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Business News

Dangote Sugar winds up sugar business in Niger State

The Board of DSR has completed all winding-up proceedings for its Backward Integration Project in Niger State.

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Quick take: Sustained cost pressure weighs on profit, Dangote Sugar Refinery: Revenue recovers but cost pressures remain

Dangote Sugar Refinery Plc, one of the leading producers of refined sugar to consumers and industries in Nigeria has successfully wind up its sugar business in Niger State – under the Dangote Niger Sugar Limited.

According to a note by the company, this decision was made in an effort to cut down on deadweight cost, coming from a stretched situation from its host community which had started accumulating negative returns for the integrated sugar business.

The company noted that after a careful assessment of recent disruptions to its operation as projected in the state, due to community dispute over the land acquired in Niger, the Board of DSR in December 2020 completed all winding-up proceedings for the Backward Integration Project Company in Niger State.

READ: Dangote’s net worth declines by $1.2 billion in February

Key facts about the Project

The Dangote Niger Sugar Limited was created through an MOU between the Niger State Government and Dangote Sugar Refinery Plc, for the establishment of an integrated sugar project in the State.

The 12,000 tcd mill located on a 16,000ha land near Mambe, Lavun LGA of Niger State, had an estimated set-up cost of $450million.

READ: Dangote Sugar Refinery in Tunga to produce 450,000 MT

The Sugar project was established as an integral part of the company’s Backward Integration Project (BIP), with a 10-year sugar development plan to produce 1.5 million MTPA of sugar from locally grown sugarcane, under the Nigeria Sugar Master Plan (NSMP), a plan implemented to make Nigeria self-sufficient in sugar production.

The BIP Company in Niger State was the fourth sugar project by Dangote Sugar, after the Savannah Sugar Company – Numan Adamawa State, Lau/Tau Sugar – Taraba State and Tunga Sugar Project in Nasarawa State.

READ: Four FMCG companies lost 15.2 billion in value in a single day

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What you should know

  • Dangote Sugar Refinery Plc is one of Nigeria’s leading integrated sugar companies, and a major refiner of raw sugar with a key focus on the production of fortified and non-fortified granulated white sugar.
  • The company has a total installed capacity of 1.44 million metric tons (MT) per annum with key expansion plans in place.
  • Its operational activities aside sugar production include, the distribution of refined white sugar to consumers and industrial customers in the country, and also the exportation of its products to other West African countries.
  • In 2020, Dangote Sugar delivered an impressive financial performance, with the company’s earnings soaring by 33.0% to N29.8 billion for the financial year of 2020.

Omokolade Ajayi is a graduate of Economics, and a certificate holder of the CFA Institute’s Investment Foundation Program. He is a business analyst, and equity market researcher, with wealth of experience as a retail investor. He is a business owner and a stern advocate of Financial literacy, who believes in the huge economic prospect of the Nigerian Payment channels and Fintech space.

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    Business

    FG gives completion date for Apapa-Oshodi-Ojota-Oworonshoki road project

    The government said the reconstruction/rehabilitation of the expressway will be completed within 9 to 10 months.

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    AfDB's Akinwumi Adesina and Ekiti State Governor Kayode Fayemi, AfDB to support Ekiti State road and airport upgrade

    The Federal Government has given a timeline for the completion of the Apapa-Oshodi-Ojota-Oworonsoki expressway project.

    The government said the reconstruction/rehabilitation of the expressway which was inaugurated by President Muhammadu Buhari in November 2018, to resolve the Apapa traffic gridlock, will be completed within 9 to 10 months.

    This disclosure was made by the Federal Controller of Works in Lagos, Mr Olukayode Popoola, during a joint inspection with the Nigerian Ports Authority (NPA) on Saturday, April 17, 2021.

    He assured that section one of the project would be completed within 3 weeks and thereafter opened for use.

    Popoola said that the rehabilitation works, which had been divided into four sections to ease port congestion and gridlock at the Apapa axis, have section one which spans from Liverpool Round through Creek Road to Beachland near Sunrise and is about 10 km, while section two is 8.4 km and spans from Beachland to Cele Bus Stop.

    Briefing the press after the inspection that also had in attendance the NPA Managing Director, Hadiza Usman, and the Hitech Construction Company, the subcontractor handling the project on behalf of the Dangote Group, Popoola said that grey areas such as accessibility due to trucks infringing on construction zone and disagreements on the pace of construction had been resolved.

    What the Federal Controller of Works in Lagos is saying

    Popoola said that the inspection gave the NPA team the opportunity to see for themselves that the contractor had been working progressively.

