A Big Heart Will Take Nigeria Out Of The Woods – Dangote | Independent Newspapers Limited
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A Big Heart Will Take Nigeria Out Of The Woods – Dangote

Posted: Jun 29, 2016 at 1:51 pm   /   by   /   comments (1)


Alhaji Aliko Dangote, President of Dangote Industry and Africa’s richest man took eminent Nigerians on a tour of Dangote Refinery in Lekki Free Trade Zone, Lagos, at the weekend. He spoke to Bamidele Ogunwusi on his refinery and petrochemical projects as well as the economic challenges he had to face to bring the projects on board.  Excerpts:


After going on a tour of this facility, there is no doubt that this is a big project. When will the refinery begin operation?

As you can see, it is a very huge project. It will be ready by first quarter of 2019. We are putting 65 million cubic meters of sand. You may not appreciate the size of the plants until you have gone round, but this place is actually eight times the size of Victoria Island. That’s to give you the concept of the size of this place. That’s how big it is.

How cordial is the relationship with your host communities?

We have no issues with the host communities. Although, there were few issues because two communities claimed they were not adequately compensated but they are between the communities and the Lagos State Government. We have extreme good relations with our host communities.

Normally, why you create the free trade zones is like an industrial zone where you provide everything. So someone who is a foreigner does not need to go and be battling with the community here and there. For instance, we didn’t buy the land from the community; we bought the land from the government. Government claimed the land several years, paid compensation. We bought the land, which was swamp then, and it costs us $100million. The sand filling and reclaiming is costing us $420million. So it is half a billion dollars plus just to have the land. So it is not a question of maybe Lagos State gave us the land for free.

Kindly shed some light on allegation of forex allocation to Dangote Group?

The biggest problem started when the Governor of Central Bank was here. He admitted that this is the future of Nigeria.

Really, when you listen to the presentations, you will discover that it is all about economic diversification of Nigeria. The largest project anywhere in the world be it a fertilizer plant, be it the gas pipeline or the petrochemical and or the refinery. If you look at it, we are one and half times the Nigeria’s refineries in all capacity even if they are working at 100 per cent capacity. This is the largest single line refinery in the world.

The petrochemical we have is thirteen times the size of Eleme Petrochemical which was built by the government. If you also remember NAPCON, which used to be the largest company in Nigeria, and the only fertilizer producing plant in Nigeria; our project is ten times the size NAPCON. It is the largest fertilizer plant in Africa.

So because the CBN Governor said whatever you need, they now thought we collected forex. No, we did not collect the forex from CBN as being speculated. Let me also expatiate so that you can understand very well and I don’t get misquoted.

The loan for this place was taken by Dangote Industries Limited (DIL), which is the holding company because the Dangote Refinery is a new company and no one will lend money to brand new company. Dangote Industries Limited used its balance sheet to borrow the money and there is interest element that must be paid. This is because we took the loan since 2014. The loan interest from 2014 till date is $173 million and that’s what we have gotten from the CBN for this plant.

If you look at the fertilizer, out of $2 billion, it falls below $600 million. The land costs us $100 million, because legally we can’t pay Lagos Government in dollars, we converted to Naira through one of our banks, and we paid them the Naira equivalent at that time which was about N16.3 billion for the land. We brought in our own money to start the work. We have brought quite substantial of our money. I have seen online media saying that we got $161 million eleven weeks to when forex window opened.

In eleven weeks, operations of Dangote Flour Mills, Dangote Sugar, Dangote Cement, which we import Low Pour Fuel Oil and diesel of about 9000 trucks, we need about $100 million every single month. It is just that we mind our own business, we don’t complain. When the currency was moved from N200 to N283 to a dollar, we lost about N50 billion.

I’m a very proud Nigerian. When I say I’m a proud Nigerian, I mean it.  Like what I keep saying, I don’t have a block, not to talk of a house, outside Nigeria. Yes, I have many investments abroad, but I don’t have properties. Wherever I go, I stay in a hotel. Which means, every single money that we made from the companies, we plough back into the business. That is the reason why we are developing all these. You can see, check our history since we began industrialisation, we have never stopped but continue to invest.

Go and check, we have 29 million tons of cement. The only cement we sold last was only 13 million tons. So we are always ahead of the curve. Yes, so people will say we have a big heart, but that’s the only way to take the country out of the woods and invest heavily so that other problems will cease.

Today, this site is the largest industrial site anywhere in the world.

How does FG guarantees enabling environment for this projects of yours?

What we are trying to do is for the government to key in. We have keyed into government’s developmental issues in terms of developing the country. I keep telling people, since I came to Lagos, the first time I heard of economic diversification was in 1979. And I have been hearing about this diversification but we have never achieved it. That’s why we are suffering it today, if we have diversified the economy today, we won’t be shouting about oil has gone down and whatever.

