The Cement Business Of Africa’s Richest Man Soaks In Double-Scandal

By  |  June 21, 2020

Africa’s richest man, Aliko Dangote, owns a huge cement-manufacturing business that is the largest of its kind in Sub-Saharan Africa. But that mammoth business tends to throw its weight about a little too much and at the moment, a double-scandal is unfolding.

Dangote Cement Plc, as the publicly-traded company has been known since 2010, is engaged in the manufacture, preparation, import, packaging, and distribution of cement and related products in Nigeria and has plants or import terminals in 9 other African countries.

However, in the past few days, Dangote Cement has been in the news more often than usual, and not because of its prowess in the cement business. 

On one hand, Dangote Cement is being vilified for allegedly firing up to 3,000 employees abruptly, and with no regard for due process. And on the other, the company is feuding with another cement manufacturer over a key asset, even though the other party claims Dangote Cement is just trying to bully and bulldoze their way into owning a piece of something that belongs to someone else.

The Dangote-BUA tussle

As a popular African saying goes, when two elephants do battle, it is the ground that suffers. And in this case, that saying might be apt in both the figurative and literal senses as two giants battle over an area of land.

Last week, Dangote Group and BUA Group — headed by Aliko Dangote and Abdulsamad Rabiu respectively (two immensely wealthy individuals who share a lot of history and background) — resumed their fierce battle over some disputed assets. This fight had begun in 2017.

Both parties are battling for the ownership of the mining sites in Obu, Okpella, in Etsako-East Local Government Area (LGA) of Edo State. Okpella is known for its natural sedimentary rock-based mineral resources, which include limestone, calcium, and granite, feldspar, talc, clay, marble, etc — important materials for cement production.

In 2017, it was reported Edo State Governor, Godwin Obaseki, led police to shut down the mining site, arrest BUA staff, and directed that both companies laying claim of ownership to the site should wait for the outcome of the court case on the dispute.

The community leaders had, at the time, alleged that the Federal Ministry of Mines and Solid Minerals, that had the present Governor of Ekiti State, Mr. Kayode Fayemi, as its then-minister, was siding with one of the parties in the dispute.

Indeed, a statement signed by the then-Permanent Secretary of the Ministry of Mines and Steel Development, Mohammed Abass, said BUA Group did not have a mining lease over the disputed site and was therefore engaged in illegal mining.

The statement further alleged that BUA Group had been using armed militia, soldiers, and policemen to intimidate and mine marble and limestone in mining sites allocated to the Dangote Group.

“The ministry stands by the ‘stop work’ order issued to the BUA Group and signed by the Permanent Secretary dated 17th of October 2017,” a part of the statement read.

Interestingly, this statement came after BUA Group’s Chairman, Rabiu, wrote a letter to President Muhammadu Buhari accusing Dangote Group of trying to force it to relinquish mining rights in a limestone field as part of a bid to monopolise the cement market while imploring President Buhari to intervene.

In truth, Dangote already commands around 70 percent of the market share in terms of cement output in Nigeria. Lafarge Africa, the local unit of Franco-Swiss cement maker, LafargeHolcim, ranks second. BUA Group is an emerging but competitive player.

Before the 2017 episode, BUA Group had written an open letter to the Nigerian government two years prior, criticizing government for providing favorable foreign exchange to Dangote Group for its Congo business, and thereby aiding anti-competitive practices.

BUA Group recently got a ‘favourable’ court ruling after the 2017 rumble but Dangote Group is appealing the decision.

Going by the court judgment delivered in its favour, BUA Group said a Federal High Court in Benin City had restrained Dangote Industries and the Nigerian Police Force (NPF) from interfering with its operations at the disputed mining sites in a judgment delivered recently.

BUA’s position has always been that it was operating peacefully on the now-disputed site for over five years before Dangote suddenly made an appearance to lay claim to the mining site after acquiring Ado Ibrahim International Company (AICO), which had been in dispute with Edo State Government about the site.

On its part, Dangote Group, in its statement, has denied the claim of ownership of the mining site by BUA Group. The group said it had appealed the high court judgment “and until the appellate court rules, BUA cannot lay claim or even operate on the mining site.”

However, reacting to the statement by Dangote Group, a statement by BUA Group alleged that Dangote misinterpreted facts, stating “no one is above the law, no matter how highly-placed.”

That’s where things stand currently as the latest episode of this tussle continues to unfold. And there’s reason to believe there will many more twists in this tale.

The Dangote Cement sack

Dangote Cement is currently getting some good press as several local dailies have, in the last 12 hours, reported that Dangote Group is sustaining 54,000 jobs in four countries. 

But the timing of the story might suggest an attempt to quieten the uproar that trailed a recent story uncovered by Sahara Reporters which claims Dangote Cement fired up to 3,000 workers abruptly, without any prior notice or regard for due process.

According to the story, a source within the company revealed that the company started the process of discarding 80 percent of its staff on June 17 without explanation.

“As I speak to you, more than 3,000 people are being sacked. You will be at your duty post and they will call you and give you a letter, nobody knew, no prior notice,” said one individual who was affected by the axing.

Further, the story claims a well-placed individual on the inside confirmed that the company continued to work in overtime mode during COVID-19-enforced lockdown, despite restrictions placed on all non-essential businesses/services in Nigeria. 

The story also claims Dangote Cement got a free pass to continue operation despite not being an essential service due to the association of Aliko Dangote with President Muhammadu Buhari. In various circles, many hold the opinion that Dangote gets undue favours from the powers that be.

“At the beginning of the year, they did an appraisal, it was supposed to be for a promotion and then the pandemic struck,” said the source.

“When the pandemic struck, people were thinking that is when he will sack people but nothing like that happened. As a matter of fact, the people that were on compulsory leave because of the pandemic were ordered back after just five days.”

The source added, “Everyone was recalled back to work despite the lockdown and at that time they were pushing out trucks of cement, around 500 to 600 every day.

“People were working overtime. Because it is owned by Dangote, his trucks were exempted from COVID-19 restrictions, so they forced people to work overtime like 12 hours every day, morning and night. The country was beginning to reopen little by little and then the next thing was sack,” he said.

In a letter of termination signed by Adeniyi Azeez, Head of Human Resources and Administration, the fired staff were informed that the process of the payment will be communicated with no specific date indicated.

Featured Image Courtesy: NigerianReporter

Most Read

From Bootstraps To Breakthroughs: Unravelling South Africa’s Startup Secrets

The startup ecosystem in South Africa is a buoyant and dynamic industry propelled

Moniepoint Is Stepping Up Its Global Ambitions As UK Plans Take Shape

Moniepoint Inc., the parent company of one of the largest business payments and

Tracing The Rapid Rise Of E-Mobility in Kenya

The global automotive industry has shifted significantly towards electric vehicles (EVs) in recent