I BORROWED THE MONEY I USED TO START MY BUSINESS – ALIKO DANGOTE SHARES THE STORY OF HOW HE STARTED
HOW ALIKO DANGOTE STARTED
Call him a business mogul or a business magnate and you will not be making any mistake. I am talking about Alhaji Aliko Dangote, the man who represents the very image of African business. It is an open secret that the Dangote Group, is a diversified conglomerate with interests across a range of sectors in Africa, and has over 18 subsidiary companies. These covers interests in cement, sugar, flour, salt, pasta, beverages and real estate. It also includes new projects in development in oil and natural gas, telecommunications, fertilizer and steel. But it is not many people that know how Dangote started just like every other businessman. The story of how Aliko Dangote started is such an inspiring read.
Not many people know that the Dangote Group actually started as a small trading firm in the year 1977. Similarly, we know that the founder, Aliko Dangote is not just a billionaire but the richest man in Africa. However, do you know it took him 30 years of consistent effort and hard work to make his first billion?
If you have ever asked the question of HOW DANGOTE STARTED, this post is for you. This is meant to tell you everything from his birth to where he is today. You will also extract lessons from his journey especially as an entrepreneur in Nigeria.
You may also want to read about HOW COSCHARIS STARTED
BORN WITH THE MIDAS TOUCH BUT NOT WITH ANY SPECIAL STATUS
When on the 10th of April 1957, a male child was born in Kano; little was heard or known of the child. Like Shakespeare wrote in one of his epic books-Julius Caesar, ‘when beggars die there are no comets seen but the heavens themselves blaze the death of Princes’. In some dynasties and royalties, when kings are born, they are celebrated. That was however not the case in Kano when Aliko Dangote was born.
Aliko Dangote was born into the family of Muhammad Dangote and Hajiya Mariya Sanusi Dantata.
Dangote, like other children, learnt to crawl, to walk and to run. He cried like others, but at school he was focused on whatever he does and did them very well. The billionaire had his primary and secondary education in Kano. After which he proceeded to Alazahar University, Cairo, Egypt to obtain a degree in Business Administration.
Aliko Dangote has grown to have a Midas touch in every business he ventures into. He started as a commodity trader and made success of it. He entered into sugar refining, and also made success of it. And when he set up cement manufacturing and indeed other manufacturing businesses he also made a tremendous success of everything.
SO HOW DID DANGOTE START? Early, Small, but full of Passion
The traces of entrepreneurship skill in Dangote started showing up as early as his primary school days. “I can remember when I was in primary school, I would go and buy cartons of sweets and I would start selling them to make money. I was so interested in business, even at that time,” he said of how he started off. And he kept that at every level of his career. Infact, he never missed any singular opportunity to do business.
On graduating from university he did not spare a thought for the more popular path of looking for a white collar job. He was not among those that started business because they could’t get a job. He was decided on business from day one. It is still on record he never applied for job one day in his life. He went straight to Kano after graduation. And with the little money he had he ventured into business full time in 1977 trading in commodities and also building supplies. He later moved to Lagos in June 1977 and continued the trading of cement and commodities. Motivated by tremendous success and increase in business activities, he incorporated two companies in 1981. These as well as others that later followed make up the conglomerate now known as The Dangote Group.
Always willing to find a way
Then in 1978, there was an armada that made it very difficult for one to get cement at the time, then Dangote decided to leave cement and focus on other products. It was in that year that he decided to get a loan of ₦500, 000.00 from his maternal uncle- Aminu Dantata. The loan agreement was that he will pay back whenever he was okay-maybe after three or four years. But then Dangote proved his ingenuity again when he paid back the loan in less than six months as he already made enough money that could sustain the business. One of his business strategies for succeeding in the commodity market was to develop a strong distribution network and make the delivery of his goods faster than that of his competitors. And he testified that it worked perfectly for him.
FROM IMPORTATION TO MANUFACTURING
After gaining a strong hold on the commodity market, Aliko Dangote ventured into manufacturing and production of the same commodities he was importing. It was in 1999, following the transition from military to civilian rule in Nigeria and after an inspirational visit to Brazil to study the emerging manufacturing sector, the Group made a strategic decision to transit from a trading based business into a full-fledged manufacturing operation. Nigeria is a country where imports constitute the vast majority of consumer goods. So he saw that a clear gap existed for a manufacturing operation that could meet the basic needs of a vast and fast growing population. Dangote immediately moved to fill it. And that is the hallmark of a visionary entrepreneur.
