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Author: Victor Ogunyinka

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Dangote Sugar’s investment in BIP revolution in job creation ― NDE

Dangote Sugar’s investment in BIP revolution in job creation ― NDE

The huge investment by Dangote Sugar Refinery in the Sugar Backward Integration Policy (BIP) of the federal government has been hailed by the National Directorate of Employment (NDE), which described its job creation potential as humongous.

Director-General of NDE, Silas Agara who commended the Chairman of the Company, Aliko Dangote during his visit to Dangote Group pavilion at the ongoing Kano International Trade Fair, in Kano said his commitment to the BIP towards achieving Sugar sufficiency in Nigeria is unparallel and worthy of emulation.

Dangote Sugar has so far committed over $700m dollar to the BIP to stem the national annual sugar import of over $337million, so as to ensure Nigeria attains national sugar self-sufficiency which will in turn revolutionalise the economy of the nation as other people-oriented infrastructures would come with the sugar projects being undertaken under the BIP.

Agara who is a former Deputy Governor of Nasarawa State, said Dangote’s commitment is critical for development of sugar industry in Nigeria noting “Dangote Sugar in Tunga in Awe Local Government of Nasarawa State is commendable for improving the Communities in Tunga. It has created job opportunities for the teaming youth and improved livelihoods.

“Nasarawa is proud of Aliko Dangote. Tunga Sugar is a spinner for Nigeria’s economy”, the NDE boss declared while urging the business mogul to step up community advocacy, and more collaboration with stakeholders to drive greater positive change in the Communities.

He noted however, that, “There isn’t any dissenting voice on Tunga sugar, and the communities have enjoyed growth and development through the company Corporate Social Responsibility (CSR) strategies” but call for more of the CSR projects.

It would be recalled that the members of Nasarawa State House of Assembly recently paid a visit to the Dangote Sugar Tunga BIP project which they described as a blessing to the state going by the vast expanse of the project

The Dangote’s Sugar Master Plan, and the company’s commitment to the sugar projects in Tunga, Awe local Government of Nasarawa, and that of Numan, in Adamawa State have scaled up the drive towards realization of National Sugar objectives.

Dangote Sugar refinery recently unveiled plans to produce 700,000 metric tonnes of refined sugar from locally grown sugarcane in the next four years, through its Backward Integrated Programme (BIP).

Chairman of the Company Aliko Dangote had during the Annual General Meeting of the Dangote Sugar, said the management was focused on achieving the revised targets set for DSR Numan operations, Dangote Adamawa Sugar Limited, and Nasarawa Sugar Company Limited.

He then expressed the hope “Dangote Taraba Sugar Limited, Lau/Tau project would also come on stream soon.

Nigeria is one of sub-Saharan Africa’s largest importers of sugar second only to South Africa, but the Dangote Sugar management assured that by the time the company fully completes its sugar projects in Nasarawa and Adamawa under the BIP, the nation would be saved of more than half of the forex expended on sugar imports annually.

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PRESS RELEASE

Dangote Refinery reduces petrol price to N970

Dangote Refinery reduces petrol price to N970

Dangote Petroleum Refinery has effected a reduction in the prevailing price of its Premium Motor Spirit (PMS) from N990/litre to N970/litre for the marketers.

As the year comes to an end, this is our way of appreciating the good people of Nigeria for their unwavering support in making the Refinery a dream come true. In addition, this is to thank the government for their support as this will complement the measures put in place to encourage domestic enterprise for our collective well-being.

While the refinery would not compromise on the quality of its petroleum products, we assure you of best quality products that are environmentally friendly and sustainable.

We are determined to keep ramping up production to meet and surpass our domestic fuel consumption; thus, dispelling any fear of a shortfall in supply.

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Moody’s affirms Dangote Sugar Refinery’s Caa1 CFR, Outlook changed to stable

Moody's affirms Dangote Sugar Refinery’s Caa1 CFR, Outlook changed to stable

Moody’s Ratings (Moody’s) has affirmed the Caa1 corporate family rating (CFR) of Dangote Sugar Refinery Plc (DSR), Concurrently, Moody’s has repositioned the national scale rating (NSR) to Ba1.ng from Baa3.ng. The rating outlook has been changed to stable from positive.  Dangote Sugar Refinery is the largest Sub-Saharan African sugar producer and refiner based in Nigeria.

The global rating agency attributed the change to the negative impact of the Naira devaluation on the operations of DSR.  The rating agency in a statement said, “the affirmation of DSR’s Caa1 CFR and change in outlook to stable with the repositioning of the NSR to Ba1.ng reflects Moody’s view that the company’s raw material import business model continues to be negatively affected by the sharp devaluation of Nigeria’s currency, the Naira, against the US dollar during the last 12 months. The currency devaluation has deteriorated DSR’s liquidity position and materially increased its letters of credit (LoC) in Naira terms, weakening the company’s credit profile.”

It should be noted   in June 2023, the Central Bank of Nigeria (CBN) announced the unification of its multiple foreign exchange windows, merging all official rates into its Investors and Exporters window which has significantly devalued the Naira, particularly in June 2023 and February 2024 from around 460 Naira per USD in June 2023 to around 1,500 in February 2024.

The positive action to be taken against the headwinds of the currency situation in Nigeria is to focus on the Backward Integration Plan for sugar production in Nigeria. DSR has made significant investments and will continue to grow its size of the local sugar production capacity. Given the devaluation of the currency which has made locally produced sugar to have significant profit margin compared to imported sugar. DSR has intensified production activities at its Numan and Nasarawa sugar plantation. The positive action to be taken against the headwinds of the currency situation in Nigeria is to focus on the Backward Integration Plan for sugar production in Nigeria. DSR has made significant investments and will continue to grow its size of the local sugar production capacity. Given the devaluation of the currency which has made locally produced sugar to have significant profit margin compared to imported sugar. DSR has intensified production activities at its Numan and Nasarawa sugar plantation.

