Dangote is not bluffing

. . . He is made of cement, not clay

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Aliko Dangote

Aliko Dangote

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IF there is anything that is strikingly novel about Mr Aliko Dangote (pictured), it’s his deportment – he rarely smiles and when he does, it is almost rehearsed.

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Equally, anything that he does seem to be measured and choreographed.

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Although he is economic with words, everything he says is well packaged and matter-of-factly.

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His sophistication, it seems, is in his simplicity.

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For a man whose fortune Forbes values at more than US$17 billion and who stands toe-to-toe with some of the world’s well-known investors such as Lakshmi Mittal, the owner of global steel giant Arcelor Mittal (valued at US$16,7 million last year) and Rupert Murdoch, the British media tycoon whose empire was valued at US$13,5 billion in 2014, the 55-year-old businessman has proved his worth in the treacherous business world.

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As such, when he landed in Harare on August 31, 2015; he didn’t disappoint.

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But there is something that he said that escaped most pessimists.

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“We are not here looking to invest, we have already made up our mind to invest. So we are here and we will invest,” said the soft-spoken business magnate to local journalists.

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His visit totally worked up the Twitter mob who are always spoiling for online “panga duels” – as author Dambudzo Marechera would have called it – at every turn that something positive is said about Zimbabwe.

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They lynched anyone who spoke highly of the deal, they lynched the Nigerian businessman for daring to come to a land where they think is cursed and they also lynched themselves for having to witness such a development.

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The rantings by this clique of netizens (users of the Internet) continued throughout the week.

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But Mr Dangote’s trail of Pan African investments, particularly in the past 12 months, shows that his word is as valuable as money; you can actually take it to the bank.

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When it comes to business, his feet are not of clay, but of cement. This has been his flagship venture.

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Of late, he has shelled out more than US$2,7 billion in operations that are already up and running, with the most recent one being the US$400 million cement plant in Zambia that was opened on August 4, 2015.

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On April 1, 2015 Dangote Cement opened a US$310 plant in Senegal which was regarded as the single largest investment ever made by an African company.

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It has the capacity to produce 1,5 mtpa and it is expected to create 5 000 direct jobs.

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There is also the 2,5 million metric tonnes per annum (mmtpa) cement plant in Mugher Village, about 85 kilometres from Addis Ababa, the Ethiopian capital, which the businessman commissioned on June 5, 2015.

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The project, which is developed on a 134-hectare piece of land, is projected to create more than 7 000 jobs.

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About 2 000 people will be directly employed in the main plant operations, while there will also be 5 000 indirect jobs. Its fleet has more than 600 trucks.

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More recently, on August 27, 2015 he again commissioned a 1,5 mmtpa plant worth over US$140 million within the premises of the country’s largest sea port in Douala, Cameroon’s commercial capital.

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Dangote Cement’s 1,8 mmtpa plant in Aganang and another 1,5 mmtpa in Delmas, both in South Africa, are already operational.

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Market watchers regarded the deals as the single largest foreign direct investment in South Africa by an African.

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In addition, there are other investments in Ivory Coast, the Democratic Republic of Congo, Sierra Leone, and Liberia.

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He has really been a busy man.

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Clearly, Mr Dangote’s trailblazing exploits on the African continent are nothing short of jaw-dropping.

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But what has made his business a mean machine is his August 26, 2015 tie-up with China’s Sinoma International Engineering to build cement plants across Africa.

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So, in essence the business now combines the ant-like workmanship of the Chinese and the risk-taking appetite of the Nigerian business.

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It will be folly to think that this investment, which will also be the single largest foreign direct investment by an African company into the country, will fall through.

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The infrastructure gap in Africa, especially in Zimbabwe, provides limitless opportunities for investments in the country sector.

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Current efforts by Government to construct more than 300 000 housing units in line with Zim-Asset provide a ready market for cement.

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At 1,5mmtpa, the plant will be similar in size to the plants in Ethiopia, Senegal, Tanzania, Congo (Brazzaville) and Cameroon.

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So, by extension it has the potential to create more than 1000 direct jobs and a further 6 000 indirect jobs.

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But it will not be plain sailing for the traditional cement producers Larfarge Cement – now called Lafarge Holcim after the merger between French-based Lafarge and Switzerland-based Holcim – and South African-based Pretoria Portland Cement (PPC).

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Experiences in Zambia show that Dangote Industries Zambia Limited’s price tag on its cement products, which they argued is 30 percent more stronger than regular cement, was between 58,2 kwacha (US$6 using last week’s exchange rate) and 55,1 kwacha (US$5,6) per 50 kilogramme bag of cement, inclusive of Value Added Tax.

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The national average price was however 81,58 kwacha (US$8,6) for the same quantity, according to the Central Statistical Office.

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There were reports that Zambezi Portland in Ndola recently retrenched 47 employees, while an additional 63 were also going to be shed.

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Property developers and consumers however were naturally elated. The same benefits can accrue for local property developers and consumers.

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In Zimbabwe, cement is sold for more than US$10.

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Encouragingly, with the current efforts that have been taken by Government, there is every indication that the deal will sail through.

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All that is left is for Government to redouble current efforts to cultivate a conducive investment environment for investments that are already underway.