Dangote Sugar posts profit before tax of N34.6bn in 2018
…laments unabated smuggling of sugar into markets
Leading sugar manufacturing company, Dangote Sugar Refinery plc, on Monday received commendations from shareholders for its resilience despite the harsh operating environment of the 2018 financial year as well as for continuous payment of dividend.
At the Annual General Meeting of the company held in Lagos, Bisi Bakare, national coordinator, Pragmatic Shareholders Association of Nigeria (PSAN), said that though many quoted companies are struggling with the payment of dividends, Dangote Sugar Refinery is 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.
Sunny Nwosu, founder, Independent Shareholders Association of Nigeria (ISAN), decried the Apapa-Wharf traffic which has impacted negatively on the performance of companies as they struggle to move finished goods and raw materials to distributors and warehouses. He said the board and management deserve a hefty pat on the back given the situation under which the achieved the result.
In his response, Aliko Dangote, chairman, Dangote Sugar Refinery plc, stated the resolve of the company to soar to greater heights and create more values for stakeholders despite the plethora of challenges in the economy. He said the company has posted a profit before tax of N34.6 billion with a turnover of N150.4 billion for the 2018 financial year despite, even as the company lamented the continuous smuggling of sugar into the country.
Dangote said the company was able to post an appreciable resilient performance despite the gloomy economic outlook at the dawn of the previous year 2017.
He told the shareholders that Dangote Sugar was able to weather through the economic downturn and advanced significantly in 2018 because it aggressively pursued its backward integration plan 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 gridlock which continue to affect evacuation of products from the refinery,” Dangote said.
He explained that prior to the traffic logjam at Apapa, the company could move up to between 60 and 70 trucks out of the refinery but since the problem started, it could hardly move up to 20 trucks daily.
He said the company had to revise its backward integration timeline to mitigate the unforeseen challenges, noting 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 had just ended its 2018/2019 crop season.
“Rehabilitation of the land and its infrastructure for improved yield and output is still on-going,” Dangote said.
He disclosed that the first phase expansion of the Savanna Sugar capacity from the current 3,000TCD to 3,500TCD has been completed while the subsequent increase of production capacity to 6000TCD has commenced and is 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”.
“At Tunga, activities are well underway at 68,000 hectares sugar projects site. Activities ongoing at the project site include the establishment of the cane seed nursery, housing and other basic infrastructure with the project currently employing 325 staff with potential for increase towards the fourth quarter of the year,” Dangote stated.
In the same vein, the chairman said the company was into so many Corporate Social Responsibility (CSR) projects in the host communities of Tunga that will cater for 25,000 beneficiaries.
According to him, school projects, water projects were undertaken in the Savanna Sugar host communities while 13,000 women were supported with N130 million through the Aliko Dangote Foundation.
Looking into the future, Dangote said despite challenges, the company is committed to the medium- and long-term goals for the sugar for Nigeria project, investing and growing the business efficiently even with the cost-optimisation efficiency project on-going in the Apapa refinery.
Meanwhile, the shareholders were full of praises for the management for the modest achievement during the period under review, saying so many other companies were just reporting tales of woes at their meeting.
One after another, the shareholders urged the management to continue with the strategies that have made the company raise its head high in the murky water of economic downturn.