THISDAYonline

Alhaji Aliko Dangote, the chairman of Dangote Group, is an industrial giant. That should be the understatement of the year. For a man who dominates the sugar domain, mans the cement market, rules the rice kingdom and sits atop the salt empire, it is in the Queen's interest to invent another word that would best describe this colossus called Aliko.

One interesting aspect of the Dangote success story is the way he started. As a primary school kid, just about eight years old, he began to exploit his trading instinct. He had no reason to do that. He was living with his maternal grandfather, Alhaji Sanusi Dantata, himself a very wealthy man. But Aliko had a dream.

"I can remember when I was in primary school, I would go and buy cartons of sweets and I would start selling them just to make money. I was so much interested in business. Even at that time, I was very used to buying and selling. It is in my mind all through. I did that on a part-time basis. I usually bought packets of sweets and gave some people to sell for me. I would join them whenever I closed from school. I would collect my profit and give them something out of it. And we continued like that," he recollects.

Didn't his guardian raise any eyebrow?

"It was not an open thing," he replies. "The family had many servants. So, some of them were selling things. I would say, 'Please, sell these for me' and he would sell and render accounts afterwards. That was what I was doing. It was not as if I established shops."

As Dangote clocks 47 today, he can look back again and smile. But don't expect him to invite everybody to Golden Gate or Ocean View Restaurant for a birthday bash. Far from it. He simply does not celebrate his birthday. Of course, many of his admirers will tell you that Aliko is a very simple person.

"I do not actually celebrate my birthday but what I do is to make sure that I pray to thank God for giving me another year and for giving me another opportunity to serve humanity. But really, personally, I do not mark my birthday. But once in a while, my friends give me a dinner, like a surprise package. I think I will celebrate at the age of 50, by the grace of God.

"It is part of my nature and I always tell people that this simplicity people ascribe to me, I took it from my grandfather. He was a very, very simple and whenever he was passing on the street, no one noticed him. During his time, he was very rich and his name also rang a bell. Even though at their time, they were not really doing the magnitude of business that is happening today."

Dangote started big business in 1978.

"That was the year when cement was very short in supply. People would now come and give me money to buy cement for them. It could be up to three or four months before the goods would arrive because it took time to bring them in. You know, at that time, Nigerians had so much money because of the oil boom and the Udoji award. Even the ports were not able to handle the kind of imports we had at that time.

"At that time too, it was really big business for me. I can remember the profit we were making after selling a truck of cement was about N1,000 to N1,500 and that was big money. A new Volkswagen beetle was about N900. That was a good money. If you look at it at that time, the profitability was quite high because cement was not available. The irony of it is that it was a business you do not need to borrow money. If you just started the business, people would come forward and pay you and wait. If you wanted, you could go ahead and pay for the cement; if you liked, you could trade with their money and turn it over," he reminisces.

In 1980, he went into another business. "When the import licence era started, my first importation was sugar. I remember that my first import was from a company called London and Overseas. I got import license for 5,000 metric times of sugar. From there, we started importing rice. That was under the Presidential Task Force on Rice. You know, licences were given in their name and you would be dealing as an agent on their behalf. Then we went into chemicals spare parts and aluminum sheets. Let me explain one thing a little bit. Some of the import licences were actually given to politicians, those who were not directly in business. So it made importation scarce. We now had to buy the licences from the politicians to be able to import. It continued like that and one wanted to grow in business, and we were very successful especially during this era. And when Buhari took over, import licensing also continued up till August 1985 when Babangida took over."

Aliko is a multi-billionaire, no doubt, considering his assets all over the country. He points to 1984 as the year he had his big breakthrough. That was when - please pardon my pun - God added sugar to his tea. Buhari locked up many politicians, many of whom were also into business, especially international trading. Isyaku Rabiu was a big player in the sugar business. He too was locked up.

"That reduced the number of us in the business. I remember that the politicians were locked up for over 18 months. In a situation where you are out of business for a while like that, especially when you do not have an established business, the moment you are out, the business will collapse. Then you have to start all over again. Before they could come back into business, some of us had taken over the market. I remember it was only about two of us that were importing virtually the whole sugar the country was using during the Babangida administration. We rose to the top. We have actually been controlling the sugar market from 1984 till date.

"So, from that time, we started growing and growing. But the main growth came when Babangida demolished import licensing. One could now go on importing without passing through government. That was how we started growing very fast. Also remember that there was a period of tightness occasioned by scarcity of foreign exchange. How did we overcome that period? We succeeded because we had so much cash. Then, we had more cash than ideas. Today, unlike then, we have more ideas than cash.

"What we did was that we went to banks to deposit money, without any interest. The banks too agreed on a certain allocation of foreign exchange to us. At that time, we used to export a lot of cocoa and cocoa butter. There was a lot of cash. That arrangement gave us a lot of edge against our competitors. We did it for years because people were used to our brand. Since people were used to seeing our product in the market, this helped in reducing some of our headaches."

