Dangote Industries to consolidate three food companies into one to strengthen market position
NIGERIA – Dangote Industries Limited, the holding company for a raft of firms majority-owned by Africa’s wealthiest man Aliko Dangote, has planned a merger of NASCON Allied Industries Plc, the salt-making arm with two other food companies in the group.
Following in the footsteps of its rival, BUA Group, which successfully consolidated its food businesses into BUA Foods, Dangote Industries Limited aims to strengthen its market position and capture a larger share of the growing African food market.
The bold move will consolidate NASCON with Dangote Sugar, the owners of sub-Saharan Africa’s largest sugar refinery, and Dangote Rice, the group’s rice business, creating a single juggernaut in Africa’s largest economy.
While NASCON and Dangote Sugar are already listed on the Lagos Stock Exchange, Dangote Rice is not yet quoted. The two had total assets estimated at N558.9 billion and N59.2 billion as of the end of March.
Dangote Sugar and NASCON opened trade respectively on Thursday at a market capitalization of N329.8 billion and N70.2 billion.
By creating a unified entity, the conglomerate aims to revolutionize the food industry, cater to diverse consumer preferences, and drive economic development across the continent.
The merger is also expected to generate significant attention from investors and potentially impact the market capitalizations of the involved companies.
Dangote Sugar Refinery Plc recently hit a revenue milestone of 400 billion naira (US$875 million) in the full year 2022, a 48% growth compared to 276 billion naira (US$599 million) in the previous year.
Similarly, NASCON witnessed a 325.28 percent increase in profit, from N386.37 million ($498,600) in Q1 2022 to N1.64 billion (52.11 million).
In May, the President of the Dangote Group, Aliko Dangote urged African countries to dismantle all economic barriers hindering free trade among nations on the continent, to achieve sustainable growth and development across the continent.
He expressed the commitment of his Pan-African conglomerate, Dangote Industries Limited to solving some of the economic challenges faced by the African continent and her people.
Dangote stated that the organization has committed over 20 billion dollars to investments in several key sectors of the African economy to turn around the economic fortunes of the continent for sustained growth through free trade and economic integration.
“Our massive investments of over 20 billion dollars across key industries, including Energy, Agriculture, and Infrastructure are all set to empower farmers, foster backward integration, create thousands of jobs, eliminate our dependence on imported products, and improve our nation’s foreign exchange earnings significantly,” he said.
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