In 2010, for instance, as Lafarge set up a packing plant in Ogun state, Dangote dropped its prices to squeeze its rival’s margins. A few weeks later Dangote put its prices back up, says an executive in Nigerian industry.
“It sent out a strong message, that he’s in control,” said the executive, who would not be named.
Nor does Mr. Dangote shy away from using litigation. He is currently embroiled in a legal tussle with one of his arch-rivals in the cement business, Cletus Ibeto.
Former president Mr. Obasanjo shut down Ibeto’s cement plant for allegedly claiming investment tax breaks on false pretences. When Umaru Yar’Adua became president in 2007, he reopened Mr. Ibeto’s business and gave him preferential import duties and zero VAT to compensate him for losses under Mr. Obasanjo.
Now Mr. Dangote is asking a court to cancel those tax breaks. And in a country where the bigger fish tend to win, few think Mr. Ibeto stands a chance. Mr. Ibeto did not return calls for comment.
Mr. Dangote says he always acts lawfully, and that one particular source of irritation to competitors – the five-year tax holiday he got on all his factories – is available to any Nigerian business if they promote domestic industry. Such tax breaks are open to companies that receive “pioneer status,” which dozens of Nigerian firms have. To get it, a company has to prove it has made substantial new investments, which none of Mr. Dangote’s competitors in the cement business have been able to do.
Supporters say Mr. Dangote demonstrates that Nigeria can succeed internationally in sectors besides fossil fuel extraction or online fraud, and that Africa can succeed in industry without having to rely on foreign investment from the West or China.
“He’s an African investing in Africa, creating jobs in Africa that will eventually build a sustainable middle class,” says Nigerian Stock Exchange director general Ade Bajomo. “The wealth created by Africans is the wealth that tends to stay onshore.”
The other lesson – that Africa must process the minerals it digs up if it wants to create jobs – chimes with what African leaders such as Uganda’s Yoweri Museveni have said for years.
With an annual turnover of $2.5-billion, the Dangote Group contributes nearly 1 per cent of the GDP of Africa’s second biggest economy, and employs 23,000 people in a country with massive unemployment.
Mr. Dangote also makes cement domestically on a continent with a booming population, dilapidated infrastructure and a chronic housing shortage.
“We are putting these cement facilities in sub-Saharan Africa where there is need,” he says. “The market is already there, so we are closing the gap between supply and demand.”
A London listing would mean replacing the board of Dangote Cement, of which he is chairman, as it is currently made up of dMr. Dangote’s relatives and close associates. Mr. Dangote says he is seeking an independent board; colleagues doubt he’ll find it easy to step back.
Analysts say the speed at which Mr. Dangote is building his pan-African empire is risky, citing project delays and management issues as their greatest concerns.
In a report in May, Renaissance Capital warned that his factories may struggle to get the gas supply they need, which would lower projected margins.
Another worry is that Mr. Dangote’s success in a corrupt, closed economy like Nigeria may not be easily reproduced in countries with a more level playing field.
“The question is: If you are good at doing business in Nigeria, does that mean you have a business model that can adapt to an environment outside Nigeria?” asks Antony Goldman, head of London-based PM Consulting, who lived in Nigeria in the 1990s. “Can he make it a global brand?”
Mr. Dangote clearly thinks so, though for the time being he wants to focus on sub-Saharan Africa. He says expansion is being financed by profits so that, when it’s completed, “we’ll not owe any bank money.”
“For now, we don’t want to have too many balls in the air, but of course we have ambition to expand (beyond Africa),” he says. Then, pausing to smile, he adds: “If you don’t have ambition, you shouldn’t be alive.”Report Typo/Error