The Public Investment Corporation (PIC) this week invested $289.3-million in Nigeria’s Dangote Cement – owned by Aliko Dangote, Africa's first $2-billion man – to take a 1.5% stake and said the deal will also offer opportunities in Dangote’s sugar, flour, oil refinery and port operations, Fidelis Madavo, head of resources at Pretoria-based PIC, said by e-mail yesterday.
The fund has as much as $7-billion to invest on the continent and is targeting as many as 20 listed stocks across industries such as consumer, infrastructure, telecommunications and agribusiness, he said. The PIC began expanding in the continent when it invested $250-million in Togolese lender Ecobank Transnational in 2012.
“The transaction offers the PIC other investment opportunities in Dangote group portfolio companies,” Madavo said in the response to questions. The company is “Sub-Saharan Africa’s largest and most efficient cement producer.”
Dangote Cement, Africa’s biggest producer of the building material, plans to expand significantly throughout sub-Saharan Africa, Madavo said.
Production Capacity
The Lagos-based company, West Africa’s largest by market value, has production capacity of 19.3-million metric tons in Nigeria, with plans to increase that to 29-million metric tons by 2015. Operations will start in Cameroon, Zambia and South Africa in 2014, and the Democratic Republic of Congo in 2015, chief executive, Devakumar Edwin said on April 25.
Dangote Cement will probably list shares in London in the fourth quarter of 2014 or first three months of 2015, Dangote said in an interview last month in Cape Town, where he also said he’s negotiated $4.25-billion of loans to build a refinery in Nigeria, Africa’s biggest oil producer.
Dangote has an estimated wealth of $23.1-billion and is the world’s 25th richest person, according to the Bloomberg Billionaires’ Index. He controls Dangote Sugar Refinery and last year sold a majority state in Dangote Flour Mills to Tiger Brands, South Africa’s largest food company by market value.
Nigeria’s $269-billion economy, Africa’s largest outside South Africa, will gain 7.2% this year, from 6.3% in 2012, International Monetary Fund projections show. That compares with an estimated 5.6% growth rate for sub- Saharan Africa and 3.3% in South Africa.
Dangote Cement’s stock has advanced 64% this year to 210.01 naira [R13.12 at midday on Wednesday], compared with 43% rise of the Nigerian Stock Exchange All-Share Index, the world’s fourth-best performer. – Bloomberg