Aliko Dangote Is Africa'sFirst $20 Billion Man -Forbes

Dangote has been named Africa's
first $20billion man, thus
becoming one of the top 25
richest people in the world. From Forbes 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 annual
ranking of the world’s richest
people. Aliko Dangote’s 93% 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.
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