“Dangote Cement listing on London Stock Market is not necessary” - Afripol

Aliko Dangote, the richest African capitalist is on a move and it is no surprise to global market observers and analysts that he is strategizing to list his $11 billion Dangote cement on London stock Market. With its vast expansion and investments beyond its primary base in Nigeria into the rest of Africa’s emerging markets, Dangote Cement without doubt needs more resources and funds to keep up with the pace of development.

Aliko Dangote plans to bring his profitable cement industry into listing on London Stock Market Exchange and Dangote Cement will be free-floating 20 percent stake in the company. The twenty percent is quite big compares to the five percent stake in Dangote Cement listed in Nigeria.

On a surface the participating and floating of the company’s stake is quite compelling because it will enable the company to do more with its expansion and also bolster the image of the company as an transnational corporation with a net benefit of a positive branding. But before the next year implementation of the plan, it is imperative that a profound feasibility studies must be undertaken and the right decision be made. A strategic outlook is necessary to avoid mishaps and pitfalls that may be encountered.

The exposure to London Stock Exchange will attract investors who can be brand critical and may not have patience when the stocks underperform in the cyclical downturn that defines market trends. With the company roots in Nigeria and Africa, a more adverse criticism and depressing analysis can follow put when inevitable mistakes are made which are inherent in management of any big corporation. Whenever political turbulence and disturbances occur in Africa, the prospective investors and stockholders may quickly sell and that will affect the bottom-line of the company.

Moreover the market for Dangote Cement is in Nigeria and Africa. Most of the demand for the Dangote Cement is in Nigeria and with the increasing expansion in Africa the demand for cement will continue to increase inorder to the feed Africa’s emerging markets.

Comparatively, the argument can be made that the market demand with the resources for the expansion can be found in Africa. The suggestive argument that resources for further expansion should be sought outside the shores of Africa has no legs. The money and capital for expansion of the growing Dangote Cement can be found in Nigeria and Africa. That does not translate that the scope and vision of the company should be limited to Africa but potential human and physical capital are not wanting in that part of the world.

The five percent stake in Dangote Cement in Nigerian Stock Market can be increase to up to 10-15 percent. Nigeria’s stock market has been bullish for Dangote Cement. Financial Times reported: “Dangote Cement’s net profit in 2011 is expected to be $790m on revenues of $1.5bn, according to guidance filed at the Nigerian Stock Exchange.”

The president of Dangote Group, Mr. Aliko Dangote was reported to have said that he desired to magnify his profit to enable him to upgrade the business into a huge multinational company and world’s largest cement industry with impressive profit. Yes, it is doable in Africa with sound management and strategic planning.

Emeka Chiakwelu, Principal Policy Strategist at Afripol, outlined the operational standing that, “African market can give the company the fund, resources, capital and the market to realize its ambitious project. But the company must be ready to work with both small and medium capital markets in the continent without looking outside the shores of the continent.”

A while ago, Dangote Cement opened a billion dollar cement industry at Ibese, Ogun state in Nigeria. With this investment resource, enormous profit can be made as the demand for building materials are edging up in the region. As result of demand of cement in Nigeria and Africa as economic growth in non-oil sector of the economy bulges, the accumulating profit will increase and market will be highly appreciated. The profit can be diverted for further expansion especially in research and development.

“With the economic growth of Africa hovering above five percent and Nigeria’s GDP edging up to seven percent for 2012, Dangote Cement can grow without seeking resources from London Stock Exchange,” as Chiakwelu pointed out.

“And the company’s expansion and building of cement industries in the eight African countries should not necessarily be simultaneous but can be realized with one construction after another,” Chiakwelu concluded.

Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa. http://afripol.org. This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Dangote Cement At a Glance:

Market Cap $12.51 B

Industry: Construction Materials

Country: Nigeria

Chairman/President: Aliko Dangote

CEO: Jagat Rathee Rathee

Employees: 3,468

Sales: $1.27 B

Dangote Cement Plc is a Nigeria-based company active in the building materials industry. The Company is primarily engaged in the operation of production facilities for the preparation, manufacture, control, research and distribution of portland cement and related products. It operates Obajana Cement Plant, which includes a captive gas power plant; a gas pipeline; a limestone quarry with associated conveyor belt; a dam impounding a reservoir with a total storage capacity of 5.1 million cubic meters and a housing complex. The Company also manages cement production plants in Gboko and Ibese, as well as four terminals, two in Lagos and two in Port Harcourt, through which it imports and bags cement. Dangote Cement Plc is a subsidiary of Dangote Industries Limited, which owned 99.95% of its issued share capital as of December 31, 2009.      -  Forbes Magazine

One-billion-dollar cement opened by Dangote Group was commissioned by President Goodluck Jonathan

Dangote Group opened a  one-billion-dollar cement industry at Ibese, in southwestern Ogun State. The chairman of Dangote Group is Mr. Aliko Dangote, a business magnate and seasoned capitalist has always been a committed investor particulary in Nigeria and Africa in general. With one-billion-dollar investment in Nigeria, it will kiick-off the drive for others to follow the foot steps of Dangote Group. This is one of the largest investment in the non-oil sector of the economy and this is significant to the economic wellbeing of Nigeria, as the country struggles to diverify its oil based economy.

