Dangote Group, controlled by Aliko Dangote, is planning a 16 billion dollar expansion over the next four years. The company is looking to expand operations in 18 different countries and is targeting a range of industries. If the investment pans out, it will be one of the largest investments ever made by a private company in Africa.
Mr. Dangote, of Nigeria, is Africa’s richest man with an estimated net worth of $20.8 billion dollars. He was the first African to break the $20 billion dollar mark. The second-richest African is Johann Rupert with a net worth of $7.9 billion dollars. Nigeria has enjoyed a long period of economic expansion, even in spite of terrorist attacks, due to an oil boom, which has made a select group of people very rich.
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Investment to be diversified across multiple sectors
The investment will be spread across a total of 18 countries and in a range of industries. Billions will be spent to expand cement production, to support agricultural operations, and to expand energy supply. The scope and scale of the investment makes it one of the largest investments in Africa, and perhaps the largest ever led by a sub-Saharan African company. The investment should help Dangote Group expand by as much as 30% next year.
Dangote Group plans to spend $4.7 billion dollars on cement production alone, with investments across numerous nations. The expanded capacity should help the region meet its demand for building materials as countries continue to develop. Another $2.3 billion dollars will be spent to expand rice and sugar production. The company expects annual sugar production to double by 2017.
Dangote Group one of Africa’s largest companies
Under Aliko’s lead, Dangote has grown into one of the largest companies in Africa. The diversified conglomerate produced over $2.6 billion dollars in revenue in 2012. The company is heavily involved in the production of cement, salt, sugar, rice, and flour. The company appears to be positioning itself to expand in more advanced areas of the economy, such as electricity production. Currently, the company has a market capitalization of above $14 billion dollars.
Mr. Dangote claims that his company is as concerned with creating jobs as it is with producing profits. This is one of the principle reasons that the company continues to expand its agricultural activities, because doing so creates the most jobs. With Nigeria and other African nations still suffering from high unemployment rates, creating employment opportunities is a priority.
Now, with the company poised to expand, it could become one of the region’s principle drivers of growth. Africa has enjoyed considerable success in recent years, but the region is still home to many of the world’s poorest countries. With Western markets stagnating and growth cooling off in Asia, however, there is hope that Africa can become an engine of growth and sustain high growth rates in the future.