Dangote Sugar embarks on expansion plan to drive growth in the sector

NIGERIA – Dangote Sugar Refining Plc said that it has embarked on expanding its Savanna Sugar processing plant as it seeks to double the production capacity.

Speaking during the company’s annual general meeting, the chairman of Dangote Sugar Refinery, Aliko Dangote, disclosed that the first phase of the Savanna Sugar expansion from the current 3,000 tons of cane per day (tcd) to 3,500 tcd has been completed.

He added that the subsequent increase of production capacity to 6000tcd has commenced and is expected to be completed by 2020 followed by the installation of the new 12,000tcd factory that will be fed with the increased cane supply.

Dangote also noted that the company has also resolved to revise its backward integration timeline which will include rehabilitation and expansion of the Savanna Sugar, the Lau/Tau project in Taraba State and the Tunga sugar project in Nasarawa State as the first phase of the plan.

He said that the plan aims to improve improved yield and output adding that at Tunga, activities are underway at the 68,000 hectares sugar projects site.

“Activities ongoing at the project site include the establishment of the cane seed nursery, housing and other basic infrastructure with the project currently employing 325 staff with potential for increase towards the fourth quarter of the year,” he said.

Despite a challenging operating environment, Dangote Sugar posted a profit before tax of US$95.94 million (N34.6bn) with a turnover of US$417.01 million (N150.4bn) for the 2018 financial year.

Dangote said that the company’s its backward integration plan enabled the firm to weather through the economic downturn in 2018 by focusing on issues that had been bogging down the plan and subsequently adjusting the timelines.

“2018 was quite a challenging year for the company with several negative activities, which include influx of smuggled sugar into the key markets nationwide coupled with the Apapa traffic gridlock, which continue to affect evacuation of products from the refinery,” Dangote said.

Looking ahead, Dangote said that despite the challenges, the company was committed to the medium and long-term goals of the project by investing and growing the business efficiently even with the cost optimisation efficiency project on-going in the Apapa refinery.

With a current 70% capacity utilisation of the 1.44m metric tonnes processing capacity, the company is implementing various initiatives and projects toward continuous improvement in operations targeted at sustaining its leadership position in the Nigerian sugar industry.

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