Chairman of Dangote Industries, Aliko Dangote, has announced that his company will not venture into steel production as promised, urging other wealthy Nigerians to step into the sector instead.
Dangote explained that the company’s board decided against entering the sector to avoid being labelled a monopoly and to encourage other Nigerian investors to take the lead.
Dangote, Africa’s wealthiest individual spoke to journalists in Lagos on Saturday.
He called on wealthy Nigerians to repatriate their funds from overseas and invest in the country’s industrial development.
He said, “Actually our own board has decided that no we shouldn’t do this (steel production). If we do it, we’ll be called all sorts of names.
“So we don’t want to go into that. Let other Nigerians also go and do it because we are not the only Nigerians here.
“There are, maybe, some Nigerians with even more cash than us. They should bring that money from Dubai, from other parts of the world to come and invest in our own fatherland.”
Dangote emphasised the importance of value addition in his business operations, stating that his company focuses on transforming local raw materials into finished products, thereby supporting a cyclical economy within Nigeria.
He said Dangote Industries had a history of enhancing local industries, evident from their decision to exit flour milling due to the reliance on imported wheat.
This move was made to avoid creating jobs abroad and instead focus on sectors like sugar that are more aligned with their local value-addition strategy.
Dangote highlighted that their businesses in sugar and salt continue to thrive under this philosophy.
Reflecting on their market influence, Dangote addressed the perception of monopoly. He pointed out that when Dangote first entered the cement production industry, the only major player was Lafarge.
Despite significantly increasing local production capacity, the company faced accusations of monopolistic practices.
He said, “Our group vice president, (Olakunle) Alake, said that we are always the first mover.
“We always move first, then other people will follow. And we have never ever, whether consciously or unconsciously, stopped anybody from being the same business that we have been.
“You know, to the contrary, when you look at it, when we first came into cement production, it was actually only Lafarge that was operating here in Nigeria, which is, Ewekoro and then the one in Ashaka, in Gombe.
“Nobody ever called Lafarge a monopoly. But when we got in there, you know, people now start to say, ah, monopoly.
“This is really very disheartening when people keep talking about all this monopoly monopoly, monopoly.
“Monopoly is only when you stop people, you block them through legal means or whatever.
“No, it is a level playing field where whatever Dangote was given, other people were given. In fact, some of them maybe they even got more than us.”
Dangote defended his company’s role, stating that they have not blocked competitors but rather set a high standard for others to follow.
Regarding incentives, Dangote clarified that the company did not receive any from the federal or Lagos state governments for their refinery project.
He noted that they paid $100 million for the land in Lagos and emphasised the need to look at the complete picture rather than focusing on perceived advantages.
Dangote expressed disappointment over Nigeria’s long-standing petrol shortages, which have persisted for over five decades.
He reiterated the company’s commitment to addressing this issue, with the refinery expected to produce Premium Motor Spirit (PMS) by mid-August despite recent setbacks due to a fire incident.
Recently, Vice President of Dangote Industries Limited, Devakumar Edwin, accused international oil companies of hindering the refinery’s launch by selling crude oil at inflated prices in Nigeria and suggested that many imported fuel products were substandard.
Speaking at a session with Energy Editors during a one-day training program organised by the Dangote Group, Edwin detailed the challenges faced by their refinery.
“The IOCs are intentionally obstructing the refinery’s efforts to purchase local crude by inflating premium prices above market rates,” Edwin asserted.
He explained that these inflated prices forced the refinery to seek crude from distant sources like the United States, significantly driving up production costs.
“While the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is supportive and tries to allocate local crude for us, the IOCs are deliberately frustrating our efforts,” Edwin stated.
However, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) countered these claims saying that the quality of petroleum products from the Dangote Refinery was poor.
Chief Executive Officer of the NMDPRA, Farouk Ahmed, had said, “Dangote Refinery, as well as some modular refineries like Watersmith Refinery and Aradel Refinery, are producing between 650 and 1,200 PPM.
“Therefore, in terms of quality, their products are inferior to imported ones.”
A charge which Dangote later dismissed as baseless, unfounded and misleading.
“The false and misleading allegations made by some media outlets that the Dangote Refinery is producing substandard diesel, which is why it reduced the price by 37%, are baseless and mischievous,” Chiejina stated.
“Until late last year, diesel imports into Nigeria contained up to 7,000 parts per million (ppm) of sulfur, a practice that has persisted for many years.
“Our diesel is produced with significantly lower sulfur levels, making the quality-related allegations groundless. Our product is 80% superior to what is being imported into the country,” the company’s spokesperson, Anthony Chiejina, said.
