Dangote invests ₦121 billion on domestic sugar production
Dangote Sugar Refinery (DSR) Plc, a subsidiary of Dangote Industries Limited, has so far invested ₦121 billion on its ambitious Sugar for Nigeria Backward Integration Project Plan, which is aimed at developing domestic sugar production capacity through home-grown sugarcane.
Addressing shareholders yesterday at the annual general meeting in Lagos, Chairman, Dangote Sugar Refinery (DSR) Plc, Alhaji Aliko Dangote, said the company has spent ₦121 billion on equipment, land acquisition, compensation to land owners, consultancy and related services.
According to him, the company has continued to make commendable progress in the implementation of the backward integration project including the payment of ₦3.25 billion as full payment for land acquisition for the 60,000 hectares Tunga Sugar Project in Nasarawa State and mobilisation of necessary developmental work to site after signing of a Memorandum of Understanding (MoU) with the state government.
He pointed out that despite major setbacks like flood, community relations issues and most recently clashes between host community and Fulani herdsmen that hampered progress, the group’s Savannah Sugar Company remained the only company producing sugar from own-grown sugarcane in the country with more than ₦30 billion spent so far on purposeful investments in land rehabilitation, infrastructure, field expansion projects and equipment.
He said the company has made further commitment with substantial investments in replanting existing fields and increase factory capacity from its current 3,000tcd to 6,000tcd and addition of a new 12,000tcd factory to cater for expected improvement in cane output and production.
“Negotiations with the government and local communities in Kwara and Niger on land acquisition processes are ongoing, in line with the backward integration sites plan. Project activities will resume in Taraba State when the rain assuages-after issues with the Government and local communities over the Lau/Tau project which has recently been resolved,” Dangote said.
He noted that DSR has continued to outperform its records despite the uncertainties and various socio-economic challenges as it recorded strong growth in sales and profit in 2017.
Key extracts of the audited report and accounts of DSR for the year ended December 31, 2017 showed group turnover of ₦204.42 billion, 20.4 per cent increase on ₦169.72 billion recorded in 2016. Profit before tax rose by 173 per cent to ₦53.6 billion in 2017 as against ₦19.61 billion recorded in 2016. After taxes, net profit jumped from ₦14.4 billion in 2016 to ₦39.8 billion in 2017. Earnings per share leapt from ₦1.20 to ₦3.31.
Shareholders yesterday approved distribution of ₦15 billion as final cash dividend, in addition to an interim dividend of ₦6 billion earlier paid during the year, bringing the total dividend for the 2017 business year to ₦21 billion. Shareholders will receive final dividend per share of ₦1.25 in addition to an interim dividend per share of 50 kobo, representing a total dividend per share of ₦1.75.
“The board remains focused on engaging more strategies for optimum delivery to all stakeholders,” Dangote said.
In his remarks, Acting Managing Director, Dangote Sugar Refinery (DSR) Plc, Mr. Abdullahi Sule said the company would continue to pursue its target to achieve 1.08 metric tonnes of refined sugar annually in six years and eventually 1.5 million metric tonnes in 10 years.
According to him, the focus of the company remains leveraging on its strengths to maximise every opportunity to generate sales, increase its market share and create sustainable value for all stakeholders.
“Though the business terrain remains very challenging, we remain resilient in the face of the situation and are focused on increasing our market share and customer base as well as the creation of sustainable value for our stakeholders. Our priority in the current year is the achievement of our Sugar for Nigeria Project goals and sustenance of our leadership position by improving efficiency and growing our markets,” Sule said.