Dangote Group

Overview

Dangote Group was created in the late 1970s, when Aliko Dangote established a venture that traded sugar and other consumer goods, which was funded by a $3,000 loan from his grandfather. Later, the group would gradually expand into trading other commodities, such as rice. In 1981, he established two business enterprises, Dangote Nigeria Limited, and Blue Star Services, this was a period when import licenses were required to import bulk commodities, the firm then sought to acquire import licenses for various commodities including steel, baby food, and aluminium products. He then added the shipping and the importing of cement to his group's portfolio. Dangote competed with Lafarge, a French company that imported and produced the bulk of African cement, which remains a major rival.

When the import license era was discontinued in 1986, the firm concentrated in bulk importing of salt, sugar, and rice and gradually reduced its cement business.

Manufacturing

The group's first foray into manufacturing began in 1989 with textiles Mills Limited, operating two operations, a textile weaving mill in Kano and the Nigerian Textile Mills limited's plant in Lagos. Beginning in 1997, following a decline of the textile sector, the company concentrated on manufacturing consumer goods it was importing into Nigeria such as sugar refining and flour milling, with the former it competed against imported products from Brazil and Europe. One of the biggest distributors of sugar in Nigeria, Dangote sugar refinery began local production in 1999. The strategy towards backward integration led to the establishment of a pasta plant and also flour milling to supply raw materials for making pasta. The company then invested in a cement manufacturing venture at Obajana, Kogi State, with an aggressive strategy, the Obajana plant began production with 5 million tonnes of cement. The group later invested funds in another cement operation at Ibeshe, Ogun State to shore up the local manufacturing sector from about 2.5 million tonnes to up to 8 million tonnes. To reduce economic and political risk within the country, the group began looking for opportunities to expand beyond Nigeria. The company's strategy then focused on continental expansion with the building and acquisition of cement plants in African countries.

Today, the Dangote Group is a diversified conglomerate, headquartered in Lagos, with interests across a range of sectors in Africa. Current interests include cement, sugar, flour, salt, seasoning, pasta, beverages and real estate, with new projects in development in oil and natural gas, telecommunications, fertilizer and steel. Competitors in both Nigeria and other portions of Africa include Stallion Group.

Subsidiaries

Dangote Cement, the largest cement production company in Africa, with a market capitalization of almost US$14 billion on the Nigeria Stock Exchange, has subsidiaries in Benin, Cameroon, Ghana, Nigeria, South Africa and Zambia. In December 2010, the group signed an agreement with the Government of Zambia to construct a US$400 million cement plant in Zambia. It was completed in 2015 and is located in Ndola, The plant produces 42.5-grade cement, competing with the dominant 32.5-grade products in the market. The new plant is expected to have an annual output of 1.5 million metric tonnes of cement.

Dangote Sugar is another major subsidiary of the group, competing with Bua Sugar and Golden Sugar Co. Dangote Sugar is the largest sugar refining company in sub-Saharan Africa.

Petrochemicals

The group has also diversified into oil and gas-related ventures, establishing a 3 million tonnes fertilizer plant, petroleum refinery capable of refining 650,000 barrels of oil and a petrochemical operation. Dangote Refinery was inaugurated in May 2023, and will be the largest single train refinery in the world at full capacity.

Nigerian businesses