Even if you go and blow the gas pipeline or oil pipelines, there will still be something that we will be getting money from. In a nutshell, these are the kind of projects you need to diversify the economy. The big ticket that we are looking for by bringing government here, is for the government to realize that something is happening here.

Right now, people are looking at the monetary side saying oil has gone down.

Yes, oil has gone down but we are looking at other opportunities like the fertilizers, petrochemicals, and others. The real basis of our economy is agriculture if you examine carefully.

How can you have more Arable land than China without fertilizers? If we finish our gas pipelines, it can generate 12000MW of power. That’s huge. It is more than what we are consuming in Nigeria and we can supply the rest to the rest of Africa.

 In your presentations sir, you said over $5billion would be realized from import substitution and another $7.5billion as savings from forex. Can you explain this sir?

Import substitution means that what you will realize form those goods you can produce here instead of importing them. $5.5billion is used to import aviation fuel, diesel, kerosene, poly ethane etc. When we export these products, we get forex and we will stop importing all these products.

This project is attacking the entire system in two folds. One fold is that no more imports, because if you look at it today, 40 per cent of foreign exchange goes into importation of refined petroleum products.

In less than three months, our cement factories imported almost $100million LPFO. So if you produce here, you don’t need to import. We cannot charge anybody in dollars. What we are selling in the industry will be paid in Naira. And you will create jobs. There are values we are creating. By importation, you export jobs and create poverty here.

The excess capacity above what Nigeria can consume is what will generate the $5billion.

For instance, when we export fertilizers and other products, we earn money. Today, people say maybe Dangote don’t want devaluation, not that we don’t want devaluation, we have not seen what people will export.

We have the capacity to export $700million worth of cement. Go and find out cost of our cement and compare with cost of cement in Ghana where we have terminals. For every bag I export to Ghana, I make N500 more per bag.

This is possible because of the differentials in the foreign exchange. That’s why a company like our cement company can afford to borrow money in dollars because we have dollar earnings. But if you have power generation plants, why do you have to go and borrow in dollars? You have to borrow from the local market and in local currency.

What is the total investment in this project sir?

They are couple of projects. Refinery Petrochemical plant is $12billion, the fertilizer plant is $2billion, the subsea and gas pipeline is about $3billion. Everything is about $17billion.

Is there any collaboration between you and the federal government regarding the existing refineries?

The licenses and permit were given by the federal government. The government has been very cooperative and very helpful. The Department of Petroleum Resources (DPR) has been supportive. They have been spending months in the design office while they are designing the refinery. So, they are working with us right from the beginning.

The government has been very supportive in making sure this complex comes to life.

Sir, you said we will have export from these refineries, which countries are you looking towards?

Quite a lot, we have one refinery in West Africa which is in Cote d’Ivoire. It is 75000 barrels per day capacity.

We have only three countries with functional refineries; they are South Africa, Egypt and Cote d’Ivoire. Nowhere else. So there is a market. Angola imports 92 per cent of their consumption. We don’t have any issues in seeping our products.

How soon do you think you can recoup your investment?

It depends on the price of oil. No matter what, it is a very viable investment and it is something that the country needs. You know people always forget. Have you asked where we are going to be in the next two years? Next three and half years which is liketomorrow, we will be about 207million in population.

We don’t have the logistics to import, discharge and distributing our products. And it is making people to tie down money. But with this one now, we will still have something to supply to the market.

We have the capacity to store 4 billion litres of products. This is about 110 ships.

What are your challenges so far?

The challenges are there. One of it was the devaluation. With this, it means, we have to work more and harder to be able to generate more Naira to get more dollar-denominated items. Equipment, customs duties, power and others will go up for sure. By and large, we are looking at the future of the country. Without challenges, you will not work harder. So we are always very happy to face challenges. However, we are also praying to God not to give us challenges that will over burden us.

What are the stages of these projects as at now, and how many jobs would it create?

In terms of direct job creation, it is not much when compared to indirect jobs. It is in Nigeria that you will find a filling station that has no fuel, especially, when you leave Lagos state. Most of the filling stations do not have products. If you don’t have products, you are putting at least 10 people out of job. By the time we begin to produce, you don’t need a tank farm; consistently you will be getting products which will make that station works. We have capacity to load 2680 trucks per day.

We have a single mooring point which permits you to load directly from the sea and take to Calabar, Port Harcourt and Lagos.

Comments (1)

  • Jun 29, 2016 at 2:11 pm ThomasSoludo

    Buy DANG0TE 3XCEMENT at PROMO PRICE 1150 naira
    For buyers above 100 bags and Rice 7500 for buyers
    above 20 bags for more info call the sales
    manager Mr. Bayo on 09028950795,
    Delivery can be made to all parts of Nigeria

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