Africa’s Croesus Aliko Dangote inspired by Reliance; now seeks to rival Jamnagar refinery

A visit to Jamnagar may have inspired Alhaji Aliko Dangote to attempt his most audacious business decision of his career – a $20 billion oil refinery and petrochemical complex on 2500 hectares of swampland outside Lagos – the single largest of its kind in the world. But it was the business evolution of Tata Group that served as a model for the Nigerian billionaire, also the richest in the African continent, to fundamentally pivot his entrepreneurial journey to try and prove Nigeria can do more than barter and trade. It can also build and manufacture.

This has made him a folk hero at home, one who is turbo-charging Nigeria’s industrial renaissance while weaning it away from an oil addiction. But along the way, the Dangote cult has become equally contentious. For many, the avuncular persona, the outward humility and a pleasantly round face with close-cropped hair belies a ruthless monopolist who uses favourable policies, tax breaks, state subsidies to crush competition and make windfall financial gains while gouging the national exchequer and the public.

In less than a year of processing crude for the first time, Dangote, founder, president and CEO of Nigeria’s largest conglomerate, Dangote Group of Companies is already plotting to pull off an even more ambitious

second phase: A massive ramp up of his refining capacity to 1.4 million barrel a day (bpd) from the existing 650,000 bpd to rival Reliance Industries’ Jamnagar refinery, as the biggest in the world in throughput. And to help compete with the very facility that inspired him in the first place, he is seeking the help of several Indian companies — private, state run or even local arms of global giants — including Thermax, Engineers India Limited, Honeywell OUP, ThyssenKrupp India, among many others to facilitate project management, equipment supplies, manpower or process engineering and construction.

He has already committed to the local regulators that he will be supplying 1.5 billion litres of gasoline from this month taking it up to 1.7 billion litres, a near 42.5% jump in supplies in a quarter.

Along with the refinery, the petrochemical output will also see production more than doubling in the next 18-24 months. By 2028 Dangote wants to be the largest urea producer in the world with a 4x jump in production both in his country and neighbouring Ethiopia, home to his next big greenfield bet. That’s an incremental $4 billion capex, based on his maths.

Source: Economictimes.indiatimes