Stating the case for investing in Nigeria

Tony Hadley, CEO, Dangote Cement

Contents

• The Dangote Group in Nigeria• Profile• Business sectors• Major Assets

• The Nigerian operating environment• Economy• Opportunities• Challenges

The Dangote Group in Nigeria

Group Profile• Mission Statement – Touching the lives of people by

providing their basic needs• Diversified business conglomerate focused on provision

of essential goods (food and shelter)• Began life as a trading business (1985) and made a

strategic decision in 1999 to transition to local production/manufacturing.

• Recognition of the opportunity to develop value added local production capacity

• Rapid growth into one of the largest conglomerates in Nigeria

Group business sectors

• Cement - Manufacturing / Importing, Packing and Distribution• Sugar - Farming & Refining, Packing and Distribution• Salt - Refining, Packaging and Distribution• Flour & Semolina - Milling, Packing and Distribution• Spaghetti, Macaroni & Noodles - Manufacturing and Distribution• Polysacks - Manufacturing• Logistics - Port Management• Logistics - Transportation of Raw material and Finished Goods• Property Development• Oil & Gas exploration• Telecoms – 3G licence

• Associated infrastructure

Major Assets (1)Obajana Cement Plant – Largest cement plant in Sub-Saharan Africa (5 Million tonnes of production capacity)

Major Assets (2)Dangote Sugar Refinery Plc (Apapa, Lagos) – 1.44 Million tonnes of annual refining capacity making it the largest in SSA.

Major Assets (3)Savannah Sugar in Numan has 32, 000 hectares of cultivated

land and currently produces 150,000 tonnes of raw sugar per annum. An upgrade is currently taking place to increase production to 600,000 tonnes per annum.

Major Assets (4)Dangote Flour Mills plc has five flour mills in Nigeria producing 4,500 Metric tonnes of flour every day

The Nigerian operating environment

Economy

• GDP (PPP) of US$293 Billion• Real GDP growth (2008) of 6.4%• Population (2008) – 143 Million• Oil and agriculture made up 69% of GDP in 2009

(37.3% and 31.7% respectively)• Non-oil sector growth outstripping real GDP

growth (agriculture grew by 8% in 2007)• Predicted growth of over 3.5% in 2009, despite

global financial crisis (IMF)

Opportunities

• Cited by Goldman Sachs as one of ‘next 11’ countries expected to follow the BRICs into the top 20 world economies

• Significant consumer market and growing middle class (143 Million population and growing)

• Large natural resource reserves• Reform agenda • High Return on Investment (ROI)

Challenges

• Infrastructure deficiency (energy, services and transportation)

• Financial Sector – high cost of capital and short-term mindset

• Lack of sufficient skilled local labour• Costly operating environment

A challenging environment, but one that rewards those committed to success

Conclusions• Strong ROI for company’s committed to

investment• Reform agenda creating a platform for enhanced

operating environment• Growth despite global financial crisis• Opportunities across a range of non-oil sectors• Importance of local content and knowledge• The Dangote model demonstrates that success is

achievable across a range of sectors