The President/Chief Executive of the pan-African conglomerate, the Dangote Group, Aliko Dangote, has become the first African entrepreneur to lay claim to a $20bn fortune, thus becoming one of the 25 richest men in the world. This is on account of the stock value of his largest holding, Dangote Cement, leaping about three-fourths since March when Forbes released its annual ranking of the world’s richest people. Dangote’s 93 per cent stake in the cement company is now worth $19.5bn, according to the magazine. Dangote Cement becomes the first Nigerian company to achieve a market capitalisation of over $20bn. Added to this are his controlling stakes in other publicly-listed companies like Dangote Sugar and National Salt Company of Nigeria, and his significant shareholdings in other blue-chip companies like Zenith Bank Plc, UBA Group and Dangote Flour; his extensive real estate portfolio, jets, yachts and current cash position, which includes more than $300m in recently-awarded Dangote Cement.
Forbes reported that the Nigerian billionaire was now richer than Russia’s richest man, Alisher Usmanov; India’s Lakshmi Mittal; and running neck and neck with India’s Mukesh Ambani. According to the magazine, he is catching up to such Americans as Google’s billionaire founders, Larry Page and Sergey Brin. It will be recalled that Dangote Cement had recorded an unprecedented surge in its share price largely due to market response to the company’s impressive results in the first quarter of this year. The cement manufacturer’s un-audited results for the three months ending March 31, 2013, had showed that the company’s pre-tax profit rose to $339m, representing an 80.6 per cent increase from last year, and a strong indicator of the company’s future earning potential.
The results also indicated a 79.5 per cent rise in its earnings per share over the corresponding period last year. The Head of Investor Relations in the United Kingdom, Dangote Cement, Mr. Carl Franklin, explained in an email response to Forbes that the company’s share boost in the first quarter of 2013 was because it had a huge increase in demand across Nigeria, considerable improved gas supply and ramped up capacity. Franklin said, “So, Q1 was the first sign of just how profitable we can be in Nigeria. The amazing thing is that 66 per cent of our gas-fired production in Q1 was done at 84 per cent gas. Imagine what would happen to margins if we did the same amount at 95 per cent. This has given investors a good sense of what we can really do when everything goes in the right direction.
“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.” Forbes in its report reasoned that other companies might eventually achieve this, but it was going to take a bit of time. Dangote Cement currently accounts for more than a quarter of the total market capitalisation of the Nigerian Stock Exchange. The second largest company on the NSE is currently Nigerian Breweries Plc, West Africa’s largest manufacturer of alcoholic and non-alcoholic beverages, which has a market capitalisation of $8.5bn.
Dangote made a debut on the Forbes billionaires list in 2008 with a fortune pegged at $3.3bn. His fortune dropped to $2.5bn in 2009 and plunged further to $2.1bn in 2010. His fortune surged 557 per cent in 2011 to $13.8bn after he took Dangote Cement public. Dangote dropped to $11.2bn in last year’s rankings, but rebounded at $16.1bn this year. Since March, his fortune has jumped another 30 per cent. Dangote started building his fortune over three decades ago after taking a loan from Sanusi Dantata and started trading in commodities like flour, sugar and cement.
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