Dangote Industries Limited has continued to expand its business portfolio; delving into many other sectors hitherto outside its focus. This is not unexpected given the business model of the organisation which is geared towards being a world class enterprise that is passionate about the standard of living of the people and giving high returns to the stakeholders.
In achieving that mission, the group business emphasises self-sufficiency and job creation. Beyond the traditional businesses, the group has since made a foray into Oil and Gas currently building a multi-billion dollars 650,000 bpd refinery in Lagos, reputed to be the largest single train refinery anywhere in the world. The company has also invested in agriculture where it is engaged in dairy farming, rice farming, tomatoes etc.
And with this comes new challenges and risks inherent in new businesses. Technology continues to play a profound role in shaping the global risks landscape. Forward looking organisations are adopting strategies to adapt to the fast-changing business environment.
It is against this background that the Risk Management Unit of the Dangote group pulled together its officers from 14 countries Pan-African operations; the head office in Lagos as well as from the Group’s various business units; for a two-day retreat on the future of risk management with a view to fashioning out measures to adapt to the fast changing global business landscape.
Group head of Risk in the Company, who is also the Group executive director, President’s Office, Dr. Adenike Fajemirokun, set the tone for the event when she gave the participants a pep talk and urged them to brace up for the challenges ahead by opening their minds for new ideas on risk management.
She said despite the ever-increasing importance of risk management, many organisations don’t reap the inherent benefit. She stated that the fact that financial institutions by law are required to have risk management as a department headed by an Executive Director underscores the importance attached to it. She was however pleased that Dangote Group is according risk management its pride of place in the overall management of the company; though it is not under any legal obligation to do it. This gesture according to her, is a hallmark of an organisation whose management is ready to ascend to new heights in the face of challenges associated with big multinational companies.
The retreat therefore, Fajemirokun stated, “Provided a platform for a cross section of the risk management staff across different functions to assess achievements so far, challenges ahead, refresh skills and as well promote enhanced practice of working together; right environment for brainstorming on emerging risk, cross learning from each other and goal-oriented strategic thinking which would facilitate its effective and diligent implementation of Dangote Group risk strategy.
“This is more apt given that on a broader scale across the business units of the Group, the rapid changes and developments in the Risk Management function has been widened to include insurance, procurement, transport and recently added responsibility over President’s Office.”
She also listed some of key achievements recorded so far by the unit since the creation of the department. Of note according to her is the reduction in the legacy debt of about N6.9 billion in 2017 to N400.3 million in 2019 which was achieved through a combination of write-off, repayment workout and actual recoveries.
On the operational side, Fajemirokun disclosed to the excitement of the retreat participants that Dangote Industries Limited has been certified to ISO 22301-international Standard for Business Continuity Management System (BCM).
According to her, on insurance the company recorded a saving on insurance policies between 2015 and 2019, of 55 per cent on local naira and 30 per cent on foreign currency and 65 per cent on offshore with local and international Re-insurance brokers. In the same vein, the GED stated that N321 million was saved through procurement unit between January and October this year.
The atmosphere became more exciting when the Group president of Dangote Industries, Aliko Dangote sauntered into the retreat venue. As expected, Dangote gave an insight into what goes on in his mind as an investor.
He said: “The Risk department is one function that has always reported to me since inception, which clearly goes to show you the significance of this function and how central it is to our collective growth as a company.
“Considering the scale of our business, risks are what keep me up at night. The need for continued proactive risk management and hard work is overarching today, especially considering where we are as a business and where we are going. It is challenging enough being the largest conglomerate in West Africa with presence in about 14 African countries, and considering the necessary hard work required to sustain this dominance.
“However, in addition to these responsibilities is our ambitious $20 billion refinery Petrochemicals, Fertiliser and Gas treatment project in Ibeju-Lekki, including our ongoing expansion in Cement, and our massive investments in Agriculture (Rice production, Sugar backward integration, Tomato and Dairy production). These are clearly exciting times, and more than ever before we get the opportunity to participate in the defining next-level moments of the Group.
“I encourage you all to pay attention to all the critical points and areas of discourse considered at this Retreat as I am confident that our Group Executive Director, has put together a world-class learning experience for you all to come up speed with what’s going on and what is expected of us as we move the organisation forward.”
After his brief remarks, it was question and answer time, as participants who had a rare opportunity of sitting with the busy businessman threw series of questions that elicited insightful information on the group businesses and activities.
For instance, Dangote disclosed that the Group presently has 30 projects going on simultaneously, including the construction of its global Headquarters building and other investments in businesses which are yet to begin commercial operation.
He also revealed to the consternation of the participants how he didn’t go on vacation for thirteen years having been occupied by one business or the other. “In fact, I had to sell my three houses abroad since I am not using them and the urge to travel was not there. One would have to be paying tax on empty houses, which makes no sense at all. These are the sacrifices.
On whether, the Group is too big to fail, Dangote said he had never had the mindset of failing. “For some of you who have been to my office before, you will see a plaque with the inscription ‘Nothing is impossible’. That being the case, you also have to insulate yourself against failure. There were notable flourishing businesses yesterday which are no more. But we are also mindful of the challenges and we are very strategic. See how we are doing it.
“We have gone into refinery, we added fertiliser. For instance, if by tomorrow, cement is no more attractive, we already have refinery. With the magnitude of the refinery we have more than 2, 870 pieces of critical equipment being used at the site, at the end of the day we will deploy them into construction business, so we will use those pieces of equipment to make money. We undertake calculated approach to getting our outcomes by mitigating against factors that affect our outcomes,” he said.
In his remark, Emir of Kano, Alhaji Muhammadu Sanusi, who is also a risk expert, lauded the business ingenuity of Dangote, saying he was doing what Nigeria as a nation should be doing.
He said by the time Dangote Petroleum Refinery comes on stream and other projects are completed, Dangote Group would be accounting for nearly 60 per cent of Nigeria’s Manufacturing GDP while his business will account for about 39 per cent of the Stock Exchange.
He spoke at length on the need for robust risk management in view of the changing dynamics in risk management; and the need to think outside the box in order not to be caught napping with changing trends.
Also, Fajemirokun, in her paper titled “Where are we coming from; Where we are; Key Achievements and Where We are going”, highlighted some progress made over the years by the group, saying the company was adjudged top 10 in Africa and top 400 globally, adding that by the time all other projects come on stream Dangote Industries Limited will be top 100 globally.
“Presently, we are globally competitive, growing local capacity to manufacture quality products. We are gradually transforming to a dominant African brand. The Dangote Cement Plc remains the most capitalised company on the Nigerian Stock Exchange. All Staff of Dangote Group now have full insurance cover for themselves and spouses.
“An organisation’s ability to weather storms depends on how seriously executives take risk management when the sun is shining, and no clouds are on the horizon. Our key responsibility as we look ahead is to keep moving till we build Risk maturity level to where this is green across all portfolios.”
Other top management member that took participants at the retreat through different sessions include the Group managing director of Dangote Industries Limited, Mr. Olakunle Alake; Group managing director of Dangote Cement Plc, Engr. Joseph Makoju; chief operating officer of Dangote Petroleum Refinery, Mr. Giuseppe Surace; and Hajiya Halima Aliko Dangote who took the participants on the dynamics involved in managing the Group Commercial Operations.
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