Aliko Dangote: The Ultimate Volume Player
Aliko Dangote, 40, president of Dangote Group of Companies is a testimony to great success of private entrepreneurship in managing the Nigerian economy. From modest beginning in the late 1970s, he has today built a multi million naira conglomerate. Dangote has many thing going for him. The right family pedigrees, hardwork, foresight and the resources to be a volume player.
Born in Kano, reputed for its groundnut pyramids, to Mohammed Dangote, a business associate of Alhassan Dantata, and Hajiya Mariya Sanusi Dantata, Alhassan's grand daughter. This rich business background provided the launching pad for Dangote. He started out understudying his uncle, Sanusi Dantata before setting up his own business in the late 1970s with a loan from his uncle. Dangote moved from Kano to Lagos where he participated in the massive importation and sale of cement needed for the country's development. Having cut his business teeth here and made his seed money, Dangote has never looked back till date. From his Osborne Road office in Ikoyi, Lagos, he directs a business that has diversified from its early concentration on commodity trading into banking, agriculture manufacturing, textile and transportation.
Dangote made his name in commodity trading especially sugar importation into Nigeria which he admits he controls over 60 percent today. Given the heavy demand by Nigeria's soft drink industry, breweries and confectionery industries for sugar, he makes a kill by doing volume business and gaining advantages to undercut competitors. Dispelling rumours of his cornering the market with the connivance of government support, he says it is an open market but because of his enormous investment in the business and his transport haulage business, he can distribute his sugar faster, cheaper and at a uniform prize nationwide which the competition cannot match. Dangote is reputed to have good investments even in foreign-based sugar refineries that supply him.
His business interest spans the export and import business. He exports cashew nuts, cotton, cocoa, millet ad textile. His extensive network enables him to source these commodities not only in Nigeria but the entire west coast of Africa where he is increasingly becoming a visible player. He also exports fish. Interestingly, he started out importing fish but when the local market proved difficult and less profitable, he diverted his supplies to the export market.
Dangote also imports and sells rice, vegetable oil, and cement. He employs similar strategies in the distribution of these commodities as in the sugar business. In December 1996, Dangote says, in response to a mandate from government, he imported and sold so much rice that the local market crashed by almost 80 percent. Right from the 1980s, Dangote decided to move from being just a successful commodity dealer to a more rounded entrepreneur with solid investments in finance and manufacturing. his style was acquisition and buying into existing companies.
He started out with Dangote General Textile Product which he acquired form its former owners thereby establishing control over the source of his trade. In 1993, he acquired controlling shares in the Lagos-based Nigerian Textile Mills. He invested enormous resources in re-capitalising, refurbishing its machinery and restructuring its management. And within a few years, he turned it from a loss maker back to its days of good profits. Looking beyond just making and exporting textile materials, the Dangote Group is exploring opportunities to manufacture jeans materials for the export market. Even in Sugar, Dangote currently has a joint venture with Pakistanis to set up a refinery in Nigeria to locally make sugar to cap his years of sugar business. Dangote bought 40 percent shares of the Nigerian Salt Company to broaden his investment portfolio and has three directors on the company's board to oversee his interest there. With this pep, National Salt is expected to become a strong contender for control of Nigeria's salt market.
Newswatch June 29, 1998
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" Newswatch 1998