In his own words the chairman of Dangote Group  Mr. Aliko Dangote said, "We are working towards making the company one of the eight biggest producers of cement in the world and with the commissioning of the Ibese plant, Nigeria has been transformed from major importer of cement to self-sufficient in production and export."

Nigeria's President Goodluck Jonathan was at hand to commission the Ibese cement plant and he was pleased with the investment. President Jonathan was quoted in a AFP report, "Whenever you call me to come and commission new investments, I will come again because these are the kind of stories we want to hear in Nigeria."

Nigeria needs a good news which has  not been coming lately, with the social unrest fueled by MEND and Boko Haram the country has been rocked with uncertainty. Inspitte of the social unrest the country's economy is expected to grow robustfully in 2012 at rate 6.7 percent to 7 percent.

The great thing about the one-billion-dollar cement plant is the job's avaliability and that will help to lower unemployment in the area. The new plant at Ibese will be producing six million metric tonnes of cement yearly and  together with Dangote Group other two cement plants,  the company will increase its  annual production capacity to 20.25 metric tonnes.

DR. ALIKO DANGOTE: AFRIPOL PERSON OF THE WEEK

Aliko Dangote is the brainy Nigerian based entrepreneur, the founder, CEO and president of Dangote Group. He is an industrialist, a manufacturer of commodities principally food and cement. The head office of Dangote Group is in Lagos, Nigeria but company's prowess is felt across Africa and beyond. Dangote can be described as the King of cement industry due to his vast, enormous and extensive investment in cement manufacturing throughout Africa.

No other Nigerian has done more than Alhaji Aliko Dangote for entrenchment, consolidation and promotion of capitalism, market economy and free enterprise particularly in Nigeria and Africa in general. With his industry, business acumen and dedication comes a great dividend and returns that has made Dangote the richest man in Nigeria and Africa. The world renowned capitalistic magazine Forbes has quantified his personal wealth at a tune of $10.1 billion and that is not bad at all for a person who started a business from a loan he got from an uncle. For his vanguard in business and investment in Nigeria, President Goodluck Jonathan awarded him Grand Commander Order of Niger,GCON, which he richly deserved and merit.

Forbes wrote that the "Nigerian commodities titan Aliko Dangote is also Africa's cement king. In late 2010, he listed Dangote Cement on the Nigerian Stock Exchange. The company integrated Dangote's cement investments across Africa, including Benue Cement, formerly listed on the Nigerian Stock Exchange. It's now the largest company on the Nigerian exchange, with a market capitalization of $10 billion. In August, Dangote received approval from the Central Bank of Nigeria to invest $4 billion to build a new cement facility in the Ivory Coast. He's also building a $115 million cement plant in Cameroon, and owns plants in Zambia, Senegal, Tanzania and South Africa, among others. Dangote started trading commodities more than three decades ago after receiving a business loan from his uncle. He then built the Dangote Group - a leading West African conglomerate with interests in cement manufacturing, sugar refineries, flour milling and salt processing. Venerable philanthropist has given away millions to education, health and social causes."

President Jonathan decorating Dangote with award

The great thing about Aliko Dangote is his commitment to Nigeria and Africa. Most of his investments are in Africa and with that he has shown that Nigeria and other African countries can be lucrative for investments due to large returns from them. Dangote is the largest private employer of labour in the continent and jobs given has aided to slow down rampant unemployment facing Nigeria and Africa. This has given hope to the youths and has sown the seed of fruitfulness in the emerging economies of Nigeria, Senegal, Zambia and many others in Africa. Dangote can now become a tril blazer, a role model to aspiring business executive and many rich Africans that they can invest in Africa's market. Dangote is the greatest rebranding that Nigeria needs because he has shown to the whole world by his handwork and patriotism that Nigeria and indeed Africa are ready for 21st century, that a century of innovations and possibilities can be spearhead by Nigerians and Africans.

For his unflinching patriotism, business commitment and investment in today and tomorrow’s Africa's, the board and staff of Afripol Organization chose the business giant and magnate ALIKO DANGOTE, THE PERSON OF THE WEEK.

