Over the years Nigerians have lived to celebrate foreign brands, largely because the country has been import dependent, one thing many even considered normal without weighing the implications for our own economy and growth as a nation. Today Nigerians are witnessing the emergence of a home-made brand that is taking other countries by storm, thus making Nigerians proud. Almost all known household items that were once rationed among Nigerians due to limited supplies are among the Dangoteportfolios which are produced locally. While meeting local demands, the Group has ventured into other countries as a foreign conglomerate. This edition of BV examines the emergence of this undoubtedly leading Nigeria’s global brand. It also presents views of the CEOs of its major subsidiaries in the group. Enjoy the package.
THEDangote Group is first and foremost an indigenous brand, homemade and home grown brand that has successfully emerged a Nigerian multinational industrial conglomerate.
From the records, Dangote Group is reputed to be the largest conglomerate in West Africa and one among Africa’s largest on the continent today. It generated revenue in excess of $3bn in 2015. The group is one of the leading diversified business companies in Africa. Today there are more than 26,000 people in its employment.
The Dangote Group with its headquarters in Lagos has a diversified portfolio with interests across a range of sectors in Africa. Currently the Group’s investments include cement, sugar, flour, salt, pasta, beverages and real estate, oil and gas, petroleum refinery and petrochemical plant; the first privately owned in Nigeria and by extension Africa with other projects in telecommunications, fertilizer and steel. The Group focuses on provision of local, value-added products and services that are designed to meet the needs of Africans on the continent.
Dangote Cement, the largest cement production company in Africa, with a market capitalization of almost $14bn on the Nigerian Stock Exchange, has subsidiaries in Benin Republic, Cameroun, Ghana, South Africa and Zambia.
The conglomerate taking the world by storm today started as a trading outfit selling imported products most of which the Group now manufactures locally today. This strategy is seen running through the major subsidiaries that started with the buying and selling stage of the business before the strategy changed to that of manufacturing industries.
This same concept is being replayed in most of the countries where the Group has shifted attention to for investment. With the abundance of major raw materials in some of the African countries wisdom demands that rather than depending on importation, the products can also be produced locally to meet the demands of the consumers while at the same time providing employment opportunities for thousands of citizens who would have been jobless while the country is import dependent.
Subsidiaries of the Dangote Group:
1. ALCO International Limited
2. Dangote Nigeria Limited
3. Dangote Transport Limited
4. Dangote Cement Plc. This accounts for over 60% of Group revenue and is on the Nigerian Stock Exchange.
5. National Salt Company of Nigeria Plc – also on the Nigerian Stock Exchange
6. Dangote Flour Mills Plc. – Listed on the Nigerian Stock Exchange
7. Dangote Sugar Refinery– Listed on the Nigerian Stock Exchange
8. Dangote Oil & Gas Industries International
9. Dangote Textiles Limited
10. Dangote Holdings Limited
11. Blue Star Limited
12. Dansa Foods Limited
13. Dansa Food Processing Limited
14. Dancom Technologies
15. Greenview International Company Limited – Has invested US$28+ million in cement factory in Ghana.
16. Sephaku Cement Limited – Dangote Group has 64% shareholding in this South African Cement company.
17. Alheri Engineering Limited
18. Kura Holdings Limited.
19. AGDangote Construction Limited
20. Sino Dangote Trucks Limited
This Special report on the Dangote Group also features the Chief Executive Officers of the leading subsidiaries in the group who narrated the story of the success of their own companies which by extension accounted for the success story of the Dangote Brand.
The trend in the group’s investment strategy is to gradually replace the consumers’ over dependence on imported brand by providing them with local alternatives which are better in quality, at the same time affordable and in the process has succeeded in forming strong bond between the companies in the group and their various target audience in their operations.
The most widely spread of the Group’s investment, Dangote Cement, has not only emerged as the leading in that sector in Nigeria today but has also proved to be what an average consumer will ever desire to have. It has not just widened the gap when compared to other competitors but it is equally affordable, available and meets the desired quality for all seasons. In the process it has succeeded in forging a strong bond with the end users in such a way that it has left the competitors struggling not to lose more ground in the sector.
