Dangote Sugar Refinery Plc has concluded plans to invest the sum of $1 billion on expansion projects after the Central Bank of Nigeria (CBN) made the firm one of the 3 sole importers of the sweetener into the country.
This is as the leading sugar company had put more than 100,000 hectares of land under cultivation to grow sugarcane for local sourcing of inputs.
According to Bloomberg, this disclosure was made by the Chief Executive Officer of Dangote Sugar, Ravindra Singhvi, during an investor conference call on Thursday.
Singhvi was quoted as saying, “The plantations in Adamawa and Nasarawa will be ready by 2023 while work to almost double the capacity of a sugar factory in Adamawa to 6,000 tonnes cane-crushing-per-day is ongoing.”
The firm plans to increase capacity to 1.5 million to 2.0 million tonnes of refined sugar annually by 2024, from 403,846 tonnes as of June. The sugarcane plantations will enable Dangote Sugar to source inputs locally, boost its production and increase sales as Nigeria aims to end the importation of sugar to conserve foreign exchange.
Singhvi added, “FG requires us to produce 550,000 tonnes of refined sugar per annum from locally grown sugarcane by 2024. We remain confident of the huge benefits backward integration would deliver.’’
What you should know
- It can be recalled that in July 2020, Dangote Sugar announced the completion of the acquisition of Savannah Sugar as part of an expansion strategy for the firm and the next stage of its backward integration plan to revolutionize the sugar sub-sector of Nigeria’s economy.
- The CBN had earlier in April barred forex supply from official sources for wheat and sugar imports but last month announced that only Dangote Sugar and two other companies will import the product with forex from official sources. The bank said that the companies had made some progress in local sourcing of raw materials, hence the allowance.
- Dangote Sugar earlier in the year, denied claims made by one of its fierce competitors in the sugar market, BUA Sugar Refinery, of involvement in price-fixing and arbitrary collusion to create sugar scarcity and keep the price of the commodity high.
- The reaction came after BUA Sugar Refinery came out to point fingers at the Dangote Group for taking actions and conniving with Flour Mills of Nigeria to push out the competition in the Sugar industry and create a situation of perfect monopoly for themselves.