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As part of its expansion plans in the agricultural sector, the Dangote group is to spend $800 million on dairy-farming.  The company also plans to start dairy production by 2018. Mr Edwin Devakumar, Group Executive Director of the group disclosed this in a Bloomberg interview. Here are key highlights of the group’s expansion plans in the agro sector:

  • A total of $4.6 billion will be spent in the sector in the next two years.
  • $3.8 billion will be spent on sugar and rice.
  • Sugar production will be increased from its current capacity of 100,000 tonnes to 1.5 million tonnes.
  • 1 million tonnes of rice will be added to current production.
  • $800 million will be spent on dairy-farming.
  • The company plans to start producing milk by 2019 .

What are the implications of the planned expansion ?

The group will most likely fund this expansion from either debt or raising fresh capital. The increase in production means more jobs will be created. There could also be a reduction in prices of those food items, as the Dangote group is known for selling at slim profit margins to move volumes.

Dangote group is one of the largest conglomerates in the country with operations spanning from cement manufacturing, port operations and real estate. Currently the group is constructing Africa’s largest refinery in Lagos State.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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