CHAPTER ONE

BACKGROUND OF THE DANGOTE FLOUR MILLS PLC.

Dangote flour mills plc recommenced operation in 1999, as a division of Dangote Industries Limited [DIL]. One of Nigeria’s largest and fastest-growing conglomerates. Following the strategic division of DIL to unbundle its various operations. Dangote flour mills were incorporated in 2006, the restructuring was completed in January 2006 when the federal High Court sanctioned a scheme of arrangement wherein all the assets, liabilities, and undertaking of the erstwhile flour division of DIL was transformed to Dangote flour mills.

From the initial installed capacity of 500MT per day at its Apapa mills, Dangote flour has expanded rapidly by opening in quick succession three other flour mills in Kano [2007]. Calabar [2001] and Ilorin [2005]. Each of the mills started with an installed capacity of 500MT per day but all of them have subsequently expanded resulting in a total installed capacity of 500MT per day distributed as follows:.

Apapa- 1,000 MT per day

Kano- 500 per day

Calabar- 1,500 per day

Ilorin- 1,000 MT per day

These expansions were in response to a national demand for flour and flour-based products in addition to the company drive for increased market share.

Thus from a modest beginning, the company has grown to become one of the industry leaders within a six-year period. The company has 3 wholly-owned subsidiaries, namely Dangote agro sacks limited, Dangote pasta limited, and Dangote Noodles limited.

1.1 HISTORICAL BACKGROUND OF DANGOTE FLOUR MILLS PLC.

The groups milling business was commissioned in 1999 and consists of facilities in Lagos-Apapa, Ikorodu, Kano, and Ilorin. All mills have a combined milling capacity of 2.7 million metric tons per annum. The company imports hard wheat from the U.S which is then milled into 50kg bags of flour. The company also produces confectionery flour, semolina, and Alkama – a grain consumed in Northern Nigeria. The flour milling business was operated as a division of DIL until January 2006 when it was Spain-off as Dangote flour mills plc [DFM].

The the division has three wholly-owned subsidiaries Dangote pasta limited, Dangote Noodles limited and Dangote Agro sacks limited.

BOARD OF DIRECTORS:- which comprises executives directors i.;e those involved in the day-to-day running of the company business and (external) directors who do not partake in the daily running of the company but have voting power at board levels on top company decisions.

The the chairman is assisted by the vice-chairman has size (6) executives director namely.

Mr. Olakunle Alake                          Operating officer

Mr. Knut Ulvmoen                   Managing director

Alhaji Abdul Dangote              Logistic and distribution

Alh. Sada Ladan-Baki              Transport manager

Alh. Tajudeen Sijuade              Accountant

These directors formulate policies in their directorate that the adjudge would facilitates the efficient running of their directorates. The directorates are divided into division and the division are divided into smaller units called the department assistant managers and supervisors.

Each manager performs specific and reports to his divisional heads who will brief the manager director and Deputy managing director.

Problems are solved at the directorate level except a major policy shift is imminent before the managing directors are involved.

Below is the organizational structure.

1.2 AN ORGANIZATIONAL STRUCTURE OF DANGOTE FLOUR PLC.

DIRECTOR          DIRECTOR DIRECTOR DIRECTOR             DIRECTOR

SUPPLIER MANAGER PURCHASING MANAGING  STORE

MANAGER CLEARING MANAGER

ASSISTANCE      ASSISTANCE      ASSISTANCE

PURCHASING    MANAGER STORE       MANAGER CLEARING MANAGER

PURCHASING    CLERK       STORE       ATTENDANT  OFFICE ASSISTANT

Buyer and supplier relationship is a continuous exercise and when carried out this program, their certain problem being faced by the company under study.

One of the problem is the rating of supplier on the basis of service depends on the buyers institution which is not from bias.

Another the problem facing the management of the company under study is how to evaluate suppliers on the basis of service thereby eliminating unfair judgment by the buyer. In addition, another problem which the writer is agitating is that whether supplier evaluation has a positive impact on the procurement function. The problem is question is:-

How can a buyer enjoy better services?

Does supplier evaluation enhance effective procurement?

More so, inefficient sourcing buying and suppliers system make for inefficient sourcing management of the organization, this affects the production and profit level and the high increase of exchange rate in the foreign materials have an adverse effects on the level of production and on the level of effective sourcing performance in Dangote flour mills.

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