Determined the tap into the opportunity provided by the scarcity of forex in the country to create jobs, foremost entrepreneur, Aliko Dangote has embarked on the establishment of multi-million dollar vehicle assembly plant project in Lagos
Specifically, the plant will be churning out heavy duty trucks on which his conglomerate, the Dangote Group spends huge amount on its importation to distribute its products both locally and across African countries.
Dangote is partnering a leading Chinese Company, National Heavy Duty Truck Group Company Limited, SINOTRUCK to produce several thousand of trucks used mainly for haulage business from its newly promoted assembly plant at Ikeja, Lagos.
The decision to go into the truck assembly plant project was informed by the need to conserve forex in view of the current economic recession that is facing the country.
The deal which worth $100 million which is expected to have an assembly plant that will produce 10,000 trucks per year was signed in May 2014 in China, making it the eighth of Shandong, China (SINOTRUK), to be built abroad.
According to the deal agreement, the plant is 60% owned by Dangote Group, trading under Dangote Industries Limited, leaving SINOTRUK with the remaining 40% equity stake.
Consequently, Dangote Agro Sacks Limited, which occupied the Oba-Akran Ogba premises of the former Nigerian Textile Mills, until recently, has been relocated closer to the group’s major operational hubs, particularly the cement plants in Obajana, Kogi State and Ibeshe, Ogun State.
The assembly plant is expected to generate employment for an estimated 3,000 workers, when fully operational.
Nigeria remains one of the most important markets for SINOTRUK, with Dangote Group operates the largest truck fleet in Africa with over 10, 000 trucks using them for the distribution of its products, like cement, sugar, flour and pasta, among others, even in its plants across the continent.
Chief Corporate Communication Officer of Dangote Group, Mr. Anthony Chiejina confirmed the project has taken off and that when fully operational, the nation would be spared the nation of huge amount of forex spent in the importation of the heavy duty vehicles.
According to him, there will be room for the expansion of the project in years to come as it meets the national truck demand, it would explore exportation to neighbouring countries to generate foreign exchange for the nation.
Chiejina said the Group President, Aliko Dangote has always believed that the current economic challenges when approached positively will make Nigeria stronger at the end of the day, pointing out that “Alhaji Aliko still be lives that Nigeria is one of the best places in the world to do business”
The automobile assembly plant is also coming ahead of another landmark project, a $17 billion, 650,000 barrels per day capacity Dangote Refinery, petrochemical and fertilizer plants located in Lagos expected, to begin operations in the next two years and creating over 300,000 direct and indirect jobs by first quarter of 2019, which would require a lot of long trucks for product distribution.
It would be recalled that in preparation of completion of the refinery project, some 100 trainee engineers have been sent on training abroad to handle sensitive aspects of the multi-billion Dollar investment in petroleum products and petrochemical plant.
In 2014, according to reports, Dangote Group imported 12,000 trucks from China. That year alone, and despite shrinking domestic and overseas demand, Sinotruk still secured orders for 176,000 vehicles, up by 9.94% from the previous year.
Of this, SINOTRUCK sold 34,000 abroad, contributing to almost 20% of its total sales volume and making it the largest exporter of heavy trucks in China for 10 consecutive years.
According to China Daily, a leading Tabloid in China, SINATRUCK revenue from overseas sales amounted to 9 billion yuan ($1.45 billion), accounting for about 13% of the total.
SINOTRUCK realised it had to become global more than ten years ago when few China made heavy trucks were being exported. Other 30 of its 96 export markets are in Africa, where about 15,000 vehicles are sold every year.
Earlier in 2013, Alhaji Dangote signed a contract in Beijing with the Chinese firm, through its chairman, Ma Chunji, for the supply of 1,700 heavy trucks and 1,700 semi-trailers.
Final technicalities on the deal were concluded on the eve of the state visit to China by then President Goodluck Jonathan, in what analysts said, marked a significant milestone trade relations between both countries.