Nigerian tycoon Femi Otedola said he will add to his purchases of Dangote Cement Plc’s shares after his recent acquisition in part helped propel the wealth of billionaire Aliko Dangote, founder of the cement maker, to the highest in a decade.

Dangote Cement’s shares have more than doubled this month helping add $6.9 billion to its founder’s wealth, which jumped to $22 billion as of Thursday, according to the Bloomberg Billionaires Index. Otedola’s purchases are “work in progress,” after the tycoon bought the stock last week, he said.

The cement maker is also seen as a proxy for Dangote’s new refinery, the world’s biggest such facility in a single location.

The maker of the construction material is attractive because it’s the “only Nigerian cement company with two export terminals and a substantial export capacity,” Otedola said in a series of text messages. The diversification into the refining positions him to capitalize on the growing demand “in Nigeria and internationally, potentially leading to a considerable increase in revenue and, consequently, his overall wealth,” he said.

Otedola’s investment is timely for Africa’s richest man, whose firm was the subject of an anti-graft commission raid this month. The visit by the authorities was an “unwarranted embarrassment,” the group said, adding that it didn’t face any accusations of wrongdoing.

Otedola’s past purchases have triggered rallies in shares of the target firms.

In 2022, he invested in FBN Holdings Plc, and last year his acquisition of a stake in Transnational Corp. of Nigeria propelled the company’s shares more than 600%. Otedola later exited Transcorp.

“Somebody like Femi Otedola buying the stock is boosting investor confidence,” said Jennifer Audu, an analyst at FBNQuest Merchant Bank in Lagos, adding that Dangote Cement’s share price had exceeded her target. “The other is the expectation of better earnings in 2024 and 2023.”

The surge in cement maker’s shares — the company has the biggest weight on the equity benchmark — paced a 36% jump in the NGX All Share Index, making for the best January since at least 1998.

Dangote Cement, which is Africa’s largest producer of the building material, has a production capacity of 51.6 million tons a year across 10 countries, according to its website. Its revenue surged 29% in nine months through September.

But it’s Dangote’s refinery that investors are keenly watching.

The new 650,000 barrel-a-day oil refinery started operations earlier this month. The plant outside Lagos is now producing diesel and aviation fuel, Dangote Group said. The refinery will be key for Africa’s largest economy to process its own crude oil rather than importing costly fuel processed abroad.

“With projected annual revenues of around $30 billion from products like urea, fertilizer, polypropylene, and other refined petroleum products, the refinery will substantially enhance his business interests beyond the traditional sectors like cement,” Otedola said.

Otedola, who has investments in Nigeria’s electricity, petroleum and finance sectors, didn’t disclose the amount of shares he bought in Dangote Cement. He said he will disclose his stake once it hits a limit that triggers a regulatory disclosure.

Bloomberg