In a bid to transform Nigeria’s sugar industry and meet the nation’s sweet cravings sustainably, Dangote Sugar Refinery Plc (DSR) has set its sights on an ambitious goal. The production of 700,000 metric tons of refined sugar within the next 4 years through its Backward Integration Programme.
Aliko Dangote, the Chairman of Dangote Sugar Refinery, unveiled this plan at the company’s 18th Annual General Meeting, held in Lagos on Tuesday. The announcement coincided with the release of the company’s Q1 results for 2024. This showcased a significant 20.1 percent increase in revenue, reaching N122.7 billion.
Aligned with the Nigerian government’s policy guidelines, DSR is dedicated to enhancing its Backward Integration Project. By investing in local sugarcane production, the company aims to meet 50 percent of the current market demand for refined sugar.
Alhaji Dangote emphasized the importance of the company’s 10-year sugar development plan. It aims to produce 1.5 million metric tons of sugar annually from locally grown sugarcane. He highlighted ongoing efforts to meet targets at various operational sites. These include DSR Numan Operations, Dangote Adamawa Sugar Limited and Nasarawa Sugar Company Limited. He expressed faith in the Taraba State Government’s ability to resolve the community issues at the Lau/Tau project. This will enable resumption of Dangote Taraba Sugar Limited operations. The Chairman went further to highlight the company’s impressive investments in their Backward Integration Projects.
At the heart of the company’s strategy is the achievement of the Dangote Sugar Backward Integration ‘Sugar for Nigeria Project’. It is the Master Plan of complete focus. Diverse benefits will accrue to the company, its customers, all stakeholders and the entire nation. The company’s total investment in this is expected to surpass $700 million.
Expanding its footprint beyond Nigeria, DSR established a subsidiary, Dangote Sugar (Ghana) Limited. This is in line with its pan-African expansion strategy.
The Group Managing Director/CEO, Ravindra Singhvi, affirmed the company’s determination to achieve its business targets amidst economic uncertainties. Through strategic supply chain optimization and operational efficiency improvements, DSR aims to produce a minimum of 1.5 million metric tons of refined sugar annually. This will be from locally sourced sugarcane. Resulting in reduced operating costs and foreign currency demand.
The company’s commitment to sustainable business practices and its ambitious investment in local sugar production are poised to revolutionize Nigeria’s sugar industry. Benefiting stakeholders and the nation’s economy alike.
Results At A Glance
| Q1 2024 INTERIM RESULTS FOR THE PERIOD ENDING MAR 31 | |||
| 2024 N’000 | 2023 N’000 | % CHANGE | |
| Revenue | 122,727,335 | 102,224,737 | 20.1 |
| Operating Profit | 5,548,431 | 23,160,410 | -76 |
| Profit/(Loss) Before Tax | (106,857,693) | 18,534,189 | -676.5 |
| Taxation | 37,864.284 | (5,730,981) | |
| Profit/Loss After Tax | (68,993,409) | 12,803,208 | -638.9 |
| FY 2023 AUDITED RESULTS FOR THE PERIOD ENDING DEC 31 | |||
| 2023 N’000 | 2022 N’000 | % CHANGE | |
| Revenue | 441,452,953 | 403,245,988 | 9.5 |
| Operating Profit | 72,685,612 | 82,410,307 | -11.8 |
| Profit/(Loss) Before Tax | (108,922,106) | 82,302,820 | -232.3 |
| Taxation | 35,161,798 | (27,560,686) | |
| Profit/Loss After Tax | (73,760,308) | 54,742,134 | -234.7 |
Company Profile
Dangote Sugar Refinery Plc (DSR) is a leading sugar company in Nigeria. It has production and backward integration project operations in 4 States. Its market presence is nationwide.
The refinery was founded in 1999 with an installed capacity of 1.44 million metric tons per annum. DSR was incorporated as a public limited liability company on 4th January 2005. It commenced operation on 1st January 2006. Became quoted on the Nigerian Stock Exchange in March 2007. Its current shareholding is 68% by Dangote Industries Limited and 32% by the Nigerian public.
