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Sunti Golden Sugar Estate: How a N60bn investment is helping Nigeria with its sugar plan

Located on the banks of River Niger, in Mokwa, Niger State is the Sunti Golden Sugar Estate (SGSE) a 17,000 hectares of arable farmland and a Sugar mill with a capacity to process 4,500 metric tons of sugarcane per day, and potentially up to 1 million tons of cane per season.

Muhammadu Buhari Commissions Sunti Golden Sugar Estate

The sugar estate is owned by the Golden Sugar Company, a subsidiary of Flour Mills of Nigeria (FMN) Plc and was commissioned by President Muhammadu Buhari in 2018, as part of efforts by the government and private sector
to encourage self-reliance in food production and local sourcing of raw materials.

Fmn principal business activities

Flour Mills of Nigeria was established in 1960, from a single Flour Mill in the port of Apapa. Today, the company is a publicly-traded, vertically integrated supply chain of food, agro-allied and logistics and support businesses.

Having pioneered flour milling in Nigeria with its 500 metric tonnes per day wheat mill commissioned at Apapa in 1962, the business has now diversified into foods, agro-allied, logistics & support, and sugar.

The FMN Group’s mantra, “Feeding the Nation, every day,” is at the heart of the company’s strategic decisions on what they produce, how and where factories are set up, the level of care that is put into products, and how they interact with host communities and the wider environment.

Nigeria’s journey towards self-sufficiency in sugar production

The Nigerian Sugar Development Council, NSDC estimates that imported sugar accounted for 97 percent of the total sugar supply in the decade before 2012. Specifically, Nigeria between 2002and 2005 heavily relied on foreign sources for 11.3 million metric tons of sugar which cost up to $3.4 billion and an estimated 4,000 local jobs for the skilled and semi-skilled labour force in that period.

Date from the Nigerian Customs Service (NCS) estimates that N30 billion every year has been spent on sugar importation over the last decade.

The need to revamp the stagnant domestic sugar industry and ensure food security whilst building a good foundation for local manufacturing sector, saving the nation scarce forex, contributing to the availability of jobs and
economic growth informed the creation of the Nigerian Sugar Master Plan (NSMP) which was approved by the Federal Executive Council in September of 2012 and the implementation of which commenced in January 2013.

In other words, the sugar master plan served to raise local production of sugar to attain self-sufficiency; To stem the
tide of unbridled importation; To create a huge number of job opportunities, and to contribute to the production of ethanol and generation of electricity.

Given Nigeria’s then 167 million (now about 200 million)market, the NSMP is expected to attract over $1billion private investment both local and foreign and create over 107,000 direct jobs locally at the initial stage in10 years, with the possibility of increasing exports to West African neighbours.

To stimulate and protect the local investment in the sugar sub-sector, plans for a new fiscal tariff was approved to take effect from 1 January 2013. The plans showed a systematic increase in duty and levy on raw sugar and refined sugar from 2012 to 2020.

A 2018 sugar report by USDA Foreign Agricultural Service shows a five-year tax holiday for investors in the Nigerian sugar value chain, 10 percent import duty and 50 percent levy on imported raw sugar, 20 percent duty
and 60 percent levy for imported refined sugar.

Fmn’s backward integration in sugar
It was on the back of efforts towards backward integration that Flour Mills of Nigeria, a publicly traded, vertically integrated supply chain of food, agro-allied and logistics and support businesses, invested N50 billion in the Mokwa sugar facility-an investment which is now up to N63 million, arguably the largest investment of its kind in Nigeria till date.

Not new to investment in agriculture, in the last ten years, FMNhas invested more than N150 billion to execute its core business strategy to aid the agricultural sector through backward integration and support the Nigerian Government’s goal of attaining food-sufficiency.

At the official take-off of the National Sugar Master Plan (NSMP), three refineries; Dangote Sugar Refinery, BUA Sugar Refinery and the Golden Sugar Company, which was commissioned in June 2013, were approved as BIP operators and made to sign up to commitments through which their performance in regard to the FG’s Sugar BIP was to be measured.

