http://online.wsj.com/news/articles/SB10001424127887323687604578469201586515408
LAGOS, Nigeria—Three years ago, Africa's
richest businessman planned to build his first factory outside his home
country of Nigeria. Today, the cement plant remains a half-constructed
shell on a Senegalese meadow as courts consider competing claims between
the industrialist and the descendants of a Muslim holy man.
Aliko Dangote's
cement company has flourished in Nigeria, helping to turn him
into the continent's most wealthy industrialist. But the stalled
Senegalese venture foreshadows what awaits Mr. Dangote and the rest of
Africa's crop of multinational entrepreneurs as they expand beyond their
home countries.
"It's not really been easy," the Dangote Group chief executive says in his office here, facing a wall-size map of Africa.
Like
Africa's other aspiring multinational businessmen, Mr. Dangote is
colliding with red tape and foreign competition in Africa's
small-but-fast-growing markets. Their outward marches will test whether
homegrown African businesses can compete against big foreign companies
on the continent.
For nearly two
decades, Mr. Dangote (pronounced DAHN go tay) thrived on Nigeria's
tilted playing field. The country's past three presidents, whom Mr.
Dangote counts as friends, restricted the flow of cement through the
nation's ports. That lifted prices, along with Dangote Group's earnings.
Nigerian cement sales drove Dangote's profit 24% higher last year to
$1.9 billion, the company says.
Mr.
Dangote wants to persuade other countries to tighten their ports, too,
hoping to push up import prices and steer Africa's economic growth
toward industry and away from consumption. It is a message he has taken
into the roughly 20 African countries he is targeting for investment,
aiming to build "the most profitable cement company ever," he says.
His
expansion plans highlight a pivotal moment for business on the
continent. A handful of African banks, retailers and cellphone companies
are busting out of their home countries to ply products and services
across the continent. South African telecom
MTN Group Ltd.
MTN.JO +0.43%
, Togo-based Ecobank Transnational Inc. and South African retailer
Massmart Holdings Ltd.
MSM.JO +0.20%
, a unit of
Wal-Mart Stores Inc.,
WMT -0.38%
lead the pack.
But industrial endeavors like Mr. Dangote's are still rare—and that is no surprise.
Kenyan
power-equipment manufacturer Transcentury Ltd. opened a factory next
door in Tanzania. But the operation has struggled to keep up with power
cables offloaded from ships that came from China. Kenya's Bidco Oil
Referies Ltd. built a cooking-oil plant in Tanzania—but that factory has
been undercut by Asian imports, too.
Mr.
Dangote has experienced similar setbacks. His textiles business had to
close shop when Chinese garment mills began large-scale shipments to
Nigeria. That worked out well for him; he turned to the cement industry
in the 1990s just as construction began to boom.
Elsewhere,
Africa's dictatorships were crumbling and democratic governments were
abandoning socialist plans for top-down industrial development. To curry
favor with foreign investors—and to appease poor voters clamoring for
inexpensive imports—many governments relaxed import restrictions and
unleashed a flood of goods from abroad.
But Africa's most populous—and oil-rich—country held firm to restrictions on international trade.
That
has left Nigeria's retail price for cement among the world's highest,
at $200 a metric ton, analysts say. Mr. Dangote says the environment has
allowed him to make investments that have created jobs and made him a
symbol of Nigerian aspiration.
Forbes pegs his net worth at $16 billion. A pop tune here, "Aliko Dangote Special," declares, "Cover of Forbes, he no be joke."
But
Mr. Dangote so far hasn't been able to leverage that star power to
persuade other African governments to ban, tax or otherwise limit cement
imports from overseas.
Many countries
have French-owned cement factories that are the legacy of colonial ties.
Yet several of those have closed or scaled back amid a recent flood of
inexpensive imports.
And restricting
imports as Mr. Dangote has urged risks angering China, an important
investor in Africa. China's trade with the continent hit $200 billion
last year, according to Beijing.
And then there is Senegal.
Mr.
Dangote has said his plant there would create 4,000 jobs. But
Senegalese courts have ruled that his factory encroaches on a sacred
forest owned by the grandchildren of
Cheikh Amadou Bamba,
whom millions of Senegalese consider a Muslim messiah. Local
belief holds that he once drank tea with the Prophet
Muhammad
and floated across the Atlantic Ocean on a prayer rug.
Mr.
Dangote ascribes the rulings to less-divine intervention. French
Presidents
François Hollande
and
Nicolas Sarkozy
each lobbied his Senegalese counterpart to protect a local cement
plant owned by France's Ciments Vicat, Mr. Dangote says. "The
Senegalese, they dance to the tune of the French."
Abdou Abdel Thiam,
a spokesman for Senegalese President
Macky Sall,
says the government didn't interfere in the litigation but also
rules out a Nigeria-style block on imports. "Senegal is a free country,"
Mr. Thiam says.
In his office, Mr.
Dangote predicts he soon will start selling cement in Senegal at just a
razor-thin profit. "We've taken this thing very personally," he says.
On his desk a plaque reads, "Nothing Is Impossible."
—Patrick McGroarty in Johannesburg contributed to this article.