How it happened
The Group embarked on an ambitious construction programme. It initially focused on the construction of flour mills, a sugar refinery and a pasta factory. In 2000 it acquired the Benue Cement Company Plc from the government. And in 2003 it commissioned the Obajana Cement Plant; the largest cement manufacturing facility in Africa.
Dangote approached the Nigerian Ports Authority in July 2012. He came with the idea of leasing an abandoned piece of land at the Apapa Port, which was welcomed and approved. He later went to build facilities for his flour company there. The Dangote sugar refinery at Apapa port, Lagos is today the largest in Africa and in terms of size is the third largest worldwide. It has an annual capacity of over 700,000 tons of refined sugar. It also has another 100,000 ton-capacity sugar mill at Hadeji in Jigawa State.
Apart from these, Dangote Group owns salt factories and flour mills. The group is also a major importer of rice, fish, pasta and fertilizer. The company exports cotton, cashew nuts, cocoa, sesame seed and ginger to several countries. It also has major investments in real estate, banking, transport, textiles and oil and gas.
Have you read about HOW LINDA IKEJI BLOG STARTED?
The Group is now one of the largest manufacturing conglomerates in sub-Saharan Africa. And he is not done yet. He is pursuing further backward integration alongside an expansion programme in existing and new sectors.
In one of this billionaire’s numerous interviews with business correspondents across the continent, he stated that leaping from importation to manufacturing was his greatest business move.
NEVER AFRAID OF TAKING RISK
One of the things that marvels many including competitors is the fact that Dangote seemed to possess a knack for seeing opportunities beyond what others could see. Equally worthy of not is that he is never afraid of taking risk. For instance, in April 2013, he announced plans to invest $8 billion in building an oil refinery with capacity of about 650,000 barrels per day. This would be the largest single-train refinery in the world. And that refinery is seated at a massive 6,180 acres of land at the Lekki Free Zone, Lagos.
When completed that refinery will be Africa’s largest petroleum refinery. Of the amount, he revealed at the World Economic Forum on Africa held in Cape Town, South Africa, that he had raised $4.5 to build the refinery, securing loans from a consortium of banks. Some analysts believe that it is too much of a risk to take in the uncertain oil sector. But others said with that singular move, if all goes according to plan, Dangote stands a great chance of becoming one of the richest men in the world in the nearest future. But only Dangote seems to be very sure what he has seen and he is ready to commit a fortune to it.
Or would you consider how in the late nineties, he approached the Central Bank of Nigeria with a proposal that it would be cheaper for the bank to allow his transport company manage their fleet of staff buses which when approved he managed to perfection.
THE DISCIPLINE OF A BILLIONAIRE
Dangote has overseen a multi-billion dollar business empire for decades now. But he has not forsaken the discipline and lifestyle especially in time management that brought him so much fortune. He still works round the clock. “I am someone who doesn’t switch off my phone. My phone is on 24 hours.
The demand of my time is really extremely high; especially in Nigeria where you have a lot of ceremonies to attend, including unnecessary ones,” Dangote said at a lecture at the Lagos Business School. When attending business meetings or conferences in other countries, he said he cannot afford to waste time. He explains “sometimes I go all the way from here (Nigeria) to China, and spend only five hours in China and come back. That’s why I don’t take my private jet to China most of the times. The reason is that the pilots need hours to rest. They need about nine hours of rest and, I don’t have that. So I have to fly Emirates most times.”
GIVING BACK TO THE SOCIETY
As we share how Dangote started, it is important to also mention what he has done for the society. Apart from his business acumen, he is also a philanthropist. He has collaborated with the foundation of American billionaire, Bill Gates Foundation to invest in the provision of health, especially the eradication of polio in Africa and other parts of the world where the disease is still prevalent. To underscore his belief in giving back to the society, Aliko Dangote, through his Dangote Foundation, has over the years committed a lot of his resources into philanthropic activities.
Dangote Foundation which was set up in 1994 is the Corporate Social Responsibility arm of Dangote Group. The Foundation intervenes in the areas of health, education and empowerment. The Foundation is also involved in providing humanitarian aid to victims of natural disasters. It has contributed over 200 million dollars in charitable funds to several causes in Nigeria and Africa over the past 8 years alone.
Dangote Business School
In 2018 he also built and donated a business school to Bayero University Kano. This will help promote high level business management and entrepreneurship knowledge guided by global best practices. Today, that school produces world class MBA students contributing in different sectors of the nation’s economy. Report has it that the project cost about 1.2 billion naira and is affiliated with the prestigious Harvard Business School.