    He said, “And this section that we are is the end of section one which we have completed. We will complete the remaining portion within the next three weeks, especially the asphalt work.

    So within that three weeks, the outstanding works will be completed fully and then the section one will be made available to the motorists.

    We (FMW) also complained about the trucks that are infiltrating the road while we are working. We have told them (NPA) that we cannot allow trucks to flock onto the section where we are working because they will disturb the contractor.

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    So the trucks will now be monitored and controlled fully. Both the NPA security, the Nigerian Police, LASTMA and then the contractor’s representative will form a synergy to work out how they will be controlling the trucks that enter into the port road henceforth,’’ Popoola said.

    He said the contractor is expected to move to site to start the construction works on section two of the project based on agreement adding that work on sections three and four had reached an advanced stage, with over 70% completion reached cumulatively.

    Popoola said that the entire project would be completed and handed over within the next nine to 10 months, including section two which had just been awarded.

    Stanbic 728 x 90

    The NPA Managing Director said that agreements were reached on timelines for construction works in order not to disrupt port operations with resolutions that the contractor worked during the weekends and on public holidays to ease congestion.

    She said it was resolved that a corridor would be opened for trucks movement in addition to palliative works on some roads and another inspection in three weeks on section one.

    The contract was awarded to AG Dangote Construction Company Ltd at the cost of N73bn under the Tax Credit Scheme of the Federal Government.

    What you should know

    • It can be recalled that the Federal Government had earlier in the year said that the first phase of the Apapa-Oshodi-Ojota-Oworonshoki project, which has faced several delays, would be delivered in April 2021.
    • The government said that sections one, three and four of the project which was awarded to AG Dangote Construction Company Ltd at the cost of N73bn under the Tax Credit Scheme of the Federal Government, were almost ready and would be completed in April.
    • They had also said that section two of the project which spans from Beach Land bus stop area to Cele Bus Stop which was recently awarded would also be completed in December 2021.

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    Business

    USSD N42 billion debt: Telcos insist banks have to pay, seek CBN, NCC intervention

    Telcos in Nigeria have called for the intervention of the CBN and NCC as they insist that banks have to pay the N42 billion debt for the USSD services.

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    Bank CEOs, NCC, CBN to meet over USSD charges

    Telecommunications companies have insisted that the banks have to pay the N42 billion debt for the Unstructured Supplementary Service Data (USSD) and called for the intervention of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) over the dispute.

    This follows the accumulation of the debt to the mobile network operators over a period of about 1 year for services rendered to the deposit money banks.

    According to a report from Punch, this was made known by the Chairman, Association of Licensed Telecommunications Operators of Nigeria, Gbenga Adebayo, who said that this has become a moral burden on the banks.

    What the Chairman, Association of Licensed Telecommunications Operators of Nigeria is saying

    Adebayo, in his statement, said, “The over N42bn debt remains outstanding and the banks have to pay the telcos. It has become a moral obligation because the banks used the services, debited their customer accounts and now not paying the telcos.

    Who do they expect to pay and what were the deductions made from their customers for USSD services, which you and I were debited for?

    What is the deduction meant to for? It’s a debt and the banks have to pay the operators. It’s a moral obligation.”

    On the association’s next step should the banks refuse to pay, Adebayo stated that the CBN and NCC would have to intervene.

    He said, “We are hoping the regulators, CBN and NCC, having intervened by preventing operators from disconnecting the USSD services, will resolve the lingering debt issues.

     “They (banks) owe the operators and they will pay. Otherwise, where is the money deducted for USSD services from their customers? You and I know we were charged for USSD transactions; what is the deduction meant for?

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    What you should know

    • It can be recalled that telecommunication firms under the aegis of the Association of Licensed Telecommunication Operators of Nigeria (ALTON), had threatened to withdraw their Unstructured Supplementary Service Data (USSD) services to financial institutions from March 15 due to the N42 billion accumulated debt.
    • However, following the intervention of the CBN and NCC, the planned action was shelved with both parties (the telcos and the banks), going into a meeting with the Federal Government representatives.
    • As a fallout of the meeting, the CBN and NCC announced the introduction of N6.98 per transaction as new charges for customers using the Unstructured Supplementary Service Data (USSD) services with effect from March 16, 2021.
    • Recently, the Chief Executive Officer, Access Bank Plc, Herbert Wigwe, reportedly stated that Nigerian banks were not indebted to telecommunications firms for using telcos platforms to provide payment services.
    • The statement made the President, Association of Telecommunications Companies of Nigeria, Ikechukwu Nnamani, ask CBN to call the banks to order as regards agreements reached on the settling of the N42bn.

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