According to Moody, factors considered in the rating of DSR include the positive industry fundamentals supported by government regulation and Nigeria’s demographic and societal trends,  DSR’s market positioning as Nigeria’s largest manufacturer and seller of refined sugar, low levels of Moody’s adjusted debt of NGN62 billion excluding letter of credit; and  track record of adequate operating margin of 18 percent  over the last five years and capacity to pass through additional costs albeit with a lag.

Also, the ratings  according to the agency, reflect the company’s exposure to Nigeria, a country that has high social, political, economic and regulatory risks;  high exposure to foreign currency risk exposure due to hard currency imports and local sales under a depreciating Naira currency scenario; exposure to commodity price risk volatility through raw material imports of sugar; (4) high reliance on letters of credit of NGN420 billion as of 31 March, which are interest bearing and used for hard currency working capital financing; and  weak credit metrics driven by a weaker than expected operating performance and large foreign currency losses.

“The stable outlook reflects our expectation that DSR’s volumes will grow towards the levels achieved in 2022 over the next 18 months. The stable outlook also assumes that the company’s outstanding letters of credit with banks will be rolled over and not increase in size, Moody’s Rating concluded.

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PRESS RELEASE

Backward Integration: Dangote targets 700,000MT of refined sugar in four years

Backward Integration: Dangote Targets 700,000MT of Refined Sugar in Four years
From left: Company Secretary/Legal Adviser, Dangote Sugar Refinery Plc, Temitope Hassan; Group Managing Director/CEO, Dangote Sugar Refinery Plc, Ravindra Singhvi; Executive Director, Dangote Sugar Refinery Plc, Mariya Aliko Dangote; and Chairman, Dangote Sugar Refinery Plc, Aliko Dangote, at the Dangote Sugar Refinery Plc 18th Annual General Meeting, on Tuesday, April 30, 2024 in Lagos.

As Q1 revenue rise by 20.1% to N122.7bn

 Dangote Sugar Refinery Plc (DSR) has unveiled plans to produce 700,000 metric tonnes of refined sugar from locally grown sugarcane in the next four years, through its Backward Integration Programme (BIP).

Chairman of Dangote Sugar Refinery Plc, Aliko Dangote stated this at the company’s 18th Annual General Meeting (AGM) held yesterday in Lagos, just as the Nigerian Exchange released the company’s first-quarter result for 2024, indicating an increase of 20.1 per cent in its revenue to N122.7 billion.

Dangote, at the AGM, said in alignment with the Federal Government of Nigeria’s policy guidelines, DSR continues to focus on and enhance its Backward Integration Project (BIP) by deploying and reviewing project strategies to ensure efficient delivery.

He noted that the 700,000 metric tonnes would meet 50 per cent of the current market demand for refined sugar. According to him, the 10-year sugar development plan to produce 1.5 million MT of sugar per annum from locally grown sugarcane remains a germane roadmap to the attainment of the Company’s objectives.

“Our focus is on achieving the revised targets set for DSR Numan Operations, Dangote Adamawa Sugar Limited, and Nasarawa Sugar Company Limited, while we are hopeful that the Taraba State Government will resolve the community payment issues that have led to the stoppage of activities at the Dangote Taraba Sugar Limited, Lau/Tau project.”

He added that “…During the year under review, despite the challenges we were faced with, the company significantly scaled up investment in the Backward Integration Projects with the ongoing expansion of the DSR Numan factory refining capacity from 3,000TCD to 9,800TCD year-end.

“The factory will be increased with an additional 5,200TCD to 15,000 TCD (tonnes of cane crushed per day) eventually to meet the need in view of the massive land development activities also going on at the site. The aim is to achieve 24,200 hectares in total by the year 2029.”

He also emphasised that despite the adverse impact on the business environment by the continuous increase in the inflationary trend, lack of liquidity and FX to fund the company’s equipment import among others for the backward integration projects, concerted efforts are ongoing to secure the needed funds for the development of the Nasarawa Sugar Company Limited project at Tunga in Awe Local Government Area of the state.

“This will enable the company to put in place the needed infrastructure for the eventual commencement of full-scale production and ensure that the Dangote Sugar Backward Integration ‘Sugar for Nigeria Project’ is achieved. In the end, over $700 million investment would be committed to the Backward Integration Programme,” he added.

Dangote said that the Dangote Sugar (Ghana) Limited, was established as a subsidiary of the Company during the year under review, in line with the plan to expand its presence in the sugar industry across Africa.

On outlook, he stated that “achievement of the goals of the Sugar Backward Integration Master Plan remains our focus. This will go a long way in delivering the anticipated benefits, especially in FX savings and cushioning its impact on our operations amongst other benefits to the company, all stakeholders, and the nation.”

Group Managing Director/CEO of Dangote Sugar, Ravindra Singhvi said, “Despite these challenges, we are resolute and focused on the delivery of our business targets in the medium to long term.”

He pointed out that “as we continue to navigate through the scarcity and high cost of foreign exchange, escalating costs of raw materials amongst others, our focus is to enhance the effectiveness of our supply chain processes, optimise cost, improve our operational efficiencies and delivery on our Sugar for Nigeria backward integration project.”

He said “the target is to produce a minimum of 1.5MT refined sugar annually from locally produced sugarcane at our integrated sugar production estates, which is expected to alleviate some pressure on costs and our demand for foreign currency.

“Achievement of a sustainable business remains one of our key strategies and concerted efforts were made towards sustaining the achievements we have recorded in the past,” Singhvi added.