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Dangote’s Six Business Strategies for Every Aspiring Entrepreneur

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  • Dangote’s Six Business Strategies for Every Aspiring Entrepreneur

In 2011, I told a group of friends that at this rate, Dangote and his Dangote Group, will strategically control and earn most of Nigeria’s consumer spending. That was before Dangote refinery, rice farming and a series of unique business moves were made. In 2018, seven years later, Dangote Group announced that its investments in various sectors of the country now worth more than 10 percent of the Nigerian economy.

To put it in perspective, Nigeria’s Gross Domestic Product was $404 billion in 2016, according to the World Bank. That evaluation put Dangote’s investments at over $40 billion. More than his current net worth of $11.1 billion.

However, our focus here is Dangote’s strategies and implementations. Below are six of those strategies.

Take small but bold steps: Dangote Started as a commodity trader with zero manufacturing knowledge. However, he learned on the job and grew from a new entrant position to a power trader, still not enough to compete effectively. Dangote jumped into the manufacturing sector to take charge of the whole process in order to monitor quality and control costs.

“To achieve a big breakthrough, I had to start manufacturing the same commodities I was trading,” said Aliko Dangote.

Dangote’s backward integration strategy didn’t just allowed him to cut costs but also helped build Dangote BRAND through job creation and strong support for local production, which he subsequently used to advertise his products, societal marketing concept.

Be the first: Dangote started sugar production in Nigeria and became the first person to build a crude oil refinery. And whenever he is not the first like in the cement industry, he revolutionalized the industry through efficient value chain process that allows him to introduce competitive price while focusing on marginal gains.

“Make the best quality goods possible at the lowest price possible, while paying the highest wage possible. ” Henry Ford.

Be strategical: After paying taxes for years — with little to nothing to show for it in terms of infrastructure. Dangote approached the government for an agreement to use his taxes to build roads under his new company, Dangote Construction Company. Not only will Dangote build roads to enhance his businesses and communities in which he operates. He will make profits from his own tax/construction company, just by thinking outside the box.

If it is not working move on: Too many people hold on to an idea for far too long, forgetting the idea is a means to an end not the end in itself. Dangote sells his noodle plants to rival De United Foods Industries (Indomie) for $12 million after several efforts to perfect its product quality and gain reasonable market share from Indomie, that was controlling 70% as at the time, failed. He knows he is not going to win and if anything at all it will take years.

Take calculated risks: In an economy with numerous business challenges but unmet needs, Dangote won’t stop taking risks despite experts saying otherwise. He acquired a struggling state-owned cement plant in 2000 and built one of the world’s largest cement plants, Obajana. He understands he is not going to make money or meaningfully impact the lives of his people without solving key challenges. Most entrepreneurs won’t even risk 20 percent of their net worth on a single project, however, Dangote took on a complex project, oil refinery, requiring more than his entire net worth of $11.1 billion. The US$14 billion refinery project with capacity to produce 650,000 barrels a day will turn Nigeria from importer of petroleum products to net exporter by 2020.

Be the difference: Before Dangote, there were great industrialists, however, apart from late Moshood Abiola, because of his political career, Dangote is now the face of African entrepreneur because of his unique approach to business and ability to take on complex projects like the refinery. He is the difference.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

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NAHCO Recalls Suspended GMD/CEO, Mrs Adetokunbo A. Fagbemi

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NAHCO Recalls Suspended GMD/CEO, Mrs Adetokunbo A. Fagbemi | investorsking.com

Mrs. Adetokunbo A. Fagbemi Resumes Work With NAHCO

The Board of Directors of Nigerian Aviation Handling Company Plc (NAHCO) has recalled Mrs. Adetokunbo A. Fagbemi, the Group Managing Director and Chief Executive Officer, who was suspended over Management’s failure to diligently secure the delivery of a purchased equipment from vendor within the contracted period and Management’s inability to provide satisfactory/acceptable reason for the unreasonable long delay.

Mrs. Fagbemi was suspended by the Board at a meeting held on 27th of January 2021 in line with the Board’s earlier decision that if a certified bill of lading for the equipment was not received by 2nd February 2021, the GMD/CEO shall proceed on suspension with half pay until receipt of acceptable evidence of equipment shipment from the manufacturer.

Since Mrs. Fagbemi commenced her suspension on February 3rd, 2021, Mr. Olumuyiwa A. Olumekun, the Group Executive Director, Corporate Services, has been acting as the GMD/CEO, according to a statement put out by the company.

It said “the Board is however pleased to inform the investing public and the Exchange that on, Tuesday, February 24, 2021, a satisfactory evidence of departure and arrival dates of the equipment has been received by the board from the equipment manufacturer.

“Consequently, the Board at its emergency meeting today, February 24, 2021, has recalled the Group Managing Director/Chief Executive Officer, Mrs. Adetokunbo A. Fagbemi from the suspension and she has resumed work.”

