Manufacturers bullish on Nigeria’s north despite insecurity

Undeterred by the security situation in parts of northern Nigeria, mega manufacturers are continuing to invest there on account of the exponential availability of essential raw materials in the region, as well as by the nation’s burgeoning population (168.8 million), many of whom are resident up north.

The manufacturers are investing millions of dollars in the establishment of factories and plantations in the north and engaging in audacious expansion initiatives.

Boko Haram insurgency has cost over 12,000 lives up north, including hundreds of military personnel, official data shows. The group is also responsible for the kidnapping of over 200 students of the Girls’ Secondary School, Chibok, Borno State. Stakeholders say the trend up north has the capacity to dampen investors’ confidence.

However, the current situation suggests that manufacturers are still attracted to the region due to availability of raw materials. Nigeria’s north has abundance of sugarcane, groundnuts, Gum Arabic, mangoes, pineapples, tomatoes, cowpea, among others, and is also rich in solid minerals such as limestone, quartz, aquamarine, sapphire, gypsum and iron ore.

Dangote Sugar is investing a whopping $2 billion in six states in the north. One of the states is Adamawa, which has not been left out of the raging insurgency.

Dangote Sugar, which recently acquired Savannah Sugar plc in Numan, Adamawa State, north-eastern Nigeria, targets 1.5 million metric tonnes (MT) of sugar from the state and plans to expand from its current 6,500 hectares (ha) to 21,000 ha to produce 100,000 tonnes of sugar annually by 2018. The firm has also acquired $35 million worth of machinery from Pan African Equipment Group, as part of its backward integration strategy designed to ensure realisation of the national sugar master plan.

Additionally, Dangote Group has announced plans to invest $250 million in a proposed sugar factory recently acquired by the company in Kaugama Local Government Area of Jigawa State. The sugar manufacturing firm is expected to start operations in September, having acquired 20,000 ha of land in the state, with the capacity to grow over 150,000 MT of sugar each year.

The group also leads an offshore business revolution in the area, having in its cupboard a plan to begin food and beverage manufacturing firms in the state.

“We hope to commence work in the factory this September because production of sugar is a seasonal business and the season is quite short. We also hope to include offshore industries like milk dairy factory and poultry farming,” said Aliko Dangote, chairman, Dangote Group, during his May 22 visit to Sule Lamido, governor of Jigawa State.

Interestingly, Dangote invests in the north and uses local farmers, after paying them compensations. In Jigawa State, Dangote Sugar has put plans in place to use local farmers in sugarcane plantations and pay them due compensations.