Dangote Sugar Refinery Plc has been given the approval by shareholders to float a N500 billion rights issue to fund its strategic expansion, especially for its ambitious backward integration projects.
The sugar refiner obtained the authorisation for the fresh capital raise at the 20th Annual General Meeting (AGM) held on Wednesday in Lagos.
The chief executive of the company, Mr Thabo Mabe, informed investors that efforts are being made to secure approximately $1.3 billion needed to fulfil the commitment to achieving a production target of at least 600,000 tonnes annually by 2030.
“We have revised our strategic development plan to meet the 2030 objectives, leveraging the combined potential of DSR Numan Operation and Nasarawa Sugar Company Limited estates.
“This integrated plan targets substantial cane production of around 6.05 million tonnes across 45,000 hectares from both sites,” he said at the meeting.
He boasted that Dangote Sugar remains the sole producer of edible refined granulated white vitamin A fortified sugar, sourced from its backward integration site at Numan.
On his part, the chairman of Dangote Sugar, Mr Arnold Ekpe, said the backward integration initiative, themed Sugar for Nigeria, is a cornerstone of the company’s strategic vision.
“This initiative is expected to drive profitability and value creation, reduce import dependency, mitigate foreign exchange risks, generate employment, and support local farmers through the outgrower scheme.
“Our objective is to produce 1.5 million metric tonnes of sugar annually from domestically cultivated sugarcane. This involves developing approximately 45,000 hectares, with 2.7 million tonnes of cane earmarked for Numan and 3.35 million tonnes for Nasarawa. Achieving this goal requires substantial investments in land development and production capacity over the next five years,” Mr Ekpe added.
“With shareholder backing for the rights issue, we are in a strong position to bolster our balance sheet, setting the stage for future growth and profitability,” he stated.
Commenting on the organisation’s performance last year, he said, despite a challenging economic environment, revenue improved, though profitability was weighed down by a foreign exchange loss of N46.7 billion and additional finance costs totalling N128.6 billion.
However, he affirmed the company’s commitment to sustainable growth, positive impact, and enhanced profitability, saying that “we will continue optimising our operations, pursuing market expansion opportunities, and increasing our presence across the nation. Aligned with the Dangote Group’s Vision 2030, we are dedicated to investing in our workforce and technology to consistently deliver exceptional products and customer satisfaction.”
Speaking at the AGM, a shareholder, Mrs Bisi Bakare, commended Dangote Sugar for having the largest Sugarcane Outgrowers scheme in Nigeria, describing the scheme as a great boost to backward integration and the domestic economy. She also praised the board and management for navigating the company through the harsh operating business environment.