The best way to appreciate the scale of Aliko Dangote’s empire is to hitch a ride on one of his private jets. A half-hour after his Bombardier Challenger 605 takes off from Lagos Airport, it descends into a seemingly desolate area of Kogi State in central Nigeria, dusty fields and clusters of trees stretching to the horizon.
Suddenly a tangle of exhaust stacks, silos, and kilns pierces the sky to the left of the aircraft as Dangote Cement Plc’s Obajana plant comes into view. It’s already the biggest in Africa, churning out enough sacks of cement to fill 1,000 trucks a day. A fifth production line now under construction will make it one of the world’s largest.
The cement plant and its two sister factories in Nigeria have long been the bedrock of Dangote’s fortune, Africa’s biggest. But Dangote’s future—and, as he likes to say, that of the entire continent’s economy—lies to the south on the Nigerian coast.
About 40 miles east of Lagos, on more than 6,700 acres of former swampland bound by a lagoon and the Atlantic Ocean, contractors are putting the finishing touches on a fertilizer plant valued at $5 billion. Next to it, construction of a vast oil refinery—a $12 billion project—is underway.
If all goes according to plan, the complex will immortalize the 61-year-old Nigerian businessman as Africa’s most prominent industrialist, vaulting Dangote Industries’ annual revenue from $4 billion to about $30 billion, roughly 8 per cent of Nigeria’s gross domestic product. Oil industry experts such as London-based CITAC have questioned the project’s timeline, citing logistical and financial challenges. But Dangote insists the refinery, which will be Africa’s largest, is on track. “By 2020 I will finally dispatch oil,” he says during a January interview at his Lagos home.
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Despite controlling the world’s 10th-largest oil reserves, Nigeria has only four ageings, inefficient state-owned refineries, leaving it almost wholly reliant on imports for its fuel needs. Dangote says his massive refinery could end that dependency and lift electricity generation in a nation plagued by blackouts: “It will change the entire economy of Nigeria.”
The fertilizer plant, which Dangote says will come online in a few months, will be capable of producing up to 2.8 million metric tons of urea a year. “It’s probably the largest-volume urea plant ever executed at one time,” says Alistair Wallace, head of fertilizer research at Argus Media in London. Nigeria’s natural gas prices are the lowest in the world, meaning Dangote’s fertilizer will likely be profitable even in the competitive export market. “It will generate hard currency and bring in dollars. It will be a good look for the administration and for Dangote,” Wallace says.
Born into a wealthy Muslim family of traders in the north, Dangote incorporated his own business selling cement at 21. He shifted to manufacturing the building material in the 1990s, convinced his homeland, the world’s seventh-most-populous country, could meet its own demand for staples. Dangote factories churning out sugar, flour, and salt followed. A vertical integration push gave rise to other businesses, including oil, property management, packaging, and port operations.
Critics have attacked him for holding much of his wealth offshore and say he’s a shrewd monopolist who has plied his political connections to secure an advantage over competitors. They claim his market-dominating cement company squeezes local consumers with prices three times the global average while slashing prices in neighbouring markets to crush rivals. A World Bank report published in 2016 found that African cement prices averaged $9.57 per 50-kilogram bag, compared with $3.38 globally. Dangote’s cement business has also been accused of exploiting a government-run investment promotion program to secure generous tax breaks.
Dangote shrugs off such criticism while preaching the gospel of markets as the best way to narrow the divide between the haves and have-nots. “China in 30 years has taken almost 500 million people out of poverty,” he says.
Soft-spoken and unfailingly polite, he offers up his chair in meetings to guests and serves food for others during lunch in an office conference room. But the courteous chief executive officer is also a hard-driving manager. “ ‘Not possible’ aren’t words he understands,” says Giuseppe Surace, chief operating officer of the refinery project, as our convoy of Toyota Land Cruisers sets off on a four-hour tour of the site. “In his own way, he is very tough.”
Dangote, for his part, has decades of experience negotiating Africa’s pitfalls. Yet even by the continent’s standards, the refinery project could be characterized as a heavy lift. Dangote Industries bought the plot for $100 million at the end of 2013, but it ultimately took almost three years—and many truckloads of sand—to prepare the swampy ground for construction. The company erected a jetty and widened and reinforced roads to accommodate shipments of cranes and other equipment.
While Dangote has confined his business activities to Africa so far, he expects to expand beyond his home continent after revenue tops $30 billion. There’s not “capacity to be able to invest that kind of money just in Africa,” he says.
Signs of his burgeoning fortune abound. His namesake foundation spends as much as $100 million a year on projects such as hospitals and malnutrition, according to its CEO Zouera Youssoufou. Dangote’s offices feature photos of him with Bill Gates and Barack Obama, and he says he’s in the process of setting up a family office that will have outposts in London and New York. Carlyle Group’s David Rubenstein is helping set it up and the unit will invest alongside the private equity firm, Dangote said. Rubenstein, who hosts a show on Bloomberg Television, declined to comment.
“It’s very much on paper now,” Dangote says.
He could even acquire that archetypal billionaire trinket: a professional sports team.
An Arsenal fan, Dangote says he’s prepared to stomach the multibillion-dollar price tag the English soccer club would command once the refinery is finished.
“I will go aggressively after Arsenal,” he says.
For now, though, his focus is on the vast project taking shape on the Atlantic coast.
Source: Bloomberg
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