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As in cement, Dangote begins journey for backward integration in Sugar production

Leading indigenous investor in sugar production, Dangote Sugar Refinery (DSR) Plc has unveiled plans to drive backward integration in production of sugar over a 10 year delivery plan.

The scheme is expected to gulp about N106 billion and about 20 per cent of the fund would be raised through equity.

Part of the new deal is to generate not less than 100,000 jobs and 1.5 million metric tonnes of locally refined sugar within the span of the master plan for self-sufficiency in sugar production in Nigeria.

In Cement backward integration which started and got completed during the life and time of last administration delivered the integration in a record six years as today, Nigeria is no more importing cement, but exporting to neighbouring countries.

Today, in Nigeria, whereas the nation needs a yearly average of 25mmt of cement, total production capacity of all cement plants Dangote cement and others put together are in the excess of 40mmt.

Explaining more, the Acting Group Managing Director of the company, Abdullahi Sule, said the first phase, which runs through a five year period, would involve the selection and development of five areas in the country which include a 32 hectares of land in savannah, Adamawa state, Taraba, Jigawa, kogi, and Kebbi state, while the second phase also involved the expansion of savanna and rehabilitation of Guyuk Greenfield in Adamawa state.

In his remarks before stockbrokers during the Facts Behind the Figures of the company at the floor of the Nigerian Stock Exchange (NSE) in Lagos recently, Sule noted that aside job creation, the 10- year master plan, when completed, would boost backward integration, discourage the importation of sugar and increase the nation’s revenue base through exportation of other products from cane extracts.

According to him, “Out of the 1.7 metric tonnes government, we decided to do 1.5 metric tonnes , instead of importing raw sugar from brazil, and refining them here, we go to various sites in Nigeria, already identified by agency of government of Nigeria in order for us to produce these sugar here in Nigeria from cane like other countries have done so that the challenges we are having with gas will not be there, the challenges with foreign exchange will not be there and it would create job opportunities and produce ethanol.

“For the 1.5 metric tonnes that we agreed to do out of 1.7, we decided to select five sites one of the site is the savanna 32 hectare of land in Adamawa, another site is in Taraba, we look at other site in Jigawa and kogi, Kebbi and decided that on these sites, we should produce 1.5 metric tonnes of sugar we will 150,000 hectares for cultivation per an nun. From these areas, we can generate 130 million ethanol, power, employment and animal feeds.”

“Dangote sugar remains a zero debt company. In the first 3 years of the project, we would spend about N106 billion and the board members have decided that 20per cent would be raised through equity and by the end of this year, we will be able to fund the N20 billion but it is taking us time to decide whether it is through extra ordinary general meeting or through loan. The company is still in a position to borrow and still pay dividend” Sule said.

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