Dangote and Adenuga as symbols of Nigeria’s growing economy

The two giant Nigerian business executives Aliko Dangote and Mike Adenuga making the powerful list of Forbes 2011 Billionaires of the richest people in the world is an omen of deepening Nigerian capitalistic economy. Nigerian economy is making an impressive growth that it can produce two-ranked of the richest business executives in the world.

Aliko Dangote, the Group President/CEO of Dangote Group ranked as the richest Nigerian and African with a net fortune quantified at $13.8 billion. Mike Adenuga, founder Globacom made The Forbes 2011 Billionaires’ List for the first time with a net worth of $2 billion, which is impressive and massive amount of wealth by any standard.

Although many were speculating that Adenuga’s worth was under quantified in the Forbes ranking. Mfonobong Nsehe‘s piece posted at Forbes blog had a quote from an individual in Lagos, "Globacom has 20 million subscribers- almost as much as MTN [another wireless carrier] does. MTN is worth $30 billion. Mike Adenuga owns Globacom. How can he be worth only $2 billion? It is not possible. Have you forgotten that he also owns Equatorial Trust Bank- Nigeria’s largest privately held bank? Don’t you know that he owns Conoil Producing- Nigeria’s first indigenous　Oil exploration　company? Do you know that he owns the highest stake in Conoil Marketing? $2 billion is too small. If Mike Adenuga is poor, he’s worth at least $5 billion. You people should increase his net worth."

With $2 billion worth or more it is a herculean achievement to be at a pinnacle of capitalism in the global ranking of fellow capitalists and investors. That is a significant and enduring attainment by a Nigerian based capitalist.

Emeka Chiakwelu, principal policy strategist at Afripol commented on the growing impact the billionaires are having on Nigeria’s image and economy, "With business executives and billionaires of Alhaji Dangote and Mr. Adenuga statures, Nigerian image is being remake as a destination for capitalism, profit and land of investments. This is great for our country Nigeria, it will help to rebrand Nigeria and attract foreign investors."

The most encouraging thing about the two richest Nigerians are their unflinching confidence in the economy of Nigeria. Another issue that worth to be recognized was that all their wealth was basically made from investing and growing businesses in Nigeria. This must send the right signal to both local and foreign investors that Nigeria is ready to grow their money and yield possibly the largest dividend in Africa if not in the whole world.

Nigerian economy has been growing impressively and it is the fasted growing economy in Africa. Nigeria‘s economy is accelerating at a growth rate of 7.4 percent in the first quarter of 2011. Although the vulnerability of rising inflation at above 13 percent is being monitored by Sanusi’s Central Bank of Nigeria (CBN) and will utilized all the effective monetary policies at his disposal to rein in the rising inflationary trends.

The Nigerian billionaires must not relent on encouraging economic expansion by committing to Nigerian and African economies which have been always their hallmarks. Aliko Dangote already "has started building investments in cement plants and terminals across Africa including Senegal, Zambia, Tanzania, Congo, Ethiopia, Cameroun, Sierra Leone, Ivory Coast, Liberia and Ghana," writes Tatiana Serafin in her Forbes’ blog.

According to Serafin’s piece, Mike Adenuga’s "Globacom launched services in Nigeria in 2005, in the Republic of Benin in 2008 and has licences to operate in Ghana and Cote d’Ivoire (with Togo and Senegal next). He took a big gamble laying a $1 billion undersea fibre optic cable, Glo-1, to link Africa with the rest of the world. (Partnered with Alcatel-Lucent) The connection will help lower prices for customers as well as help Adenuga expand more quickly."

The emerging Nigerian business executives and Nigerian universities especially the business schools should look up and willing to learn from the two most successful Nigerian billionaires. Our universities must create curriculums on teaching students the models of operations and methodologies employed by the business trail blazers.

The point here is that Nigeria is already showing its relevance as a powerful emerging market by the quality of business tycoons emanating from the second largest African economy.

Afripol Organization calls for recalibrating of Nigerian Stock Exchange (NSE).

 Nigerian Stock Exchange (NSE) for sometime now is encountering numerous problems ranging from illegal and inside trading to financial mismanagement. Stock Exchange Market in global financial circle is seen as the bellwether and presage of the health of an emerging economy like Nigeria, therefore it has become necessary, if not imperative that some sort of reform must be administered and instituted in order to revamp the exchange market

 For any nation that is serious about furthering capitalism on its soil, it must acknowledge the important role occupied by Stock Exchange Market for fuelling and financing industries in the capital market. Nigeria must be very concerned about perceived integrity and transparency of her financial and capital markets for her economic growth and full participation in the current global economy.