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Businesses Groan as Price of Diesel Rises to N250 Per Litre

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Petrol Importation

Businesses Groan as Price of Diesel Rises to N250 Per Litre

Businesses have started feeling the negative impact of the rising price of Automotive Gas Oil, known as diesel.

A single litre now goes for N250 in some parts of Lagos, with businesses taking a beating on the back of rising energy costs.

Our correspondent observed that some filling stations in Lagos had increased the price of the product to N250 per litre, while many others sold it at between N220-N245.

Northwest Petroleum along the Oshodi-Apapa road increased the pump price of diesel to N250 per litre; AP (Ardova Plc), along Airport road, Ikeja, N248; and Oando, along Acme Road, N240.

The National Bureau of Statistics, in its AGO price report on Tuesday, said the average price paid by consumers for diesel increased by 0.22 per cent to N224.86 per litre in January 2021 from to N224.37 in December 2020.

It said states with the highest average price of diesel were Adamawa (N268.33), Zamfara (N262.78) and Kebbi (N257.50).

“States with the lowest average price of diesel were Osun (N194.60), Anambra (N195.83) and Enugu (N198.24),” the NBS added.

Crude oil price accounts for a large chunk of the final cost of petroleum products, and the deregulation of the downstream oil sector by the Federal Government means that the pump prices of the products will reflect changes in the international oil market.

The international oil benchmark, Brent crude, has risen by more than 25 per cent this year from the $51.22 per barrel at which it closed last year. It rose to $65.25 per barrel as of 6:30pm Nigerian time on Tuesday.

Diesel is mostly used by businesses to power their generators amid a lack of reliable power supply from the national grid.

The President, Association of Small Business Owners of Nigeria, Mr Femi Egbesola, lamented that the recent increase in the price of diesel was taking a heavy toll on businesses, especially Small and Medium Enterprises.

“The cost of diesel and raw material is giving us a nightmare. The price of diesel has been skyrocketing in a way that creates fear in particularly manufacturers,” he told our correspondent on Tuesday.

According to him, it is difficult for businesses to factor all the increase in diesel price in their final product prices.

Egbesola said, “That is why a lot of companies are downsizing and are making sure that they only produce products that they are so sure will sell in the market.

“Many companies have reduced their product lines significantly just to be able to cope. And that is not good for us because by the time this goes on, unemployment will increase. I believe government should be able to do something about this.”

He said although the downstream petroleum sector had been deregulated, there should be checks and balances.

Egbesola said many small businesses’ savings had been eroded already because ‘we keep spending our savings to make sure we don’t close shop’.

He said, “If things continue this way, there is no way we are not going to close shop. We are still struggling with the recent increase in electricity tariff.

“Many small businesses still depend so much on diesel generators because there is no alternative power supply. It is only the big players that have the facilities to use gas. And we cannot use solar installation because it is very expensive.”

Nigeria, Africa’s largest oil producer, relies largely on importation for petrol and other refined products as its refineries have remained in a state of disrepair for many years.

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United Capital Appoints Latunji Head, Marketing/Corporate Communications

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United-capital

United Capital Appoints Latunji Head, Marketing/Corporate Communications

United Capital Plc has been appointed, Tolu Latunji as its Head, Marketing & Corporate Communications.

In the new role, he is expected to drive a strategic communications, marketing and brand management programme for the investment banking group.

Latunji is a communication and marketing expert with 12 years’ experience in products development, marketing, brand & franchise building, effective management and communication of strategic objectives whilst ensuring adequate visibility for both organisation and product/service offerings through product, content and brand initiatives.

“With a 360 degree knowledge of communications and marketing, which includes but not limited to – brand management and initiatives, corporate affairs, internal and external affairs, product and brand marketing, event management and experiential marketing, cluster/segment marketing, Tolu has served at various capacities on government constituted sub-committees on financial inclusion,” a statement explained.

Prior to joining United Capital Plc, he was the Managing Partner of Ten & Square Media Co., a bespoke creative ideation and brand/crisis management firm, based in Lagos, Dakar and London.

Latunji was recently the Strategic Communications lead at FMDQ Securities Exchange, Nigeria’s first integrated financial market infrastructure (FMI), where he had the responsibility of effectively positioning the group, together with its subsidiaries, as the most sophisticated and technologically driven securities exchange in Africa.

Prior to that, he worked in Guaranty Trust Bank for nine years with roles in brand management & monitoring, events and experiential marketing, products and content marketing and user experience.

He led the marketing team to the successful development and launch of various retail, SME and corporate products. He was also instrumental in curating and developing the bank’s social footprints. Outside the corporate environment, Tolu engages in various humanitarian activities with food banks and empowerment programmes. He holds a B.Sc. Economics from University of Lagos.

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