Business
South Africa’s Public Investment Corporation invests a further $289 million in Dangote Group
Aliko Dangote – Chairman and CEO of the Dangote Group
Africa’s largest asset manager, the South African-based Public Investment Corporation, will consider investing in more companies linked to Aliko Dangote, as it seeks to tap industries benefiting from economic growth.
The Public Investment Corporation earlier this week invested US$289.3 million in Dangote Cement Plc to take a 1.5 percent stake and said the deal will also offer opportunities in Dangote’s sugar, flour, oil refinery and port operations, Fidelis Madavo, head of resources at the investment company, wrote by e-mail on Wednesday.
The Public Investment Corporation has as much as US$7 billion to invest in Africa and is targeting as many as 20 listed stocks across industries such as consumer, infrastructure, telecommunications and agribusiness as growth rates accelerate, he said.
Shares of the Dangote Group’s sugar and salt businesses rose as much 10 percent after the comments were made public.
“This rally might be sustained for the next couple of days,” Lanre Buluro, head of research at Primera Africa Securities Ltd., said by telephone from Lagos. “I’d like to see if the Public Investment Corporation will look into other blue chip companies outside of Dangote in our economy. That would be positive for our market.”
Nigeria’s US$269 billion economy is projected to grow by 7.2 percent this year, according to the latest numbers released by the International Monetary Fund (IMF). That compares with an estimated 5.6 percent growth rate for sub-Saharan Africa.
Dangote Cement, Africa’s biggest producer of the building material, plans to expand significantly throughout sub-Saharan Africa, Madavo said. Dangote Sugar Refinery Plc rose 10 percent, before closing 0.7 percent higher at N12.85 (US$0.079) at the 2:30 p.m. (9:30 a.m. EDT) close in Lagos, while Dangote-owned National Salt Company Nigeria Plc also added 10 percent, before closing 4.8 percent higher to a five-year high at N14 (US$0.086).
The cement deal “offers the Public Investment Corporation other investment opportunities in Dangote Group portfolio companies,” Madavo said in the response to questions.
The Dangote Group is sub-Saharan Africa’s largest and most efficient cement producer.
The Lagos-based cement company, West Africa’s largest by market value, can produce 19.3 million metric tons in Nigeria, with plans to increase that to 29 million metric tons by 2015. Operations will start in Cameroon, Zambia and South Africa in 2014, and the Democratic Republic of Congo in 2015.
Dangote Cement will probably list shares in London in the fourth quarter of 2014 or first three months of 2015, Dangote said last month in an interview in Cape Town, where he also said he’s negotiated US$4.25 billion of loans to build a refinery in Nigeria. – The first privately owned refinery in sub-Saharan Africa