Former President Olusegun Obasanjo has revealed how Lafarge allegedly put obstacles in the way of Aliko Dangote’s cement expansion. He spoke in Nairobi, Kenya, at the groundbreaking ceremony of a $16 billion oil refinery project in Lamu. The meeting with Kenyan and East African institutional investors was part of activities around the Dangote Petroleum Refinery initial public offering.
Dangote Cement is Africa’s largest cement producer. It operates in 10 countries. Its expansion began in the 2000s. In 2003, Obasanjo summoned Dangote to discuss why he was importing cement rather than producing it locally. Dangote told him importing was more profitable. Obasanjo introduced a policy linking import licences to domestic production plans. Dangote then built a 5-million-tonne plant in Senegal. That success threatened Lafarge’s dominance.
Obasanjo said Lafarge was particularly opposed to Dangote’s expansion. “The people who really didn’t want Aliko to succeed in cement production is a French company called Lafarge, and they put every obstacle on Aliko’s way,” he said. He described the Senegal experience as “traumatic.” After Dangote completed the 5-million-tonne cement plant, local residents, allegedly instigated by Lafarge, challenged his ownership of the land. “Lafarge instigated some local people and said the land on which he built the cement factory is their land. They went to court. Aliko won. They still didn’t leave him. We won, and Aliko had to pay $12 million to be able to operate his cement factory two years after it has been completed.”
Obasanjo said Lafarge wanted to monopolise cement production in Africa. “Lafarge is out of Africa today. Aliko dominates cement production in Africa.”
Winners: Dangote, who overcame the obstacles. Obasanjo, who tells the story. African industrialists, who gain a precedent. Kenyan investors, who gain the refinery opportunity. Losers: Lafarge, whose alleged tactics are exposed. French business interests in Africa. Competitors who failed to stop Dangote. No serious losers if the Lamu project succeeds.
Bottom Line: Lafarge tried to block Dangote. He won anyway. The $12 million payment was a tax on success. Dangote now dominates African cement. The Lamu refinery is the next frontier. The obstacles will come. They always do.