Hi everybody. I'm Nicolola Tangan, the CEO of the Norwegian Sovereign Wealth Fund, and today I have a real pleasure sitting down with Aliko Dangote. Aliko is the founder and the CEO of the Dangote Group, Africa's largest industrial conglomerate. Nearly 50 years ago he started with a small trading firm in Nigeria and today his empire stretches across the continent. He has built what many said was impossible, a large-scale African industry from scratch. Warm welcome.
Thank you very much. It's a pleasure having you. Great to be here.
Well, I started as a trading company in 1978.
And what kind of things did you trade?
Cement at that time. I started first with cement. I was getting four or five trucks and trading them there in Lagos. And then later on I got into fish, into rice, into sugar, and we started, we continued to expand. My first import of sugar was actually in 1980.
You know, and everything was under import license. So I got a license.
I mean, your family had been into trading for several generations, right?
Several generations. My great-grand, you know, from the maternal side, my mom's grandfather, they call him Alhassan Dantata, he was actually even trading, you know, Nigeria, Ghana, you know, and he died in 1955 before I was born. But he was the richest West African at that time during his time. And of course, my own late grandfather, Sonus Dantata, he was actually the richest Nigerian too at some point.
And you grew up with your grandfather?
I grew up with my grandfather because my father died when I was just about 8 years old, you know. So, but I...
Was it your grandfather who taught you how to trade?
Who taught me how to trade? He sent me to school and this. But then, actually, I never ever grew with my father. I've never stayed with my father, you know, because when I was born I was the first grandson, and you know, in our tradition, the first grandchild will now go and stay with the grandparents.
So my sister, my late sister, happened to be the first grandchild. So they took her away, and then the next was me, a boy. So they also took me away. So both me and my sister, we grew up with my own grandparents.
What's the key to trading?
Well, the key first of all is actually discipline. You have to be very, very disciplined. You have to know what to trade in. It's not that you be jack of all trades. No, you must choose what do you really want to do for your life, and then you pick up and concentrate on that. And then, pleasure and business, they don't mix at all. And that is the kind of discipline that I got. My grandfather used to start working from 6:00 in the morning.
And he worked till late, had a very simple life. Some days he'd drive himself. That is how simple that, you know, he was a very disciplined, honest person. I actually took a lot of things from him.
What did you take from him?
First of all, to be very honest, to make sure that you are fair to everybody, to be also generous. He was very generous. To tell you how generous he was, he gave out all his assets and money before he passed. And then also in terms of business, he has always been very, very, very, very fair.
When you say that business and pleasure don't mix, does it mean that you don't like what you do?
I love what I do. So when you look at the business, for example today, right? Why is it that people see that I work so hard? Do you know why? Because my business is actually my hobby. I take my business as a hobby. Because if I take it as a job, I won't work this hard.
I work, let me give you an example. I go to bed maybe sometimes 11, 12, but I wake up around 5 in the morning. I go to the gym. By 7:30, 8 I'm done. And then I go to my office and I work as hard as any staff.
And you are close to 70 now.
I'm close to 70. Yes, I'm 69. I turned 69 just a month ago. Actually, about 3 weeks ago, I turned 69. But I think that discipline is good because I don't want to let me tell you something, you know, Nicola. For example, when I decided to go into industry, you know what I did? I sold all my properties in the US. I had two houses in the US, big mansions, and I had a house in UK, and I wanted to really sit in Nigeria and concentrate. Why? You know, sometimes when you own a house, a holiday home anywhere, you have to create that time to go and use that property. So now my life is very simple. Wherever I go, I use hotels, I pay. When I leave, nobody will call me and say I have a burst pipe or something is wrong. So I'm committed to what I do, and I just don't do things off. I always create a vision. It's just like now we created a vision 2030, so that I know I have a target to meet.
I just don't do business on a normal basis. No, no, no. All my businesses, they are targeted.
How do you decide which businesses to be in? Because you could have chosen everything, and then you've had a few things and you focus in on fewer things.
Well, I first of all look at what do we need as people. What is it that we're supposed to be producing and we're importing? So we do what you call backward integration, which means what we are importing now, we produce it. You produce what we need, and we are now producing things that when you wake up as a human being every morning, you must use part of what we produce.
So that's like cement, sugar...
But you have also tried flour and you tried textile and you exited that.
I exited that. Yes, because of the foreign exchange challenges, that is why we left the flour, you know, meal. But today, we are very, very good in terms of exports. If you look at it now, part of what we are announcing is that when you invest in any of our business going forward, in the cement, for example, in the refinery, in the petrochemical, in the fertilizer, in the port, we guarantee to pay you dividend in dollars because we are very well into exports. 80% of our revenue will be in dollars. So that is why we are now saying that, look, yes, you can have a choice if you want for locals, we can pay you in naira. If you don't want naira, we want to derisk, you know, because most foreign investors sometimes when they invest in a company, what actually matters to them is that when they get their dividend, it's difficult to also get money to buy and remit your money. But we have addressed that issue. We are saying that, look, invest.
And you generally reinvest the money back into the business.
Oh, all our business, because if you look at Dangote Industries right from inception to date, we have never ever paid any dividend. If we are going to get dividend, we only get it from companies that we listed. But companies that are wholly owned by Dangote Industries, which they are not listed, we never ever take a dime out of the company.
But Aliko, when you look at the group now, what would you say are the, let's say, three most important decisions you have made that has made this a success?
