Dangote: Placing Sustainability ahead of Wealth Creation

0
Dangote Cement Factory, Obajana, Kogi

Since the traditional belief that businesses are set up for profit-making is fast being weakened by new global realities, brands across the world are left with no option than to consciously seek ways to create value for their employees, customers, shareholders and investors as well as governments and host communities. Dangote Group has blazed the trail by becoming the first Nigerian company to publicly unveil how its business impacts lives, reports Bamidele Famoofo

Dangote Cement Plc, the most capitalised company in Nigeria and largest producers of cement in Africa, which also ranks amongst the top 10 in the world, recently blazed the trail as the first quoted company to present the facts behind its sustainability report to investors and analysts on the floor of the Nigerian Stock Exchange.

The point it wanted to prove and which it succeeded doing as it presented its fact sheet to investors and analysts was to tell the world that its primary aim of spreading its fast-growing cement business across the continent of Africa, beginning from Nigeria, is not to just make the money, but to also better the lives of the people everywhere it runs its business in seven critical ways.

The President and Chief Executive Officer of Dangote Group, Aliko Dangote, made the objective of the conglomerate for embracing the global sustainability tenets succinctly clear: “It’s not all about making money. It’s about making impact. For more than 20 years, Dangote was just a trading company. Then we decided we wanted to be an industrial giant and we had to start from somewhere. It wasn’t just about cement. It was about industrialisation. If you look at what Dangote Group is doing, it’s about improving people’s lives”.

Dangote’s Group Chief Sustainability& Governance Executive, Dr. Ndidi Nnoli-Edozien, also notes that the main driver of sustainability in the group is the fact that the global business space is fast evolving and that more and more, the critical question that entrepreneurs and CEOs are made to answer is: “what is the impact of your business on stakeholders and the society?”

“It is therefore part of our business strategy to always ensure that our market presence is positively felt, not just in the local communities where our businesses are directly sited, but within the larger population and host countries. This is the only way we can continue to grow sustainably and make even greater impact,” Edozien asserted.

Sustainability Pillars

The Dangote Group sustainability programme is hinged on seven pillars. They are financial, economic, operational, institutional, social, environmental and cultural.

Financially, the group intends to achieve sustainable financial health through a business model that delivers strong returns to shareholders, whilst creating value in the economies in which it operates, by selling high quality products at affordable prices, supported by excellent customer service.

It wants to build a world-class institution centered around corporate governance best practices and sustainability principles that promote legal and regulatory compliance, transparency and business continuity.

Economically, the group is set out to promote inclusive, sustainable economic growth, self reliance, self-sufficiency and industrialisation across Africa, by establishing efficient production facilities and developing resilient local economies in strategic locations and key market.

In the area of operations, Dangote Group yearns to serve and satisfy its markets by working together with partners to deliver the best products and services to its valued customers and stakeholders, through continuous product improvement, new business development, employing state-of-the-art technologies and systems to constantly optimise cost-efficiencies.

Environmentally, the focus of the group is to create sustainable environmental management practices, through a proactive approach to addressing the challenges and opportunities of climate change, while optimising its performance in energy efficiency, water usage and emissions. The cultural pillar embodies its core values in the way it does business which includes respect for cultural diversity and giving back to the societies in which it operates. “To achieve this, we actively encourage teamwork, empowerment, inclusion, equity, integrity and meritocracy within our organisation.”

And socially, it is creating a learning environment and platform for its employees to grow and achieve their fullest potential, whilst adhering to the highest standards of health and safety. “In our host communities, we strive to develop resilient and sustainable prosperity through direct and indirect employment, skills transfer and local entrepreneurial development.”

Impact

For Dangote Group, operationalising its seven sustainability pillars means supporting Africa to develop rapidly and sustainably. This is why it continues to invest in sectors that have the potential to bolster infrastructure development, massive job creation, and to reverse Africa’s decades of import dependence which has stifled local industries and foreign exchange earnings.

For example, from importing 68 percent of its cement needs as at 2004, Nigeria is now a net exporter of the commodity, due mostly to Dangote Cement’s huge investments and aggressive expansion.

Today, Dangote Cement makes up seven out of every 10 bags of cement used across Africa. “As we grow, we are committed to ensuring that our business growth translates to positive socio-economic progress in the markets where we do business,” Dangote said.

Through its sustainability function, Dangote Group is enacting the philosophy that a win-win approach to business helps it build a sustainable and respected brand. “We propose to earn our social licence to operate by building sustainable local economies around all our areas of operation. We value the contributions of our stakeholders towards the success story that the Dangote brand has become. We will continue to engage our host communities and build long-lasting, mutually-beneficial relationships. We understand the importance of securing the well-being of our people, local communities, and the natural environment.”

Towards achieving its lofty sustainability goals, Dangote Cement Group held its first ever sustainability week across its Nigerian and Pan African operations in 2018 where over 500 Dangote employees took part in social impact initiatives that further strengthened its relationship with host communities.

Also to keep its sustainability journey on track, the group is leveraging various global partnerships which include the United Nations Global Compact, the World Economic Forum, and the Global Cement and Concrete Association. Dangote says it is committed to sustainability principles and standards such as the IFC Performance Standards, the Nigerian Stock Exchange Sustainability Disclosure Guidelines and the Global Reporting Initiative.

“As one of the 10 biggest cement companies in the world, we recognise the need to align with global standards and best practices. We also realise that the adoption of global sustainability principles and standards is good for our business.”

The group says it is strongly optimistic about Africa’s economic prospects and is committed to using its quality products, services and investments to expedite the continent’s sustainable growth and development.

“We aim to be the number one in everything that we do. Our business strategy has always been one that enables our ‘play to win’ approach. Sustainability is gaining more traction across the

Dangote Group as we deepen our commitment to deploying a win-win approach to business partnerships, whilst retaining industry leadership in Nigeria, Africa and the globe,” Dangote assures.

Benefit

Dangote financial performance in 2018 gives credence to its commitment to growing a world-class business that increasingly creates and sustains value for all stakeholders. Compared with 2017, group’s gross revenues in the year under review grew by 11.9 per cent, from N805 billion to N901 billion. Profit before tax also rose by 13.8 per cent year-on-year, from N454 billion to N517 billion in 2018. A review of its value added performance shows that earnings per share rose from N11.6 to N22.8, a 96.5 per cent increase over the 2017 figure. Wages, salaries and other employees’ benefits also increased by 15.4 per cent, from N49.9 billion to N57.6 billion. Similarly, wealth created for local suppliers and vendors across its supply chain rose by four per cent, from N281 billion in 2017 to N292 billion in the year under review.

In addition to nurturing its growth numbers which are critical to its financial pillar, Dangote group also made tremendous progress in its economic and social pillars in 2018. With over N1.4 billion new investments in social projects and nearly 1000 students benefitting from Dangote scholarships in its Nigerian operations alone, it remains focused on building lasting relationships with host communities, enhancing their socioeconomic wellbeing and sustaining its social license to operate.

“We also continue to improve on our health and safety standards in the workplace and in local communities as well as our investments in human capital development.”

The group says Dangote Cement Plc remains the flagship from which its sustainability agenda will be replicated across all the other businesses, being poised to harness best practices in sustainability and governance to further solidify its leadership in the diverse markets where it plays.