With $20b fortune, Dangote becomes 25th world richest

Dangote

With the share price of his flagship Dangote Cement Plc skyrocketing to N191 per share by the close of trading last Friday on the Nigerian Stock Exchange (NSE), Africa’s richest man Aliko Dangote saw his personal networth correspondingly inch up to $20 billion, making him the first African to hit the $20 billion mark.The business mogul  has broken into the rank of the top 25 richest men in the world.

With a current market capitalisation of $20.5 billion, Dangote Cement has also become the first Nigerian company to achieve a market capitalisation of over $20 billion.

Forbes, the world’s renowned business/financial news magazine, has said that Dangote, the President/Chief Executive of the pan-African conglomerate, the Dangote Group, has become the first African entrepreneur to lay claim to a $20 billion fortune as the stock value of the flagship of his holding, Dangote Cement, leaped just about three-fourths since March when Forbes last released its annual ranking of the world’s richest people.

With a current market cap of $20.5 billion, Dangote Cement becomes the first Nigerian company to achieve a market capitalisation of over $20 billion.

Forbes reported that Dangote’s 93 per cent stake in the cement company is now worth $19.5 billion.

Added to this are his controlling stakes in other publicly-listed companies, such as Dangote Sugar and National Salt Company of Nigeria and his significant shareholdings in other blue-chips, such as 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, Dangote is now worth more than $20 billion.

Dangote is 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.

Dangote Cement has recorded an unprecedented surge in its share price, largely due to market response to the company’s impressive results in the first quarter of this year.

The cement manufacturer’s unaudited results for the three months ending March 31 had 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.

Carl Franklin, Dangote Cement’s Head of Investor Relations in the United Kingdom, explained the company’s share boost, in an email response to Forbes 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.

“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.”

Forbes reasoned that other companies might eventually achieve this, but it’s going to take a bit of time. Dangote Cement 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 Nigerian Breweries, West Africa’s largest manufacturer of alcoholic and non-alcoholic beverages. 

The company has a market cap of $8.5 billion.

Dangote made its debuted on the Forbes billionaires list in 2008, with a fortune pegged at $3.3 billion. His fortune dropped to $2.5 billion in 2009 and plunged further to $2.1 billion in 2010. It 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, Dangote’s fortune has jumped another 30%.

Dangote started building his fortune over three decades ago after taking a loan from Sanusi Dantata and started trading in commodities like flour, sugar and cement.

He became a billionaire after delving into 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 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 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.