Dangote Sugar grows sales volume, up dividend payout to shareholders

Nigeria’s largest sugar producer, Dangote Sugar Refinery has recorded an increased in its sales figure for the year ended December 31, 2015, resulting in 11 per cent increase in its turnover. It also increased its dividend payout to its shareholders to 50 kobo per share as against the 40 kobo paid in the preceding year.

The company also recorded an increase of eight per cent on its profit before tax (PBT) to N16.55 billion for the full year ended December 31, 2015 as against N15.27 billion at the preceding year.

According to the financial report released on the floor of the Nigerian Stock Exchange (NSE), the sugar group revenue went up by seven percent to ₦101.06 billion compared to N94.86 billion in 2014.

Gross profit increased by 11 percent to ₦20.73 billion, while Profit after tax stood at N11.54 billion.

Commenting on the result, acting Group Managing Director Abdullahi Sule said: “2015 ended with remarkable volume pickup in the fourth quarter as our strategy to reduce margins in September by 28 per cent and the addition of 100 trucks to our fleet improved delivery to customers. As a result we gained market share from competition and smugglers. I am glad that we were able to grow our revenue by 11 per cent and improve sales volumes compared to 2014 despite the current macro-economic challenges which we face in Nigeria, with an especially difficult first and second quarter.

To improve efficiency, we have redeveloped our sequencing strategy to self-sufficiency through the production of refined sugar from cane and remain zealous in our efforts to execute the “Sugar for Nigeria” project, which will replace our current production in the next 4-5 years as we execute the first phase of our backward integration plans, which now includes the Savannah rehabilitation, Guyuk and Zaria projects.”

Dangote Sugar is Nigeria’s largest producer of household and commercial sugar with 1.44 million tonnes of refining capacity, with the ability to supply most of the country through an extensive network of distributors.

The refinery at Apapa imports raw sugar from Brazil and refines it into white, Vitamin A fortified sugar suitable for household and industrial uses. Savannah Sugar factory located near Numan, in Adamawa State has an installed capacity of 50,000 tonnes of sugar. Covering 32,000 hectares in extent, the Savannah estate has considerable opportunity for expansion which is underway.

Dangote Sugar has the strategy is to become a global force in sugar production, working within Nigeria’s National Sugar Master Plan to end importation and produce 1.5 million metric tonnes of sugar from cane to sell in Nigeria and neighbouring countries.

As part of this plan the Sugar Refinery acquired Savannah Sugar in December 2012 and is currently improving its farm acreage and upgrading the factory. It intends to augment Savannah’s 32,000 hectares in Adamawa state by acquiring and planting a further 150,000 hectares across Nigeria, supporting the new plantations with modern production facilities that are located closer to the consumer.

It would be recalled that Dangote Sugar Refinery recently obtained the Food Safety Systems (FSSC 22000) Certification).

The certification which is a standard fully recognized by the Global Food Safety Initiative (GFSI) comes on the heels of other standards already obtained by the refinery which include ISO 9001:2008, ISO 22000:2005 and ISO OHSAS 18001:2007.

The recommendation for DSR’s FSSC 22000 certification was given in November 2015, after series of painstaking processes, followed by internal and surveillance audits conducted by the SGS, a world leading Food Safety certification and standards organisation.