Dangote, Flour Mills, McNichols expand packaged sugar operations

NIGERIA – Dangote Sugar Refinery, Flour Mills of Nigeria plc and McNichols Consolidated plc are vigorously expanding their packaged sugar manufacturing facilities in Nigeria to meet growing product demand and ensure that the country’s dream of ending unbridled import from Brazil ends sooner than expected.

Lucke Sugar and Dogan Sugar are also aggressively expanding to tap into enormous opportunities in the industry, Latif Busari, executive secretary, National Sugar Development Council(NSDC), has said.

McNichols Consolidated plc, located at Ibafo, Ogun State; Lucke Sugar at Lekki-Epe, Lagos State, and Dogan Sugar at Amuwo-Odofin, Lagos, are investing in new cubing, Vitamin A fortification and packaging lines.

Similarly, Flour Mills subsidiary, Golden Sugar Company, located at Apapa, Lagos, has installed advanced cubing and packaging lines, while Dangote Sugar Refinery is now producing granulated sugar in retail packs for home use, Busari disclosed during a two-day media workshop titled, ‘Building a Greater Nation through Sustained Transformation’ held in Abuja.

“We have established sugarcane biofactories,” Busari said.

“We partnered with IAR in Zaria to set up a bio factory with one million seedlings capacity. This will be commissioned in December, 2014.With University of Ilorin, we have another bio factory with one million seedlings capacity,” he added.

Busari said Biocrops Nigeria Limited, Abuja, a private company, has established a similar facility  for cane seed multiplication and has already found its market at sugar estates.

One recent entrant that has buoyed Nigeria’s sugar industry is Flour Mills’ Golden Sugar Company. The company is investing $300 million at Sunti, Niger State, and has planted 850 hectares of sugarcane, according to Busari.

Data have shown that the company has already cleared 4000 hectares of land for sugarcane plantation, while completing power projects for its phases I and II processes. Already 50 percent of cane yard and truck park have been completed, just as steel construction is 75 percent completed.

“Apart from the 12,500ha Sunti BIP project which is rated the fastest growing among ongoing projects, Golden Sugar Refinery is also exploring new sites in Kogi and Niger for bigger sugar projects,” Busari further said.

Dangote Sugar has already acquired large hectares of land in six states of the country for sugar production. In Bali (Mayokam), Taraba State, the company has 50,000 hectares, while it has 30,000 hectares at Hadejia, Jigawa State is.

The firm has also acquired 50,000 hectares in Kebbi State, 25,000 in Kogi State, 38,000 at Numan/Guyuk, Adamawa State, and 50,000 in Kpata, Kwara State. Dangote Sugar Refinery has also acquired $35 million new farm machinery and equipment for land development.

Over $2. 570 billion worth of investments have been made in Nigeria’s sugar industry, while  product  demand has sharply risen from 1.5 million metric tonnes in 2012 to 2 million metric tonnes(MT) as at the end of 2013.

The backward integration policy (BIP) of the Federal Government has attracted a number of investors into the once neglected sugar industry. Sugar is one way of diversifying Nigeria’s economy, which has become essentially dependent on oil over the years.

Economic diversification through manufacturing has become most critical now than ever as government’s revenue, 85 percent of which comes from oil, continues to nosedive.  Bonny light crude, which traded at $110.2 per barrel in January this year, reaching US$114.6 per barrel by June, slumped last week to about $83 per barrel, implying that the country is on for tough times.

The Lagos Chamber of Commerce and Industry (LCCI) has consistently called on the Federal Government to initiate policies that will drive manufacturing and make it play its proper role amid current economic vagaries.

Remi Bello, president, LCCI, believes that propelling manufacturing would need removal of age-long gridlocks such as unfair competition, port inhibitions, double-digit charges on real sector borrowers, multiplication of taxes and rates as well as continuous harassment of manufacturers by government agencies whose roles are mere duplications.

Other stakeholders say the Federal Government must not only concentrate on three out of 77 manufacturing sub-sectors, but must drive the other 74 industries with policies and incentives that will stimulate economic activities across the real sector.

November 18, 2014; http://businessdayonline.com/2014/11/dangote-flour-mills-mcnichols-expand-packaged-sugar-operations/#.VGrQwmejKVo

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