At the end of the first phase of the NSMP covering 2013 to 2016, the overall performance of the three
sugar refineries were as follows:

• Golden Sugar Company (FMN)
58%

• Dangote Sugar Refineries (DSR)
46%

• BUA Sugar Refineries 17%

The Golden Sugar Company with a production capacity of 750,000 tonnes of sugar, is one of the largest facilities in Africa delighting individuals and businesses with premium white sugar.

The Sunti Golden Sugar Estates, Golden Sugar Company’s investments in the sugar ecosystem, has since commissioning made a positive impact on the sugar industry, accentuating the efforts that FMN has made to
align with Nigeria’s sugar master plan and position itself as an important pillar in Nigeria’sbackward integration plan for the agricultural sector.

Assessment of impact a year after

To ensure the success of the NSMP, there was a need for Agencies to monitor and evaluate how the activities and outputs are effectively implemented in meeting expected outcomes, indicators and annual key performance
indicators.

The implementation phase of the NSMP (which for effective evaluation covers a four-year period) is subjected to three evaluations, which are End-of-year Annual Evaluation; MidTerm Evaluation; and End-Term Evaluation.

The plan was to involve several agencies at different levels to guarantee performance. The agencies include the Federal Ministry of Trade and Investment (FM &TI), the Federal Ministry of Agriculture and Rural Development (FMA& RD), the National Planning Commission (NPC), various committees of the National Assembly on oversight
functions, and the National Sugar Development Council (NSDC).

The National Sugar Development Council is in charge of performance evaluation of the backward integration plans for the three big players (Dangote, FMN and BUA ), as it concerns the goals of the Nigerian sugar master plan.

The National Sugar Council works with Sugar industry Monitoring group (SIMOG)- A peer review mechanism comprising of  Dangote, FMN, and BUA, and the Sugar Roadmap Implementation Committee (SURMIC) – Customs, Ministry of Agric, Trade and Investment, Finance etc. Performance evaluation criteria, in essence, are based on:

•  How much land is available to grow and harvest sugarcane

• Land Development – building irrigation, dykes etc

• How much investment is put into mill processing

• How much infrastructure is built (community development)

• How many jobs are being created

• How much sugar is being produced

Available land for growing and harvesting sugarcane

The Sunti Sugar Estate has 17,000 hectares of arable farmland, a sugar mill with a capacity to process 4,500 metric tonnes of sugarcane daily. The production facility area is 15,100 hectares, with a cane area that features a maximum output of 10, 000 hectares (ha). As at today, 300 hectares of sugar cane has been developed under pivot, sprinkle and furrow irrigation.

Land Development

The sugar estate includes a 35-kilometre flood-protection wall and dyke which regulates water level to protect the canes from flood. It also features a state-of-the art-irrigation system worth over N1 billion to ensure the efficient
cultivation of sugar cane with 276 ha furrow, 700ha pivot and the balance under sprinkler irrigation.

The sugar estate has infrastructure four drain pumps stations with a combined water lifting capacity of 13 cumecs (13,000 litres per second) to evacuate rainwater during the rainy season, 12 irrigation pump stations, and a power
grid stretching 30 km connecting factory turbines and generators to pump stations.

There is also a 2km sealed airstrip and a Sugarcane nursery at the facility.

How much investment is put into mill processing

Over N63 billion has been invested in the Sunti Golden Sugar Estate till date. How much infrastructure is built (community development)?

The Sunti Golden Sugar Estates has so far invested heavily in infrastructural development within its host community; the company has built a 398-kilometre road network- including access road from Mokwa, and internal roads connecting local communities as well as creating drainage systems and culverts which facilitates mobility of members of 28 communities around the SGSE.

The sugar producer has also installed flood protection mechanisms at the Ketso community and provided several boreholes providing clean drinking water to about 6 villages.

Also, surrounding villages have already been provided three schools have been constructed and equipped for learning. Teachers have also been provided, funding teachers. SGSE is also planning to provide the community with a sustainable economic activity to support itself through a fishery and Aquaculture project.

While other amenities like clinic and healthcare facilities, police post including mosques and churches
have been donated by SGSE.

Job creation

At peak production, the estate provides direct employment for about 10,000 people yearly, and impacts
up to 50,000 people indirectly, including 3,000 small-scale out growers who will be cultivating sugarcane to feed the mill.

Sugar Production

SGSE targets production of 1,500 tonnes by the end of 2019 in alignment with FMN’s Backward Integration Plan.

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