Dangote: Opening new investment frontiers

obajana_TRUCKS“I have more confidence in Nigeria than in any other country. I will keep investing” -Dangote

World’s famous author on money books George Samuel Clason wrote in his: The Richest Man in Babylon, “Money is plentiful for those who understand the simple laws which govern its acquisition.”
Africa’s richest man AlikoDangote arguably knows these simple laws, one of which is never to rest on your oars, as he opens new investment frontiers.

Despite making it to the top in Africa with a net worth of $13.8 billion in March 2011, according to Forbes Magazine, the world’s 51st richest person is planning to build yet Africa’s biggest fertilizer company.
With this, the Dangote fertilizer project promises to provide additional 7,000 jobs.
This would add to the over 25,000 workforce that is already on the pay roll of the West Africa’s giant conglomerate-The Dangote Group.

Few weeks back, the group had taken delivery of 5,000 trucks in its bid to crash cement prices in Nigeria, an exercise that is expected to provide additional 15,000 jobs.
The group’s Savannah Sugar Company Limited (SSCL), with staff strength of 5,472, is the second largest employer of labour in Adamawa State. Last two years, N25 billion was invested into the company.

The Dangote’sObajana cement factory also has about 1,500 workforce. This is apart from other businesses that grow around it, including the springing up of banks. It is the largest cement factory in West Africa.

The Dangote Industries Limited is also the core investor in the Benue Cement Company (BCC). It has so far invested more than N42billion into the Benue Cement Company since acquiring a majority stake in the company in 2004. It also plans a new N102billion cement factory at Ibeshe, Ogun State which will take off this year. The Ibeshe plant would provide job to some additional 600 people.
With a turnover volume of around $3billion, the Dangote Group is not only creating quality jobs, it also pays an average annual tax of N50billion to the federal government.

Being  the largest industrial conglomerate in West Africa, the Group’s huge investments cover a wide range of sectors and products including: textile, flour, pasta, technologies, power, sugar, salt, tomato, cement, beverages, oil and gas as well ass transportation etc.

The new multi-billion naira fertilizer factory, when completed, would help in reducing the spiraling unemployment quandary bedeviling the country.  

Stakeholders say the fertilizer project is coming in the fullness of time as Nigeria is said to be sitting on a socio-economic powder keg, while the predicted time bomb ticks.

Dangote Group of Companies has since signed an agreement with Saipem Contracting Nigeria Limited for the commencement of work on Fertilizer Company.  Production of fertilizer in the plant is expected to commence in 2014.

President of Dangote Group AlikoDangote and the country manager of Saipem Group, who is also the managing director of Saipem Contracting Nigeria Limited Mr. Giuseppe Surace signed the agreement relating to engineering works for infrastructure that would launch the construction of the fertilizer project.

The plant, located in Edo State, the company said, “would be an excellent example of how to utilize a substantial amount of the country’s significant gas resources, as raw materials in the Ammonia-Urea fertilizer process.  Ultimately, the project, when completed, would make the country self-sufficient in fertilizer production, thereby saving it the huge foreign reserves presently spent on importation of fertilizer.”

With the agreement, Saipem is to build for the Dangote Group, a fertilizer plant for the production of 7.700 MTPD of granulated Urea, (two trains with a production capacity of 3,850 metric tons each per day).

The plant will be the largest in Africa as its closest competitor has installed capacity of only 1,000 metric tons per day of Ammonia and 1,500 metric tons per day of Urea compared with the Dangote plants of 2,200 metric tons per day for Ammonia and 3,850 metric tons per train per day of Urea.
After the official signing ceremony, Dangote said he strongly shared the view of President Goodluck Jonathan that the country should not be importing those things in which she had the raw materials and natural advantage for local production and fertilizer is one of such products.
“There is no reason why Nigeria should be importing fertilizer. I am happy that with this agreement, by the time our plant is completed and commissioned, the country will become self-sufficient in fertilizer production and even have the capacity to export the products to other African countries. Right now, farmers are forced to utilize whatever fertilizer that is available as they have no choice. But we need to know that the fertilizer that will work in Jigawa State may not be suitable in Adamawa State, as they may not have the same soil type and composition. The same fertilizer you use for sorghum may not be the fertilizer you will use for sugar cane,” Dangote said.

In addition, he said: “There is no way we can on an annual basis be able to import over one million tons of fertilizer through the ports. There are issues of the capabilities of the Ports and transportation. But where are the ports? Even where you have the ports where are the modern equipments for their operations? We don’t have a good network of roads for evacuation. Anytime you have two or three ships of fertilizer docking, transporters will capitalize on the situation and continually increase the freight charge. Most time, the fertilizer ship arrives late and out of season. By the time we have the Dangote fertilizer plant on the ground, all these distortions will be removed and our economy will boom, because the agriculture that is already contributing 46-47 per cent to the GDP, will drastically increase its output and contribution to GDP.”

Dangote, who is also the chairman of the Federal Government Committee on Job Creation had said during a recent chat with newsmen that  the federal government must do all things possible to make sure that companies are not allowed to collapse, and that can only be possible through policy stability and the provision of business friendly environment.

Most Nigerians believe that what Nigeria needs now is more of Dangotes that would provide jobs for the 600,000 graduates, and the youths which constitute the largest percentage of the country’s population.

It is not only in Nigeria that the Dangote Group is creating jobs. The group is doing the same in 13 African countries, with huge investments presence.

It is against this backdrop that last year the Federal Government described AlhajiDangote as a rare breed who has contributed enormously to the growth of the economy and the country, especially in his role as the Chairman of the National Committee on Job Creation.

In the words of OlusegunAganga: “I want to extend my appreciation to AlhajiAlikoDangote for the tremendous job he did and has continued to do as the chairman of the Presidential Job Creation Committee, a committee I inaugurated last year as the chairman of the National Economic Management Team (NEMT). AlhajiAlikoDangote has shown himself a trailblazer. Not only has he grown his business to global reckoning, but in reaching out to help small businesses gro
w through this initiative, he is establishing new standards of corporate behaviour for blue chip companies.”
It would be recalled that the Federal Government had earmarked N50 billion for job creation in the 2011 budget.

Abubakar writes from Abuja

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