Dangote Sugar Plc, a subsidiary of Africa’s richest man Aliko Dangote’s Dangote Group, is aiming to eliminate sugar imports from Nigeria within the next four years. The ambitious plan, unveiled at the company’s 18th AGM, hinges on a shift toward backward integration.
“In the next four years maximum, our company should be producing what we are selling currently all domestically,” Dangote declared, emphasizing the national backward integration policy’s importance. This policy seeks to create a self-sufficient domestic sugar industry by incentivizing local production.
Dangote highlighted the policy’s potential to mitigate foreign exchange losses, a significant challenge for the company in 2023. Dangote Sugar recorded around N201 billion ($143.38 million) in realized and unrealized FX revaluation losses for the full year 2023.
Dangote targets 700,000 tonnes sugar output
The company’s self-sufficiency target stands at 700,000 tonnes of sugar production, achievable through increased cultivation in Nasarawa and Numan. Any future imports would supplement this burgeoning domestic output. This move aligns with Dangote Sugar’s broader goals of bolstering Nigeria’s agricultural self-reliance and reducing its dependence on foreign imports.
Dangote also addressed the stalled merger between Dangote Sugar and its subsidiaries Nascon and Dangote Rice Ltd. The Securities and Exchange Commission (SEC) suspended the merger due to delays in operationalizing the rice factory.
However, Dangote assured shareholders that the commissioning of the Jigawa rice facility, boasting a 1-million-tonne processing capacity (representing 34 percent of national processing capacity), is imminent.
Dangote Sugar Refinery: A leading producer
Dangote Sugar Refinery, a subsidiary of Dangote Group, is a Nigeria-based diversified industrial conglomerate with holdings in cement, fertilizer, sugar refining, and petrochemicals. The leading sugar company boasts a refining capacity of 1.44 million metric tonnes, making it Nigeria’s largest household and commercial sugar producer.
Aliko Dangote, Africa’s richest man with a net worth of $15.3 billion (Bloomberg Billionaires Index), owns 72.7 percent of Dangote Sugar Refinery. The market value of Dangote’s stake is currently estimated at $268 million.
Financial impact of naira devaluation
The recent devaluation of the naira has continued to impact Dangote Sugar financially in 2024. The company reported a first-quarter loss of N68.99 billion ($49.6 million), a significant reversal from the N12.8-billion ($9.2 million) profit recorded in the same period last year.
However, a 20-percent year-over-year revenue increase from N102.22 billion ($73.4 million) to N122.73 billion ($88.17 million) demonstrates the company’s resilience in a dynamic market.
