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To consolidate its earnings and position in the sugar industry, Dangote Sugar Refinery Plc has concluded plans to intensify its refined sugar from locally grown sugarcane. The move will aid self-sufficiency in sugar production and eliminate reliance on foreign exchange, as well as the current volatility of raw sugar import prices.
According to the firm, the 2016 financial year saw global sugar prices increase to the highest level operators ever witnessed in the past four years.Indeed, the elevated prices were due to reduced planting in Brazil, global warming resulting in drier than normal weather conditions in Brazil and India, the two largest sugarcane producing countries.
Also, contribution to the challenges was the strengthening of the Brazilian Real against the U.S. dollar, which resulted in Brazilian farmers holding their sugar stocks rather than selling, causing a temporary supply shortage.
Announcing its plans for the 2017 financial year, the sugar refining firm noted that it has already begun to pick up market share from competitors and smugglers, even as it increased its fleet to meet customers’ orders timely.
A review of activities during the 2016 financial year showed that the firm’s seasonal sugar production at savannah peaked at 17,122 tonnes as against 6,610 tonnes in 2015, while its full year refinery production at Apapa stood at 791,800 tonnes from 740,350 tonnes recorded in the previous year.
Also, the Group’s sugar sales volume was 778,518 tonnes last year compared to 782,000 tonnes in 2015.Financial highlights showed that the Group’s revenue was up by 68 per cent at N 169.72 billion from N101.06 bn, while a profit after tax of N14.4 billion was recorded as against N11.14bn in 2015.
Acting Group Managing Director, Abdullahi Sule, said: “We are very pleased with the results for the period under review, our revenue grew by 68 per cent and improve sales volume compared to 2015 despite the current macro-economic challenges.
“Our focus in the current year and for the future remains leveraging our strengths to maximize every opportunity to generate sales, increase our market share and create sustainable value for our stakeholders.
“Concerted efforts are being made towards the actualization of our BIPs plan. The implementation strategy has changed and the full focus is now on the expansion of the Savannah Sugar Estate to its full potentials, and development of the new site at Tunga in Nasarawa State.
“We are hopeful that the naira will continue to strengthen against the US dollar to help eliminate the current challenges we are faced with in sourcing foreign exchange to fund our raw material import and equipment requirement for the backward integration projects”.