Dangote’s Portfolio: Meeting Needs Globally With Over 20 Products
THEDangote Group is a highly diversified and fully integrated conglomerate. The Group’s interests cut across a wide range of sectors in Nigeria and Africa. Current interests of the Group, which started as a trading company in 1978, include cement, sugar, salt, pasta, beverages and real estate with new projects underway in the oil and gas, telecommunications, infrastructure, fertiliser and steel sectors of the economy.
The Group’s core business focus is to provide local, value-added products and services that meet the ‘basic needs’ of the populace. Through the construction and operation of large scale manufacturing facilities in Nigeria and across Africa, the Group is focused on building local manufacturing capacity to generate employment, prevent capital flight and provide locally produced goods for the people.
Accordingly and in line with its core values, Dangote seeks to be a world-class enterprise that is passionate about the quality of life of the people and giving high returns to stakeholders. This philosophy is driven by its core values, which anchors on the platform of customer service, entrepreneurship, excellence and leadership.
Going by the size of the conglomerate today, the mission has not only been accomplished and the organization has since surpassed meeting the basic needs of its target audience but has also ventured into other areas as dictated by its current portfolio. We examine a number of them here
Cement subsidiary in the group is fully integrated and currently has operations in 14 African countries including Nigeria, Benin, Ghana, Senegal, Tanzania, Cameroun, Ethiopia, South Africa and Zambia, among others.
The company operates three cement manufacturing plants in Nigeria namely the Obajana Cement Plant, the largest cement plant in sub-Saharan Africa with a current capacity of 10.25 million metric tonnes per annum and an additional 3.0 million metric tons per annum planned before the end of 2014; the Benue Cement Company Plc (BCC) with 4.0 million metric tons per annum production capacity; and its newest plant, the Ibese Cement Plant, with a capacity of 6.0million metric tons per annum.
This has made it one of the largest cement producers in the world.
The Group’s sugar refining business started in March 2000 at its refinery located at Apapa Port, Lagos. The current production capacity of Dangote Sugar Refinery in Apapa is 1.4 million MT of refined sugar per year. The capacity is currently being increased to 2.5MT per annum. This will make it the largest sugar refinery in the world. The Group imports raw sugar from Brazil and refines it into white, Vitamin A fortified sugar. The Group is the largest supplier of sugar to all industrial users as well as household consumers in Nigeria, catering for almost all the needs of bottling plants, bakery, confectionery producers and others consumers through a wide network of distributors all over the country.
The sugar refining business was operated as a division of Dangote Industries Limited until January 2006 when it started as Dangote Sugar Refinery Plc. It was listed on the Lagos Floor of the Nigerian Stock Exchange in March 2007.
The Group also operates a sugar cane farming, processing and refining plant in Adamawa State known as the Savannah Sugar Company Limited. SSCL was established by the Federal Government in 1997.
The Group’s flour milling business was commissioned in 1999 and consists of facilities in Lagos – Apapa and Ikorodu- Kano and Ilorin. All mills have a combined milling capacity of 2.7 million MT per annum. The company imports hard wheat from the US which is then milled into 50kg bags of flour. The Company also produces confectionery flour, Semolina and Alkama.
The flour milling business was operated as a division of DIL until January 2006 when it transformed into Dangote Flour Mills Plc. DFM is now listed on the Lagos Floor of the Nigerian Stock Exchange. The division has three wholly owned subsidiaries, Dangote Pasta Limited, Dangote Noodles Limited, (recently sold to Dufil Foods, makers of Indomie) and Dangote Agro Sacks Limited.
Pasta: The Group’s pasta production business commenced in June 2000 at Nigerian Ports Authority, Ikorodu Terminal –Lagos, Nigeria. The Dangote Pasta Plant, started business with a single production line, churning out two million cases of spaghetti of 10kg per case. The factory currently has five lines with an installed capacity of 30,000mt per annum producing several variants of macaroni and spaghetti.
Bag: The Group produces environmentally-friendly polypropylene bags for the packaging of its products – cement, flour, sugar and salt. Bag production is the sole business of the Group’s Dangote Agro Sacks Limited, which is able to meet Group’s current bags requirements and produces 500 million 50kg-bags per annum. Dangote Agro Sacks Limited now operates as a subsidiary of Dangote Flour Mills Plc.
