Lagos (Reuters)-The executive director of the Dangote Group stated that Aliko Dangote, the richest man in Africa, has partnered with the Chinese heavy truck group Sinotruk to invest US$100 million in assembling trucks and cars in Nigeria for local use and export.

The joint venture is owned by Dangote 65% and Sinotruk owns 35%, and will assemble parts imported from Sinotruk to the Nigeria plant.

It aims to meet the country’s anticipated increase in transportation demand because the government is focused on promoting agricultural development and farmers need to transport goods across the vast country.

Edwin Devakumar told Reuters in an interview with Reuters in Lagos that the first trucks will be launched next week.

He said that the plant has the capacity to assemble 16 trucks per day and will export them to West Africa, adding that the plant will be expanded into the field of automobile manufacturing.

"[Dangote Group] has a fleet of 12,000 trucks... and is a big user. One of the biggest challenges in the market today is logistics because we don't have a suitable transportation network," he said.

In March last year, Dangote bid for a majority stake in Peugeot Nigeria Automobile Company. The sale result has not yet been announced.

Regarding Dangote's other interests, Devakumar stated that Dangote is expected to start its US$17 billion refinery, and the first batch of crude oil processing will enter the plant in October 2019. It will process 650,000 barrels per day.

He said that the company will reduce the scale of operations of its flour processing DANGFLO.LG, sugar refinery DANGSUG.LG and tomato processing business, but due to the shortage of U.S. dollars, it will not be able to finance the import of raw materials.

Nigeria is struggling to cope with a shortage of U.S. dollars caused by the low price of its pillar oil, which has hit its currency and reduced its foreign exchange reserves, triggering the first recession in 25 years.

"In the absence of foreign exchange, we are cutting our business," he said. "For example, we closed a vegetable oil refinery and closed a tomato-based processing plant."

He said that Dangote’s cement business, DANGCEM.LG, is continuing because its main raw material-limestone-can be purchased domestically. He added that the company commissioned a new cement plant in Sierra Leone last week and is expected to start production at a plant in Congo this year.

Edited by Ulf Laessing and Alexandra Hudson

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