Dangote Group of companies is one of the largest and most diversified business entities in Africa, with interests in cement, sugar, salt, food processing, oil refining, petrochemicals, fertilizer, amongst other products. The group which has a market capitalization value of over $20 billion has made some notable wins and failures in the market.
This post highlights some failures of Dangote's businesses during the past years of operations.
1. Dangote Noodles:
This brand existed in the early 2000s. While competition from established brands like Indomie played a role, the main reason for its discontinuation was reported to be internal restructuring within the Dangote Group and a strategic shift toward focusing on core businesses. Dangote sold the noodle plants to his competitor and bowed out. A lot of people who laughed at him in 2017 because of this exit are singing his praises now that Dangote Refinery has been launched.
2. Dangote Salt:
This brand faced stiff competition from established players like Master Chef and Uncle Pams. However, the primary reason for its exit in 2014 was a shift in government policy that favored local salt producers, impacting Dangote's ability to source raw materials competitively. In 2016, following an agreement with NASCON, another Dangote company, Dangote Salt was revamped and reintroduced into the market having merged with NASCON.
3. Dangote Juice (Dansa & Ziza):
These juice brands faced competition from established players like Chivita from Chi Ltd. and Five Alive. However, the primary reason for their discontinuation in 2012 was reported to be a strategic decision by the Dangote Group to exit the non-core food business and focus on core areas like cement and sugar production.
Between 2012 and 2017, Dangote faced massive setback in business. But through strategic restructuring including exits, the Dangote Group thrived. If he continued to hold on to underperforming brands, Dangote would have been destroyed. This is why I teach EXIT as an intelligent business strategy.
Competition, Internal restructuring, government policy changes, and strategic decisions by the Dangote Group played a significant role in these exits. Closing 'shop' is also a good business strategy. Don't wait until you have lost everything, consolidate and exit if need be.
© Charles Awuzie
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Business