Efforts are being made by Dangote Sugar
Refinery (DSR) Plc to ensure self-sufficiency in sugar production in the
country within the next four years.
Over the last year, Dangote Sugar has
stepped up its opening of processing factories and assistance to farmers
in a bid to dramatically increase output.
Nigeria is one of the world’s largest
net importers of sugar, consuming significant amount of foreign
exchange. Between 1955, Nigeria consumption rose from 43,000 tones to
about 45,000 tones in 1974; by 1982 it rose to about 1MT/PA. Today
Consumption in Nigeria is between 1.5 to 1.7MT/PA.
Global consumption is 24kg per capita.
Africa 16.8kg, Asia 17.3 kg, America 43.8kg and Europe 36.7kg per capita
respectively. Nigeria is around 7 to 9kg. The Nigerian Sugar
Development Council (NSDC) was established as the government agency
responsible for formulating sugar policies and strategies.
NSDC focused towards promoting private
sector-led development. Government-owned sugar estates were privatized
in 2005. Investment in local sugar production is hampered by the huge
funds required to establish a sugar estate as well as the lack of
long-term loans for investment purposes in the country. However, the
management of these estates improved under privatization, which also
mostly accounted for the marginal increase recorded in sugar production.
Sugar use in industrial activities such
as manufacturing soft drinks, pharmaceuticals, biscuits, other beverages
and confectionery products is also rising steadily despite higher
international prices, and there is no competing High-Fructose Corn Syrup
(HFCS) in the market. Demand for direct household consumption also
remains strong. More that 90 percent of Nigeria’s sugar needs are met by
import of raw sugar, shipped mostly from Brazil, which is then refined
by the local domestic sugar industry. The bulk of the available refined
sugar supply is also exported from Brazil.
It would be recalled that the Nigerian
Sugar Master Plan (NSMP) was introduced in 2012, as the roadmap to
national sugar sufficiency, which was designed to increase local sugar
production, attain self-sufficiency, reduce dependence on importation as
well as create job opportunities and increase prospects of contributing
to the production of ethanol in 2020. Currently, more than 90 percent
of all sugar consumed in Nigeria is imported raw, mostly from Brazil,
and refined by domestic sugar refineries.
DSR is one of the top five Sugar
Refineries in the world, with 1.44MT/PA capacity at a location and has
begun its backward integration project with a 10-year sugar development
plan, to produce 1.5 million metric tonnes per annum (MT/PA) of sugar
from locally grown sugarcane. The project commenced with its acquisition
of Savannah Sugar Company Limited (SSCL) at Numan, in Adamawa State and
other Green Project sites across Nigeria.
Apart from the rehabilitation of
Savannah Sugar’s plantation and factory infrastructure, the company’s
growth strategy to farm more than 150,000 hectares of planted sugarcane
by 2023 includes the creation of integrated plantation and refinery
facilities at the following locations; Lau/Tau, Taraba State; Hadejia,
Jigawa State; Zaria Kalakala, Kebbi State and Kpada, Kwara/Kogi States.
This phase also includes the
rehabilitation and expansion of Savannah Sugar’s estate, which will be
used as a model for the other locations.
A report by the US Department of
Agriculture (USDA) notes that to date, Dangote Sugar Refining is the
only company to have developed a sugar estate and expanding its raw
sugar production capacity.
It noted that Dangote acquired 95 per
cent equity stake in Savanna Sugar Company (SSC) showed its commitment
to becoming a fully integrated sugar company via its backward
integration strategy. According to USDA, Dangote Sugar will be the
company with the largest competitive advantage.
Recently during the visit of the
National Assembly, Committee On Industry, Trade & Investment to the
company, the lawmakers commended the management of Dangote Sugar
Refinery on its remarkable progress towards ensuring the success of the
sugar backward integration project.
The committee chairman, Honorable
Abubakar Moriki who led the team expressed satisfaction at the level of
the backward integration programme the company has been able to achieve.
He also assured the company of friendly
policy formulation especially in land acquisition which is geared
towards self-sufficiency of sugar in 2020. He said: “We are aware that
for a sugar business to succeed there has to be substantial mass land
acquisition for the sugar cane to be planted. We will look at these
challenges and others affecting the industry.”
‘‘We have the responsibility as the
members of the House of Assembly Committee on Industry to oversee the
Federal Ministry of industry, Trade and Investment and alongside the
agencies, which the National Sugar Development Council is one of them,
being the regulatory agency charged with the responsibility of
monitoring the implementation of national sugar policy globally and to
come out with all implementation strategies to make us realized sugar
self-sufficiency after certain period of time.
“We are here to see what extent has the
policy of National Sugar impacted on you as a player in the industry and
whether there are some amendments to make the implementation smoother
and faster. We have visited the production site at the Savannah Sugar
Company, Numan, Adamawa State, which is a typical backward integration
starting point where we saw how the sugar canes were being produced, the
collaboration you have with the host community in terms of the Out
Growers Scheme and job creation.”
“We are happy at the development seen in
Numan, which portrays a successful privatization. The company was sold
to Dangote in 2003, it was sold as a moribund company but during our
visit to the company, we found out it was back on its feet with about
12,000 hectare of land put into cultivation of sugar cane.”
He also urged the management of the
Dangote Sugar Refinery to ensure maximal capacity utilization as much as
possible to be able to refine sugar here for the mean time and to be
able to have mechanism to produce sugar also in the factory.
The group managing director of Dangote
Sugar Refinery, Abdullahi Sule said Nigeria is one of the world’s
largest net importers of sugar, consuming significant amount of foreign
exchange.
He noted that Dangote Sugar Master Plan
was to ensure five large sugar factories, 150,000 Ha of land under
cultivation, 1.5 to 2.0 million MT/PA of refined sugar from locally
grown sugarcane per annual and to generate over 100,000 jobs among
others.
He pointed out that Dangote Industries
Limited acquired Savannah Sugar in 2003 and Dangote Sugar being a
subsidiary of Dangote Industries acquired 95 per cent stake in Savannah
Sugar in December 2012, and have invested over N33.05 billion.
He added that at the end of the
rehabilitation exercise, Savannah Sugar will increase its sugar
production to 260,000 MT per annual of refined sugar from 26,500ha
cultivated land, at 12,000TCD daily, 190 days crop length, increase
factory from 3,000TCD to 6,000TCD and install a 12000TCD diffuser
factory, employ about 15,000 direct and indirect (seasonal) employees,
produce 10MW power for export during crop, 18,000,000 liter per annum
fuel ethanol and 10,000 MT per annum Animal feed from the by-products.
Sule however said that some of the
challenges facing the industry are government policies, lack of
infrastructures, stringent financing, huge investment, lack of forex
among others.
Also, the director of Stakeholder
Management and Corporate Communications of Dangote Industries, Mr.
Mansur Ahmed said that the company was committed to the backward
integration commitment it signed with the Federal Government, saying the
Savannah Sugar Company acquired by the company in Numan, Adamawa, had
started producing and plans were on for expansion.
He said that the current economic
challenges in the country notwithstanding, the company is poised to
remain a leader in the sector.
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