By Crusoe Osagie
The nation’s foremost sugar manufacturing company, Dangote Sugar Refinery Plc (DSR), has announced a 25 per cent reduction in the prices of its product in response to the price of sugar in the international commodity market.
With the new price regime, Dangote crashed the price of its 50 kilogramme bag from N8,900 to N6,660.
Managing Director of the company, Mr. Abdullahi Sule, attributed the development to the recent reduction in the price of raw sugar at the international market.
The reduction, according to Sule, reflects the trends in the international market where the prices of raw sugar have dropped from about $0.26 cents to the current $0.19 cents.
He said the company had a policy of passing the benefits of price reductions to the customers.
Already, with the price reduction rocking the market and some other sugar refineries alleging that DSR reduced the sugar prices to a level where it makes it difficult for competition to survive.
Sule, explained that Nigeria is not a sugar producing nation, hence all raw sugar that are refined locally are imported from Brazil by all industry players and that there was nothing to hide.
The DSR Chief Executive explained that raw sugar was traded openly on the international commodities market with the prices available for all and sundry to see and/or verify.
“DSR only reacted to a reduction in the international price of sugar in the last one year for the benefit of its customers. As a responsible corporate citizen, we are committed to the socio –economic growth of the nation’s economy and there is no need for this horrendous accusation,” he said
According to him, raw sugar is traded openly on the International Commodities Market with the prices available for all to verify.
All existing sugar refineries in Nigeria import their raw sugar from the same country in South America.
“When prices of sugar shot up internationally, we increased our prices and charged consumers as much as N9,600 per bag. In the last one year, the international prices of raw sugar have dropped from about $0.26cents to the current price of about $0.19cents per pound.
“Therefore, in line with DSR Plc’s strategy of passing the benefits of price reduction to our customers, we reduced the prices of our 50kg sugar bags from N8,900.00 to N6,600.00 (VAT inclusive) with effect from December 16, 2012
“All other sugar refineries in Nigeria are enjoying five years’ tax holiday at the moment.
“With our current pricing, our budget for this business year 2013 will give even better profit/returns to our shareholders and with a corporate tax and other miscellaneous charges of over N22 billion.
“Besides the tax benefits the price reduction will also check the proliferation of unfortified sugar, which is hazardous to the health that finds its way into the northern markets through unverifiable sources. Smuggled sugar accounts for over 30 per cent of public consumption. Our action of reducing the sugar price has resolved this problem.
“All these are verifiable facts and are available with the regulators for public scrutiny. Dangote Sugar is not only a Pioneer sugar refinery in Nigeria; we are a quoted company and a leader in the Sugar Refining Sub Sector of the Nigerian Food & Beverage Industry.
“As a responsible corporate citizen, we are committed to the socio–economic growth of the nation’s economy and state categorically that there is no need for this horrendous accusation. We are not the only player in this industry. We have about 60% dominance.
“Despite the new levy on raw sugar beginning January 2013, the business is still very attractive. We are working aggressively towards implementing backward integration policy and we will continue to pass any reduction in international price of sugar to our local consumers
“In year 2012, our unaudited financials shows that we recorded a net profit of about N11billion while we paid the Federal government a total of N20.25 billion which includes: VAT N8.2 billion, income tax N5.4 billion, duty/other charges N5.8 billion and withholding tax of over N800 million. In effect, the Federal government’s income is almost twice our profit. Where have we gone wrong by passing savings to Nigerian consumers?”