- Dangote Sugar Targets Increased Shareholder Value
Dangote Sugar Refining Plc has expressed its resolve to soar higher and create more value for stakeholders despite economic challenges.
The Chairman, Dangote Sugar Refinery, Aliko Dangote, said the company posted a profit before tax of N34.6bn with a turnover of N150.4bn for the 2018 financial year.
He told the shareholders at the company’s Annual General Meeting on Tuesday in Lagos that Dangote Sugar was able to weather through the economic downturn in 2018 because it pursued its backward integration plan aggressively by focusing on issues that had been bogging down the plan and subsequently adjusting the timelines.
“2018 was quite a challenging year for the company with several negative activities, which include influx of smuggled sugar into the key markets nationwide coupled with the Apapa traffic gridlock, which continue to affect evacuation of products from the refinery,” Dangote said.
He explained that prior to the traffic gridlock at Apapa, the company could move up to between 60 and 70 trucks out of the refinery daily but that since the problem started, it could hardly move up to 20 trucks out of the refinery.
Dangote said the company had to revise its backward integration timeline to mitigate against unforeseen challenges, adding that the first phase of the plan included the rehabilitation and expansion of the Savanna Sugar, the Lau/Tau project in Taraba state and the Tunga sugar project in Nasarawa State.
According to him, Savanna Sugar remains the only company producing sugar from sugarcane grown in the country and has just ended its 2018/2019 crop season.
“Rehabilitation of the land and its infrastructure for improved yield and output is still ongoing,” he said.
Dangote disclosed that the first-phase expansion of the Savanna Sugar capacity from the current 3,000 tons of cane per day to 3,500TCD had been completed.
He added that the subsequent increase of production capacity to 6,000TCD had commenced and was expected to be completed by 2020 “as well as the installation of the new 12,000TCD factory that will be fed with the increased cane supply.”
Shareholders at the AGM commended the company’s board and management for the continued payment of dividend.
The National Coordinator, Pragmatic Shareholders Association of Nigeria, Mrs Bisi Bukar, said while many quoted companies continued to struggle with the payment of dividends, Dangote Sugar Refinery had been consistent in taking care of shareholders.
According to her, investors are always happy when they receive returns on their investments both as dividend and share price growth on the Nigerian Stock Exchange.
The founder, Independent Shareholders Association of Nigeria, Sir Sunny Nwosu, decried the negative impact of Apapa Wharf traffic situation on the performance of companies as they struggled to move finished goods and raw materials to distributors and warehouses.