NIGERIA/FILE: Nigerian billionaire Aliko Dangote aims for a valuation of up to $40 billion for his cement company at its London listing in 2013

Record ID: 235683

  • Title: NIGERIA/FILE: Nigerian billionaire Aliko Dangote aims for a valuation of up to $40 billion for his cement company at its London listing in 2013
  • Date: 15th June 2012
  • Summary: OBAJANA, NIGERIA (FILE) (REUTERS) EXTERIORS OF OBAJANA CEMENT FACTORY
  • Embargoed: 30th June 2012 13:00
  • Keywords:
  • Location: Nigeria
  • Country: Nigeria
  • Topics: Business,International Relations,Economy,Politics
  • Reuters ID: LVA7K49PHWA39WIF60D4UW49XBX0
  • Story Text: Nigerian billionaire Aliko Dangote is targeting a market capitalisation of up to $40 billion for his cement company at its London listing next year, several times that of top global rival Lafarge.
    In an interview at his office in Lagos on Wednesday (June 13), Africa's richest man with a cement empire stretching from Senegal to South Africa also said Dangote Cement had raised its capacity target to 60 million tonnes by 2015, from a previous 50 million tonne target.
    Dangote plans a secondary listing in London later next year.
    "It depends on the market but I am sure it should be something like 35-40 billion dollars, so to speak, we are targeting something like that," he said.
    Dangote is ranked 76th on the Forbes list of the world's billionaires, and its fastest riser in 2011 thanks to the rapid expansion of his cement business, in which he has invested around $6.5 billion in the past few years.
    He commissioned an expansion of his Obajana cement plant in central Nigeria on Monday that raised its capacity to 10.25 million tonnes a year, making it one of the world's largest.
    "Our intention is actually to keep on expanding organically for now and when we get at the end of 2014 by that time we will be having quite a lot of additional liquidity and then we can now go in for acquisition but right now it's more or less to do with expanding facilities, building new ones, and also consolidating the business so that we will be able to face the challenges ahead of us," he said.
    A number of plants across 13 other countries in Africa are in various stages of being completed.
    The sheer scale and speed of the company's expansion across Africa has raised alarm bells amongst some analysts worried about cash burn, but Dangote said there was no issue here.
    "The business of cement that we are doing currently today, especially the areas where we are participating, it is a very very lucrative business, cash flow is very excellent, so the cement business does not really need to raise funds," he said.
    "If we manage our business properly you know, at the end of the day, by the time we are finished, say by beginning of 2015, we will be able to have 60 million tonnes without any debt. And that is the kind of target we are actually set up to achieve," he added.
    In light of this, the London listing has nothing to do with raising money for operations. It would all go to his privately held Dangote Industries to pay off its investors, including himself.
    "We are saying that yes today that we have a total of our group valued at about 15 billion dollars. But we expect that by 2015 we should have a group with a market cap of minimum something like 60 billion dollars," he said.
    Even though there are significant governance hurdles, and Dangote's plan to build a pan-African aggregates champion isn't without risks, the prospect of a FTSE 100-sized Nigerian company is worth celebrating.
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