PH
Dangote Sugar Plc, a company of Africa’s richest man Aliko Dangote’s Dangote Group, plans to phase out sugar imports from Nigeria within the next four years. The ambitious goal, announced during the company’s 18th AGM, is based on a shift toward backward integration.
“In the next four years, our company should be producing what we are selling now entirely domestically,” Dangote stated, highlighting the necessity of the national backward integration program. This policy aims to develop a self-sufficient domestic sugar sector by encouraging local production.
Dangote emphasized the policy’s ability to reduce foreign exchange losses, a critical concern for the corporation in 2023. Dangote Sugar incurred approximately N201 billion ($143.38 million) in realized and unrealized FX revaluation losses for the fiscal year 2023.
The company’s aim for self-sufficiency in sugar production is 700,000 tons, which can be achieved by increasing cultivation in Nasarawa and Numan. Any future imports would supplement the growing domestic output. This approach is consistent with Dangote Sugar’s overall goal of increasing Nigeria’s agricultural self-sufficiency and lowering its dependency on foreign imports.
Dangote also addressed the pending merger of Dangote Sugar and its subsidiaries, Nascon and Dangote Rice Ltd. The Securities and Exchange Commission (SEC) delayed the merger due to delays in the rice factory’s operation.
However, Dangote promised shareholders that the Jigawa rice facility, which has a 1-million-tonne processing capacity (34 percent of national processing capacity), will be operational soon.
Dangote Sugar Refinery, a subsidiary of Dangote Group, is a Nigerian diversified industrial company with interests in cement, fertilizer, sugar refining, and petrochemicals. The major sugar company has a refining capacity of 1.44 million metric tons, making it Nigeria’s largest home and commercial sugar producer.
Aliko Dangote, Africa’s richest individual with $15.3 billion (Bloomberg Billionaires Index), controls 72.7 percent of Dangote Sugar Refinery. Dangote’s stock is currently valued at $268 million.
The current naira devaluation has continued to have a financial impact on Dangote Sugar in 2024. In the first quarter, the company reported a loss of N68.99 billion ($49.6 million), compared to a profit of N12.8 billion ($9.2 million) the previous year.
However, a 20% year-over-year sales increase from N102.22 billion ($73.4 million) to N122.73 billion ($88.17 million) indicates the company’s resiliency in a changing industry.
