Rating Release

Agusto & Co. hereby assigns an “A+” rating to Dangote Industries Limited.

The rating expires on 30 June 2025.

Agusto & Co. hereby assigns an “A+” rating to Dangote Industries Limited (“Dangote Group”, “DIL” or “the Group”). The rating reflects strong earnings and cash flow expectations across its refinery and other non-oil businesses, as well as the prospect of increased dollar revenues from the sale of its refined petroleum product, fertilizer and cement to other markets in Europe and Africa. The rating also considers the Group’s diversified business structure, which has helped to build some resilience against adverse economic headwinds, and the strong competitive and leading market positions held by its subsidiaries across various sectors. This is in addition to the systemic importance of the Group’s operations (particularly the refinery business) to Nigeria and the broader African region. The rating is however constrained by the Group’s elevated debt profile and huge foreign currency (FCY) exposure, as well as concerns over the undue reliance on the Nigerian National Petroleum Company Limited (NNPCL) for crude oil supply, which could undermine the overall efficiency of the refinery. However, we recognise that the refinery’s flexible design, which allows it to handle a wide variety of crude grades, could help to mitigate the risk of supply disruptions from NNPCL. Also, the Group has made significant strides in securing a stable supply of crude oil to its refinery with its subsisting supply contracts with International Oil Companies (IOCs) operating in Nigeria, and the planned diversification into crude oil production after it secured Oil Mining Leases (OMLs) 71 and 72 in the Niger Delta. While we recognise positive steps to develop a robust succession plan that will ensure a smooth transition of leadership at DIL, the influence of its Founder, Alhaji Aliko Dangote, remains significant, thus posing a key man dependency risk.

Dangote Industries Limited is a closely held conglomerate with operations spanning several sectors in Nigeria and across Africa. Founded in 1978 by Alhaji Aliko Dangote, the Group has grown to become the largest industrial conglomerate in West Africa with dominance in cement manufacturing and a significant presence in other sectors including sugar, salt, condiments, fertilizer and other support segments like packaging, logistics, automobile assembly, coal mining and port operations.  Dangote Cement PLC is the flagship subsidiary and contributes the highest in terms of revenue although this is expected to change with the coming on stream of the refinery. In February 2024, the 650,000 barrels per day (bpd) crude oil refinery commenced operations to mark the Group’s debut in the oil & gas sector with the production of Automotive Gas Oil (“AGO” or “diesel”), Aviation Turbine Fuel (“ATF” or “Jet Fuel”) and Naphtha, while Premium Motor Spirit (“PMS” or “Gasoline”) was later introduced in September 2024. The Dangote Group has a significant presence in Nigeria and operates in several other African countries including Zambia, Tanzania, Ethiopia, South Africa, Senegal, Ghana, Cameroon and Sierra Leone. In line with its backward initiative, the Group continues to invest massively in agriculture and oil mining assets to secure a steady supply of farm produce and crude oil to its food and refinery businesses.