NIGERIA – Nigeria’s largest sugar refinery, Dangote Sugar Refinery Plc (DSR), has hit a revenue milestone of 400 billion naira (US$875 million) in the full year 2022, a 48% growth compared to 276 billion naira (US$599 million) in the previous year.
The net profit jumped 148% to 54.7 billion naira (US$119 million) at the end of its 2022 financial year, which ended on December 31. The figure is more than double the amount of 22 billion naira (US$48 million) recorded in 2021.
According to the company, the upswing was on the back of a strong increase in demand for sugar, mainly from refined sugar packaged in 50 kg bags.
Great control of operational costs and distribution activity expenses, which dropped from US$1.96 million in 2021 to US$1.61 million in 2021, also had an impact on the strong performance of DSR. Its administrative costs were also contained, dropping from US$23.1 million to US$22.4 million.
Overall, strong revenue growth helped offset tax increases, which more than doubled from a year ago to 22 billion naira (US$59 million) and 38% of the cost of sales.
In the financial report, DSR said it is significantly scaling up its investment in the sugar sub-sector in line with the requirement of the Nigeria Sugar Master Plan (NSMP).
Aliko Dangote, president of the Dangote Group, had previously noted that increasing the sugar refining capacity would require a corresponding increase in sugarcane production capacity.
With that, Dangote stated that the company had concluded plans to increase its sugar plantation from the current land area under cane production of about 8,700 hectares in 2022 to around 24,200 hectares within the next seven years.
He also said the company would commit over US$700 million to its investment in the Backward Integration Programme to enable it to put in place the needed infrastructure for the eventual commencement of full-scale production.
The refinery has also extended its mills to Nasarawa State, in 68,000 hectares of land, after an investment of $700 million.
The integrated sugar complex to be located in Tunga has two sugar factories with the capacity to produce 430,000tpa of refined white sugar, representing about 30 percent of the country’s consumption and would be the largest plant in Nigeria.
Nevertheless, the Dangote Sugar Refinery in Tunga is also expected to generate about 90 megawatts of power annually, as disclosed by Governor Abdullahi Sule at a sugar sensitization workshop organised by the National Sugar Development Council in Lafia.
Dangote highlighted that Dangote Sugar will change the trajectory by making Nigeria self-sufficient in the sector, adding that the company had already spent billions of naira in developing infrastructural facilities for host communities.
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