NIGERIA – Dangote Sugar Refinery Plc, Nigeria’s largest sugar producer, has reported its first annual loss in over a decade, attributing the setback to the devaluation of the naira and the subsequent increase in finance and input costs.  

The company recorded an after-tax loss of US$47.7 million for 2023, a total contrast to the US$34.28 million profit the previous year, as outlined in a regulatory filing on Monday. 

Despite a 9.5 percent increase in revenue to US$267.68 million, Dangote Sugar faced challenges similar to other Nigerian companies, including Nestle Nigeria, Guinness Nigeria, and Nigeria Breweries, all grappling with losses due to the country’s ongoing currency crisis. 

Dangote Sugar cited difficulties in sourcing foreign currencies as a major impediment to its operations, leading to a substantial rise in financing costs, which soared to over US$132.8 million compared to less than US$6.6 million a year earlier.  

The company also reported significant increases in selling costs, administrative expenses, and taxes, culminating in an overall expense bill exceeding US$399 million. 

Ravindra Singhvi, CEO of Dangote Sugar, acknowledged the challenging outlook, stating, “The outlook remains challenging as we navigate through the scarcity of foreign exchange and escalating costs of raw materials.”  

He outlined the company’s focus on enhancing supply chain management processes to reduce costs and improve overall efficiency.  

Singhvi also highlighted the long-term strategy of the backward integration project, aiming to produce 1.5MT of refined sugar annually from locally grown sugarcane to alleviate cost pressures and reduce reliance on foreign currency. 

Singhvi affirmed the company’s commitment to sustainable growth despite macroeconomic challenges, stating, “Our dedication to seize opportunities for sustainable growth remains unwavering, notwithstanding the challenges presented by the macroeconomic environment.” 

Dangote Sugar is actively working on refining operations in Numan, Adamawa State, and developing greenfield sites, aligning with the National Sugar Master Plan’s objective of achieving self-sufficiency in sugar production.  

The ongoing refinery upgrade in Numan is expected to generate 32 megawatts of electricity, showcasing the company’s commitment to innovation and diversification by producing ethanol and animal feed from by-products like molasses and bagasse. 

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