The Group’s salt production and refining business started at Apapa Port in September 1998. The company currently has 400,000 MT per annum of installed production capacity for Industrial Salt- 25-50kg bags of salt and 100,000kg per annum for Domestic Salt in smaller sachets (250g, 500g and 1kg) of salt. To improve efficiency, the salt division currently operates under the Nigerian Stock Exchange listed National Salt Company of Nigeria Plc (NASCON), a company in which the Group has majority control.
The Group is one of the concessionaires under the Federal Government’s concession arrangement for private sector involvement in the management of Nigerian sea ports. Under its wholly owned subsidiary, Greenview Development Services Limited, the Group currently manages Terminal E of the Apapa Port, Lagos. The Group’s Ports operations include stevedoring, terminal operations and bulk cargo operations.
The Group runs a thriving haulage business which it operates as a division under the name Dangote Transport aka DanTrans. It provides freight services with a fleet of over 5,000 trucks under commercially competitive terms, to subsidiaries in the Group to facilitate transport of raw materials from the sea ports to factories located inland and distribution of finished goods.
The Group owns real estate assets at various locations in Nigeria including Lagos, Cross River, Kano, Rivers and Abuja. The Group’s real estate assets include warehouses, flats and commercial offices.
Dancom Technologies Limited (Dancom) is a subsidiary of the Dangote Group, set up as an independent telecommunications company to provide and also manage the telecommunications interests of the Group. Dancom Technologies is a telecom service provider pioneering new technology in the deployment of fiber optic cable network in Nigeria.
The Group acquired the assets of Oshogbo Steel Rolling Mills in line with the privatization programme of the Federal Government. The company currently operates as Integrated Steel Plc and produces steel bars and rods with a production capacity of 400,000 mt per annum.
Energy: Refinery, Oil and Gas
The Group is a strategic investor in a number of upstream oil and gas projects in Nigeria and is at an advanced stage of project development in the downstream sector. The Group has also ventured into power generation (coal), gas exploration and fertiliser production. The group is also about to complete in 2018, the first indigenous privately owned Dangote Petroleum Refinery and Petrochemical plant in sub Saharan Africa.
Dansa Foods Limited manufactures and sells products in the Non Alcoholic Ready to Drink (NARTD) market of the Nigerian soft drinks industry.
The Dangote Group currently has four listed companies on the Nigerian Stock Exchange (NSE) as part of its vision of being a world-class organisation. They include Dangote Cement Plc, Dangote Sugar Refinery Plc, Dangote Flour Mills Plc, and the National Salt Company of Nigeria (NASCON). Dangote Cement is the biggest quoted company in Nigeria, accounting for about 30 percent by volume of the NSE. This follows the historic merger between Dangote Cement Plc and Benue Cement Company Plc (BCC), on October 26, 2010.
CORPORATE SOCIAL RESPONSIBILITY INITIATIVES
As should be expected, Dangote Group is fully involved in Corporate Social Responsibility activities, which it executes through the Dangote Foundation. The Foundation intervenes in the areas of health, education and empowerment. The Foundation is also involved in providing humanitarian aid to victims of natural disasters both within and outside the shores of the country.
The Dangote Group has resolved to touch the lives of Nigerians and is committed to complementing government’s initiatives in making the economy private sector-driven. Dangote Group is today a testimony of successful and rewarding private entrepreneurship.
• Dangote Cement Plc is currently the largest quoted company on the Nigerian Stock Exchange (NSE) accounting for about 30 percent of the entire market capitalization
• Dangote Cement Plc is also the biggest quoted company in West Africa.
• Dangote’sObajana Cement Plant is the largest cement plant in Sub-Saharan Africa with a current capacity of 10.25 million metric tonnes per annum.
• Dangote Sugar refinery is the largest sugar refinery in Sub-Saharan Africa and the second largest in the world.
• Dangote Group is currently building the first privately-owned petroleum refinery in Lagos and also owns the largest fertiliser plant in Africa located in Edo State.