Actually, major decision is to now go into cement in trying to save a lot of African countries because they are struggling. Cement was selling for $250 a ton in countries like Zambia, in Congo, Brazzaville, in Nigeria, you have to pay and wait for 3 months. So we realized that, look, people who are in cement, they are not really serious about making cement available. So we now came in and we have now invested heavily.
And you are in 14 countries in cement.
Now again, when you look at oil in Africa, we have a lot of countries that they produce oil but they don't refine. So they export the crude oil and now they import the products, and importation cost a lot of money.
It actually goes deep into our own reserves. So when I look at Nigeria, for example, today, I say, okay, fine, but we've been having fuel cues for 52 years. Sometimes people used to stay, during Christmas you might have to go and queue for two days trying to buy fuel for a country that produces oil. And we have tried government refineries, they all destroyed, they are not really doing well. So we said, okay, fine, let me take this bold decision.
So then you decide I'll make a refinery.
I decided that I'm going to make a refinery.
And let's make the biggest.
In the world, ever, 50% more than the biggest.
$20 billion of investment.
So we started with that. We launched the project in 2013. We have had issues of the land for 5 years. One land three and a half years, the other land one and a half years that we have not been able to get even access to it. All these were being blocked by what you call the mafia in oil business to make sure that we don't come and address these issues. But we were not deterred at all, we were actually focused. We knew what we are doing. And Nicola, when we started, right, the exchange rate of naira was 156. We even got up to 1,900. But we still went ahead. We had to build our port because there was no port in the country that could take those heavy equipment. One piece was 3,000 tons. We have another which is the regenerator. Then we have another piece which is the crude distillation unit. That one is 2,700 tons. So we have almost about 30 of these equipment. And we built the refinery importing most of these preheaters and in modular forms.
So you have to build a harbor, you had to build...
Roads, we have to do water. Water is 440 million liters of water, you know, which is treated water. So our water department alone is more than, let me say, in hectares, in size is more than 30 hectares.
How many people worked on this?
67,000 people worked on the building of the refinery. And it took us...
This is the size, that's the size of the town where I grew up.
Well, you know, but I mean, that is how we had to actually now because we are building something. And luckily, let me tell you what people don't know. Luckily for us, we didn't know what we were building. Because if I knew, I was faced with the plan and the drawings all at once, right? I wouldn't have built this refinery. I would have actually chickened out.
Yes. Because I mean, you know, when we started, you know, it's like you've started swimming across the ocean. When you get middle of the ocean, you realize that the tide was bad. When you go forward, it's bad. When you go backwards, it's bad. So you have to work forward, and that is what we did. We had to just keep working and working and believing that we will deliver.
Where did you get the money from?
We got a lot of support, you know. First of all, we were actually meant to fund most of this from our internally generated funds, but because of the devaluation, so we had to now rely on Africa Finance Corporation, Zenith Bank, Access Bank, UBA, and a couple of some of the local banks. But of course, we also have a very good relationship with Standard Bank of South Africa and at the beginning Standard Chartered Bank of UK. We were very, very, very, very lucky. And what happened when we finished the refinery, things now have turned out to be much more than our own expectations.
What are you seeing on the back of the crisis in the Middle East in terms of that business? Well, actually all your businesses, what's the effect on...
Well, the effect on our businesses is actually more of beneficiary than actually downside. Because if you look at urea, where we are producers, which is fertilizer, today fertilizer is in very high demand. Not only in high demand, in February before the Middle Eastern crisis, was selling for about $400. Today we are selling a ton of fertilizer for $850, and we are actually oversold. In plastics, polypropylene, it has moved from $900 in UK, today is about $3,000. Okay, and for us, if not because of the polypropylene we're producing today, all the plastic industry in Nigeria, which they are very huge, they are almost like number two or number three in terms of employment, they would have shut down because there's nowhere you can even get it. Our aviation, we're oversold till end of, you know, till middle of July. You know, and we're producing 20 million liters a day.
Where do you source your crude now?
We source about 56% from Nigeria, some from other, Angola. We buy quite from Angola, we buy from Libya, we buy from US. At a point we are doing almost about 7 to 8 cargoes of WTI from, you know, US. But we're getting more of Nigeria's crude now. So, you know, we have to buy now 21 cargoes every month. That's how big we are. And you know, we're more than doubling the refinery. You know, in the next 30 months we'll be at 1.4 million, which is huge.
What are the forces which have been trying to work against you in this project? Just you mentioned the kind of, you know, the kind of mafia.
Well, the people who are actually benefiting, because Nigeria was giving almost about $10 billion every year as subsidy. So there are shippers who are making tons of money. There are traders who are making tons of money buying the crude and sending us, you know, product. They use it. They said that, you know, it's a trade which they give you crude and then you supply them with products. There are also the local people because it was subsidized. So a lot of people, very few people are getting allocation. So they are making tons of billions of naira. So these are the people that are not agreeing for us to settle down because they believe that, no, we're coming here to displace them, which is, I mean, that's of course that's what we have done now.
Absolutely. And now you're going to replace more people because you are planning to do a project in Tanzania.
Tanzania, there are a couple of countries that they say, okay, look, with what has happened in the Middle East, we don't want to rely on the supply anymore from there. We need our own refinery. So Uganda, Tanzania, Kenya, and some of the other countries like, you know, I mean, Rwanda and co. When we build the refinery, the same size, 650, will be able to serve up to Ethiopia.
Are you going to build all these refineries?
Yeah, we're going to build.