The company has a market capitalization of over $1 billion. DSR has a strong track record of financial performance. It focuses on operational efficiency and cost management. DSR is well-positioned to drive growth and profitability in the sugar industry.
The company’s entry into the sugar business actually dates back to the 1970s. The focus at the time was the import and sale of sugar by the parent company, Dangote Industries Limited.
Today, DSR is a leading brand that has made considerable impact on the Nigerian sugar industry. The sugar refining facility at Apapa is the largest in Sub-Saharan Africa. The company’s operations span the entire sugar value chain.
Dangote Sugar Refinery Plc is an integrated group of businesses. Its subsidiaries include:
- Nasarawa Sugar Company Limited
- Dangote Taraba Sugar Limited
- Dangote Adamawa Sugar Limited
Backward Integration Programme (BIP): “SUGAR FOR NIGERIA” Project
This is a major strategic initiative of the company. The goal is to produce 1.5-2 million tons of refined sugar every year from locally grown sugarcane within the next 10 years. The land cultivation target is 150,000 hectares of sugarcane plantations across different sites in the country.
This project has moved DSR from a port-based refining facility to a fully integrated sugar production business. Its completion will help Nigeria achieve self-sufficiency in sugar production. It will also create over 100,000 new employment opportunities.
The first phase of the project is at an advanced stage with the rehabilitation and expansion of Dangote Sugar integrated sugar estate at Numan, Adamawa State. It is a 32,000 hectares sugar production estate with an installed production capacity of 50,000 tons of sugar per annum. Acquired in year 2012 as part of the Dangote Sugar Backward Integration strategy. The DSR Numan factory is undergoing an expansion in its tons of (sugar) cane crushed per day (TCD). The factory capacity was upgraded to 3,800TCD and is now being upgraded with an additional 6,000TCD. Total installed factory capacity will be 9,800TCD by year end. The eventual goal being 15,000 TCD. This guarantees the processing of increased sugar cane supply from the ongoing field expansion project. Massive land development activities at the site strive to achieve the cultivation of 24,200 hectares by 2029.
A robust out-grower scheme has been re-introduced at the Numan site. It is one of the industry’s most successful ones. Currently with 660 farmers on 782 hectares of land. DSR aims to replicate this model in communities at other BIP locations. Sustainable community relations and development initiatives are ongoing. This is guided by active consultations and engagements with the local communities.
In addition, acquisition of other integrated sites at other locations close to suitable land with good irrigation and key markets have begun. This includes Nasarawa Sugar Company Limited, located at Tunga in Awe Local Government Area of the State. It is a 68,000 hectare, Greenfield Sugar Production Project. On completion, it will have a total of 21,000 hectares under cultivation, 2,000,000 tons cane production and 210,000 tons sugar production. It will also create over 10,000 employment opportunities. Arrangements are underway to secure funding for the project. A globally renowned sugar equipment supplier has been contracted. The best plant technology for sugar and ethanol production, as well as power generation is to be installed.
Infrastructure development activities are ongoing at the site. Plans are underway for the 6,000 hectares commercial planting to feed the 12,000TCD factory for the project. Factory designs have been completed. The bulk water supply and irrigation designs are ready for execution.
Dangote Sugar Refinery Plc, is an integral part of the Federal Government of Nigeria’s National Sugar Development Master Plan. It is committed to becoming an integrated sugar business, serving local and export markets from integrated sugarcane plantations and factories across Nigeria. Despite challenges such as inflation, liquidity issues and foreign exchange constraints, DSR remains committed to securing funds for its projects. The ultimate aim is the commencement of full-scale production across all company projects.
Wrapping Things Up
I hope you’ve gained some insight into the aspirations for our nation’s sugar industry. I believe I’ll touch on the National Sugar Master Plan in a future post. Or sugar refining. Or other industry trends, who knows? It’s unlikely that it’s the last post you’ll see from me on sugar. Till then, stay sweet. 🙂
