The Dangote effect

Massive expansion elsewhere
Apart from cement, the group is also active in other sectors of the economy. For instance, in the sugar sector, Dangote Sugar Refinery (DSR) controls about 80% of the market. The company is currently pursuing a backward-integration policy aimed at producing a total of 1.5m tonnes of sugar per annum locally from its subsidiaries, in line with the national sugar master plan of the government, which took effect last year.

The policy aims to ban importation of finished sugar and encourage local production of the commodity with a view to creating more jobs and saving foreign exchange for the country. The company also plans to grow its sugar plantation business across 200,000 hectares in seven northern states to produce 1.5m mt of sugar by 2017. DSR plans to resume exports to selected West African countries in the first quarter of this year.

The National Salt Company of Nigeria (NASCON), another subsidiary of the group, has diversified into the production of vegetable oil, canned tomatoes and seasoning at its new plant in Ota, Ogun State, a major industrial hub in the country.

The Group has also increased its investments in the agricultural sector and it plans to embark on rice cultivation and milling in five states of the federation. Nigeria is currently one of the largest importers of rice in the world.

Dangote’s foray into local rice production will reduce importation of rice. Dangote is investing $16bn over the next four years to expand its operations.

Explaining his rationale for investing heavily in Africa, despite its perceived high risk to investors, Dangote says: “We are motivated to create an African success story because we believe that entrepreneurship, especially our own home-grown African entrepreneurship, holds the key to the future economic growth of the continent. The fact that Africa offers one of the highest returns on investment in the world is an additional incentive for any discerning investor who can take calculated risks.”

Meanwhile, Dangote, who was listed by Forbes magazine in March as the 23rd richest man in the world and the richest African, has endowed the Dangote Foundation, the vehicle for the Group’s corporate social responsibility (CSR) with $1.25bn.

He added: “The Dangote Foundation is now 20 years old. This initial endowment will ensure that the Dangote Foundation has secure and steady funding to carry out its mission as we significantly scale up our work.” Indeed, for discerning foreign investors, this might just be the right time to move in and invest in Nigeria.