There was some complacency, Dangote confesses. "Even in the area of marketing, it is just of recent that we said look, we have so much competition in the market, we should start marketing. But all that period of boom, there was no marketing. All we had was sheer good luck and hard work and, also, the goods selling themselves. People have come to identify with our products. Just like someone who enters a supermarket to buy milk and asks for Peak. That is the only brand he knows. We are very lucky because we are not loud or extravagant. Even now, whatever we make, we plough back into our business."

And now, the big one: Dangote has gone full-blast into manufacturing. Trading and manufacturing are a world apart. One is like casino, with a promise of instant cash, while the other is a long-term project. Even when Dangote was making waves as a trader, many people did not really respect him. The reasoning was simple: trading is ephemeral; manufacturing is the 'real thing'. So, why did he switch?

"We went into manufacturing for a number of reasons. We analysed the whole situation. That period I told you about, up till 1998, we actually had too much cash. It is because at the time you were to go and order, say one to three ships of rice... mind you, you are not the only one that is importing at that time... That means that if I bring in about three ships, it may take me three to four months to sell. That means that I will have a lot of my stock in the warehouse and that is not an effective way of running business.

"An effective way of running business is for you to see how many times you can turn over that money. The turnover matters. We now looked at the whole products in terms of sugar, rice, flour and other things that we were doing, we had a lot of money from the business. We also had a lot of the products in stock. We felt that we had reached the end of the road, in the sense that all that is left is for you to want to go and trade in everything, which is not going to be easy. So we said, first of all, we were not turning around the money we had properly. All the money we accumulated all these periods of trading, we had reached a stage whereby we couldn't go above that and there were a lot of wastages. If you look at capital and the cash position that we had, the income was not commensurate with that kind of money. And it was risky for us to go on with that.

"The perception that we had which is the problem a lot of Nigerians have is that manufacturing is first too much of headache and that there is no money in manufacturing. That is not true. Analysing what X company has done is not something to go about when you want to establish an industry. You see why these guys control our industries, I mean the foreigners. We have opened up so much. All other countries like Egypt, Kenya, Ghana and many other African countries have not opened up trading like Nigeria. Because in Nigeria today, you can see an Indian man that will come up here and open up trading and he will start competing with you. Whereas in India, you cannot just go there and start trading. They cannot give you a resident's permit simply because you want to trade.

"Going back to what we were saying, you see, these guys when they come here, what they do is over-invoicing in terms of raw material input. The main profit is generated abroad. He will simply say, Since your people have said that you need 60 per cent, I will go and take one Mr Aliyu as my stooge. I will bring him and tell you that he is a member of my board of directors. He will travel abroad for courses and vacation. So he will now have a sense of belonging. Once you transform him, you will now use him against other Nigerians by declaring less profit and also taking the money outside the country. That is what these foreigners do. All these people they put as directors are stooges. I do not want to mention names or companies. You can quote me anywhere. So when we went in and we said okay this area, is it a profitable area. We tried to analyse by seeing oil companies that will have or declare N30 billion. And very few companies can do that. And if you really go through their books, you will find out that their real profit is about N400 billion."

Despite discouragement here and there, including warnings from his foreign partners that manufacturing was not profitable, he decided to start small by going into salt. Dicon was the biggest in the market then. A bag was selling for N320.

"When we went into the market with our own product, we started selling at N240. This means we slashed the price. After our first year of production, what we made from salt was far much higher than what we were making from our two banks and also the trading that we were doing. That was how we now became so aggressive. At a time we were building eight factories and three apartment buildings. So we had 11 projects going at the same time.

"When we now looked at the whole thing, for the country to go forward, we have to industrialise. When you industrialise, all these products that we import are going to be made here. We are going to change the whole system. We will generate thousands of employment. Demand for foreign exchange will drop. In fact, we will begin massive exportation. The naira will gain value and our economy will be buoyant. Nigerian companies can even go to the stock excahnge to raise some money. Just look at what happened in the last two weeks. Standard Trust Bank went into the market, they did an IPO, in eight or nine days, their share price gained 30 percent."

He speaks warmly about his cement factory at Obajana, Kogi State. The only worry, it would seem, is the amount of money he has committed to generating power, something that an efficient National Electric Power Authority (NEPA) would have taken care of. "I had to lay gas pipeline across 97 kilometres from Ajaokuta to Obajana. This is an unnecessary cost, pure waste. What Nigerians waste on alternative power supply is more than the capital budget of the federal government," he says.

Soon, Dangote will set up a $250 million independent power plant that will generate 2000 megawatts. That is about 60% of what NEPA, Nigeria's mega-waste, has been generating even with the injection of over $1.5 billion in five years. That should be enough to generate 10,000 megawatts - about twice what Nigeria currently needs to achieve zero power failure - if only Nigeria had a competent government in place.