently made up of Dangote’s relations and shut associates. Dangote says he’s searching for an unbiased board; colleagues doubt he’ll discover it straightforward to step again.
Analysts say the velocity at which Dangote is constructing his pan-African empire is dangerous, citing mission delays and administration points as their best considerations.
In a report in Might, Renaissance Capital warned that his factories could battle to get the fuel provide they want, which might decrease projected margins.
Another fear is that Dangote’s success in a corrupt, closed economic system like Nigeria will not be simply reproduced in nations with a extra stage taking part in discipline.
“The query is: if you’re good at doing enterprise in Nigeria, does that imply you will have a enterprise mannequin that may adapt to an setting exterior Nigeria?” asks Antony Goldman, head of London-primarily based PM Consulting, who lived in Nigeria within the nineties. “Can he make it a worldwide model?”
Dangote clearly thinks so, although for the time being he needs to deal with sub-Saharan Africa. He says enlargement is being financed by income in order that, when it is accomplished, “we’ll not owe any financial institution cash.”
“For now, we do not wish to have too many balls within the air, however in fact we have now ambition to develop (past Africa),” he says. Then, pausing to smile, he provides: “If you do not have ambition, you should not be alive.”
(Enhancing by Richard Woods, Sophie Walker and Simon Robinson)