Nigerian billionaire and Africa’s richest man Aliko Dangote has become
the first African entrepreneur to lay claim to a $20 billion fortune as the
stock value of his largest holding,Dangote Cement, leaped just about
three-fourths since March when Forbes released its annualranking of the
world’s richest people.
Aliko Dangote’s 93 per cent stake in the cement company is now worth $
19.5 billion. Add this to his controlling stakes in other publicly-listed
companies like Dangote Sugar and National Salt Company of Nigeria and
his significant shareholdings in other blue-chips like Zenith Bank, UBA
Group and Dangote Flour; his extensive real estate portfolio, jets, yachts
and current cash position, which includes more than $300 million in
recently awarded Dangote Cement dividends, Dangote is now worth more
than $20 billion.
Put into context, the Nigerian billionaire is now among the top 25 richest
people in the world, richer than Russia’s richest man, Alisher Usmanov,
richer than India’s Lakshmi Mittal and running neck and neck with India’s
Mukesh Ambani. He is catching up to such Americans as Google’s
billionaire founders Larry Page and Sergey Brin.
The unprecedented surge in Dangote Cement’s share price is largely a
market response to the company’s impressive 2013 Q1 results.
The cement manufacturer’s unaudited results for the three months ending
March 31 showed that the company’s pre-tax profit rose to $339 million,
representing an 80.6% increase from last year and a strong indicator of the
company’s future earning potential. The results also indicate a 79.5 % rise
in its earnings per share over the corresponding period last year.
Explaining the company’s share price boost in an email to Forbes, Carl
Franklin, Dangote Cement’s Head of Investor Relations in the U.K said
that in the first quarter of 2013, the company had a huge increase in
demand across Nigeria, gas supply improved considerably and the
capacity was much more ramped up.
“So Q1 was the first sign of just how profitable we can be in Nigeria. The
amazing thing is that 66% of our gas-fired production in Q1 was done at
84% gas. Imagine what would happen to margins if we did the same
amount at 95%. This has given investors a good sense of what we can
really do when everything goes in the right direction,” Franklin said.
With a current market cap of $20.5 billion, Dangote Cement becomes the
first Nigerian company to achieve a market capitalization of over $20
billion.
“It’s certainly a landmark for a Nigerian company and we’re proud to be
the first to achieve it. Obviously we are focusing on building long-term
and sustainable value for shareholders through our investments in Nigeria
and Africa. Nigeria is a very entrepreneurial country and I can assure you
that other companies will follow us in achieving this.
”
Other companies might eventually achieve this, but it’s going to take a bit
of time. Dangote Cement currently accounts for more than a quarter of the
total market capitalization of the Nigerian Stock Exchange. The second
largest company on the Nigerian Stock Exchange (NSE) is currently
Nigerian Breweries, West Africa’s largest manufacturer of Alcoholic and
non-alcoholic beverages. The company has a market cap of $8.5 billion.
Dangote debuted on the FORBES billionaires list in 2008 with a fortune
we pegged at $3.3 billion. His fortune dropped to $2.5 billion in 2009 and
plunged further to $2.1 billion in 2010. His fortune surged 557% in 2011
to $13.8 billion after he took Dangote Cement public. He dropped to $11.2
billion in last year’s rankings, but rebounded at $16.1 billion this year.
Since March, his fortune has jumped another 30%.
Dangote was destined to shine in business. At age 8, he apparently gave
packets of sweets he had made to the house servants to sell for him. His
father Mohammed Dangote was a successful businessman and an
associate of his maternal uncle Alhaji Sanusi Dantata. Dantata and his
brother controlled the trade in kola nuts and livestock conducted by 200
agents. Dangote started building his fortune over three decades ago after
taking a loan from Sanusi Dantata. He started trading in commodities like
flour, sugar and cement.
He became a billionaire by later manufacturing these items. He started
making pasta, salt, sugar and flour in 1997. But he found his gold mine in
cement, when he was awarded a government’s state owned cement
business in 2000 and began building his own plant in 2003. He listed
Dangote Cement in 2010.
Today, it is Africa’s largest cement company providing cement to Nigeria
and other African countries that otherwise would likely have to pay to
import much of the materials.
Dangote still likely has bigger ambitions. He told Forbes Wealth Editor
Luisa Kroll at Davos in 2011 that he expected his firm to have a market
cap of $60 billion within five years. At $20.5 billion, Dangote Cement still
has a long way to go to live up to that dream, and while it is quite unlikely
that Dangote Cement could hit a $60 billion Market Cap by 2016, don’t
write it off as ‘impossible’. With Dangote, you never know.
The Nation Newspaper
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