Dangote recently announced plans to endow the Foundation with additional ₦200 billion. This is to enable them expand their scope of intervention and reach more people . He said the endowment would come from personal contributions as well as shares of his publicly quoted companies. And it will be transferred to the Foundation for onward disbursement to beneficiaries. He adds that this will ensure that the Foundation has secure and steady funding to carry out its mission as we significantly scale up our work.
Some Other Corporate Social Responsibility Interventions
- $500,000 to boost UNICEF’s fight against measles in 2013.
- $6.4m towards building worldclass International Cancer Centre Abuja (ICCA) in 2009
- Donation of two dialysis machines to Lagos General Hospital in 2010
- $ 2.6m to flood victims & women in Kogi: President/Chief Executive, Dangote Group, Aliko Dangote, on October 5, 2012.
- Donated 2 billion naira towards COVID 19 fight in 2020. And many others
BOI Backing and support
When Bank of Industry (BOI) saw what the foundation was doing they decided to partner to boost job creation: They signed the partnership deal in 2011. The expectation is to create direct employment for one million Nigerians over the next few years. The partners announced the funds release of $32 million ($16 million from each party) in the first batch, which is expected to grow up to $128 million eventually.
The Dangote component of the fund attracts zero interest, while that of BOI is 5 per cent. This is expected to impact directly on up to 13,000 registered groups in the entire country. Each, with an average of 20 entrepreneurs, thus impacting the lives of up to 260,000 micro-entrepreneurs, through job creation, spreading across all six geopolitical zones in Nigeria. The project is the first of its kind in the country.
WHERE ARE THEY NOW?
Dangote Group which started as a small trading firm in 1977. Today, through hard work and tenacity grown to a multi-trillion naira conglomerate with many of its operations across 16 different countries. The Dangote Group has also moved from being a trading company to being the largest industrial group in Nigeria and the group includes: Dangote Sugar Refinery, Dangote Cement and Dangote Flour just to mention but a few.
Dangote Refinery as at June 2021 has eclipsed 90% completion rate and Dangote reviewed that it should be completed in December 2021 or first quarter of 2022 and the project is set to cost about 19 billion dollars in total.
The Dangote Group has nationwide direct staff strength of over 30,000 as at 2017. On completion of ongoing projects this figure may likely hit 50,000. Dangote Group remains the largest industrial conglomerate in the whole of West Africa. Dangote is also exploring the telecommunications sector. He has started building 14,000 kilometers of fiber optic cables to supply the whole of Nigeria.
Aliko Dangote has in the process of accomplishing all these, become the richest man in Nigeria. He is also the richest man in Africa. And is equally the richest black man on planet earth. As at September 2021 he was worth an estimated $11.5 billion and ranking the 191 richest man in the world
Also read HOW INTERSWITCH STARTED
ADVICE TO UPCOMING ENTREPRENEURS
I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.
The next small business success secret I would recommend is business connections or network. You can build your connections and strengthen your network in the business world. This you can do by increasing your corporate social responsibility in any little way you can. The next way to achieving this is by attending seminars, workshops and other business meetings. To survive in business, you must strengthen your business connections and network.
I think this is the most importantl – you have to pray for a big break. Big breaks are very vital to entrepreneurial survival. In fact, I can hardly point to any successful entrepreneur that wasn’t thrust upwards by a big breakthrough.
- Bill Gates had his big break when he negotiated and signed a deal with IBM.
- Aliko Dangote had his big break when he secured a license to import cement.
- Oprah Winfrey had hers when she started Harpo Studios Productions and acquired the full rights to her shows; “The Oprah Winfrey Show.”
- Li Ka Shing had his during a riot period and he began buying property at rock bottom prices.
- Larry Ellison had his when he secured a deal to build database software for the CIA. The list goes on and on
Dangote also believes that one of the main prerequisites to building a successful business and ultimately becoming rich is developing a firm belief in your country. Dangote is a firm believer in his country Nigeria. He believes opportunities abound everywhere but it just takes a smart eye to see them. He encourages every young Nigerian to seek opportunities in this country instead of taking the huge risk of traveling abroad aimlessly to end up becoming a slave.
The story of how Dangote started has inspired me as a person and I hope you are too. It took him 30 years to get to this height, let me ask you. For how long have you been building that you are about giving up already? Be tenacious, keep working, pray for your own big break and one day the world will also tell your story.
What have you learnt from the story of HOW DANGOTE STARTED? Share with us.
This blog post on How Dangote Started was culled from the book HOW THEY STARTED by Kachi Ogbonna