The Rise of Aliko Dangote Part 8

One of the key business philosophies that drove Dangote’s expansion during this period was the concept of backward integration. Rather than continuing to rely on imports, which were subject to price fluctuations and supply chain disruptions, Dangote sought to gain control over the entire production process. This meant not just manufacturing finished goods, but also producing the raw materials needed for those goods.

For example, in the cement industry—a sector that would eventually become one of Dangote’s most significant enterprises—backward integration involved not only producing cement but also acquiring the necessary raw materials such as limestone, gypsum, and other key components required for cement production. By securing control over these resources, the Dangote Group could ensure a consistent and cost-effective supply of raw materials, which in turn allowed the company to produce cement at a lower cost and sell it at a competitive price in the market.

The strategy of backward integration became a hallmark of the Dangote Group’s operations across various sectors. It allowed the company to mitigate risks associated with external suppliers and market volatility, while also driving down costs and improving profit margins. Furthermore, by producing raw materials and finished goods domestically, the Dangote Group contributed significantly to Nigeria’s economic development, reducing the country’s dependence on imports and creating jobs for thousands of Nigerians.

As the Dangote Group continued to grow throughout the 1980s and 1990s, it became clear that Aliko Dangote’s ambitions were not limited to Nigeria alone. He envisioned the Dangote Group as a pan-African conglomerate that would play a leading role in the continent’s economic development. To this end, the company began expanding its operations beyond Nigeria’s borders, establishing a presence in several other African countries.