 Aliko Dangote, President of the Nigerian Stock Exchange (NSE) recently accused the institution of being financial strapped due to mismanagement of its fund. The president of NSE stressed that the poor management and paucity of fund do not give the leverage for NSE to meet its obligations to stakeholders in the capital market.

 NSE plays a vital role in an economy of our country especially Nigeria as an emerging economy must be careful about the image and the underpinning importance of its capital market. Nigeria cannot afford to undermine the trust of the global capital market traders. The consequence will encourage capital flight and withdraw of resources from the market.

"Dangote accused NSE’s management of dipping its hands into the finances of its subsidiary, the Central Securities Clearing System’s (CSCS) accounts to borrow N 900 million to support its cash deficit position.

 Dangote further revealed that the NSE is indebted to the tune of N 119.5 million to Accenture auditing firm and that it has decided to stop additional work on executive selection, trading platform selection completion and implementation of the operating model for which the Exchange engaged its services, until all outstanding invoices are duly paid."

 Nigerian Stock Exchange (NSE) must not be allowed to become a weakened institution; for the ramifications could cause enormous damage on the growing economy. The deterioration of NSE will retard economic development in Nigeria. NSE is the contact point that brings buyers and sellers of stocks through their registered brokers. The capital and money raised by companies from capital market helps to support research and development, financing of new business entities which bolster economic development.

Nigeria with a strong population base and an expanding middle class sector, nurses the vision of becoming one of the largest economies by year 2020. The NSE can play a vital role in Nigeria’s ascendency to a well managed and optimum productive economy. Moreover the foreign investors are attracted to economies where capital can be raised for growing their companies. Nigeria cannot transform her economic woes by solely on public sector; Nigeria needs private sector with its creativity to grow her economy and starting creating ample jobs for underemployed and unemployed. A strong, reliable and well managed NSE can lay the foundation and become the catalyst for economic growth for Nigeria’s emerging economy.

Afripol Organization recognizes the significance of a self- sustaining and a healthy capital market which is key ingredient for a well regulated commerce, trade and industry in a capitalistic economy. A flourishing economy needs a reliable Stock Exchange Market.

Vincent Ogboi, Senior fellow, economic and financial analyst on African affairs at Afripol, reaffirmed the urgency for reform: "A renowned Nigerian industrialist and President of NSE, Mr. Dangote, also an insider sounded an alarm bell that the Nigerian Stock Exchange is "broke". This coming form an inside player cannot be blown off as just another empty cry for investigation of perceived enemies. The culture of pervasive corruption that has gone unabated since Nigeria’s independence has predictably taken over and erodes the trust of many in the Nigerian Stock Exchange. Once again, hard working average Nigerians who are always asked to play by the rules, are left holding the short end of the stick."

Referring to the recent history of mismanagement of priorities at NSE, expert Ogboi stressed: "The Nigerian Stock Exchange, headed by Dr. (Mrs) Okereke, is widely known for corrupt practices that are never investigated even when evidence abound. The Present Nigerian President, Mr. Jonathan Goodluck, in a swift move realizing the possible damaging impact this could bring to the comatose and oil dependent economy, sacked Mrs. Okereke. Mrs. Okereke’s position has been very controversial especially in the last few years since she started dabbling into other private business ventures that are in obvious conflict with her position as the head of the Stock Exchange. Her closeness to previous and corrupt past Nigerian politicians has certainly not helped the situation."

Emeka Chiakwelu, Principal Policy Strategist at Afripol, supports reforming NSE, "For Nigeria to move forward with a robust economic development especially in the private sector a well regulated and financially managed NSE must be present. Our country must summon the courage to do the requisite reforming of NSE to bring about a revamped outcome."

Dr. G. Stanley O'Koye, chief medical correspondent at Afripol, added that reforming the NSE can be a great tremendous help to the quality and efficiency of health care delivery in Nigeria: "when we have a solid and reliable NSE, many start-up and newly emerging biotech companies and venture capitalists in the area of health and medicine can confidently go to capital market to raise money to embark on their health care ventures. Pharmaceutical and biotech companies producing drugs can easily raise capital to manufacture their brand name drugs in the country. Therefore a corrupt free NSE can significantly help to restore health industries as thriving entities. In addition, a corrupt free NSE will facilitate the establishment of publicly traded third party insurance or health management organizations (HMO), and hence promote the delivery of quality health care to Nigerians."

Africa Political and Economic Strategic Center (Afripol) is foremost a public policy center whose fundamental objective is to broaden the parameters of public policy debates in Africa. To advocate, promote and encourage free enterprise, democracy, sustainable green environment, human rights, conflict resolutions, transparency and probity in Africa.