Aliko Dangote has been on his toes with business from the early stages of his life. With a net worth of $20.7 billion, making him Africa’s richest man, Dangote has successfully built an empire.
He is also the world’s richest black person, according to Forbes. The majority of the entrepreneur’s fortune comes from his 85.2 percent investment in Dangote Cement, the world’s largest cement producer in Sub-Saharan Africa.
Let’s look at 5 things Aliko Dangote learnt early in life.
1. Investing in what he knows
Dangote learnt from one of the earliest investment lessons in the book. He was introduced to the entrepreneurial mindset at a young age, having been born in 1957.
His grandfather, who became one of the wealthiest people in the area by selling goods, raised him in Kano State, Nigeria.
At 21, Dangote loaned $3,000 from his uncle and went out on his own after graduating from Egypt’s Al-Azhar University.
He used the loan to acquire rice, sugar, and cement at wholesale prices from other countries, then resell them at a substantial markup in the United States.
He knew how to run a business because of his grandfather, and he was able to make the venture a success right away.
The Dangote Group has grown into one of the largest trading enterprises in the country.
2. Picking companies that create value
Dangote’s business thrived for 20 years, but he saw an opportunity to pivot to meet a pressing need and continue to grow.
Nigeria was coming to the end of a 15-year military rule, and the incoming president, Olusegun Obasanjo, had committed to preserving domestic industry, setting the stage for Dangote Group.
The Dangote Group website states, “to provide local, value-added products and services that meet the ‘basic needs’ of the populace” in a country where imports form the vast majority of consumed commodities.
Dangote had a distinct competitive edge when his company shifted from importing and trading commodities to manufacturing flour, pasta, and sugar since he already had a strong distribution network.
3. The power of building a strong brand
Dangote has stated that “To thrive in business, you must first develop a brand and then never destroy it.” Dangote branded the products with his name, maybe to profit from his name recognition as a commodity trader.
The brand would be established on high-quality products at reasonable rates, which works just as well in Africa as it does anywhere else in the globe, and it is today one of the continent’s most recognisable brands.
4. Focusing on strong capital allocation
One thing Dangote is known for is his ability to successfully reinvest profits from his businesses.
He has established economies of scale that enable his company to sell things at a lower cost than its competitors.
Many CEOs try to achieve this, but only a small percentage succeed. Two names that come to mind are Warren Buffett and Jeff Bezos.
The Dangote Group purchased a cement company from the Nigerian government in 2000, and by 2003, Dangote was ready to expand the business by combining a $479 million loan with $319 million of his own money to commission Sub-Saharan Africa’s largest cement factory.
A recurring subject is the successful investments in Dangote firms. It’s also happened due to the Dangote Sugar’s many expansions, which has grown to become the world’s second-largest sugar refinery.
Since the late 1990s, the company’s distribution network has increased from 600 to over 1,500 trucks.
5. He embraces diversification
Dangote is known for his exploration of different industries. His conglomerate, Dangote Group, is unique in its capacity to advance in numerous areas, in addition to reinvesting in current operations.
The Dangote Group is expanding beyond cement, sugar, and flour with plans to explore real estate, telecommunications, steel, and oil and gas.
Dangote’s business and his net worth have exploded because of this approach. Today, the Dangote Group is a large conglomerate that generates billions in revenue annually.