By Goddy Egene
The financial fortunes of Dangote Sugar Refinery(DSR) Plc would soon witness further boost as shareholders of the company yesterday approved the proposal to acquire Savannah Sugar Company(SSC) for its background integration objectives.
The shareholders gave the approval at the sixth Annual General Meeting (AGM) in Lagos, saying the acquisition of SSC would reduce DSR’s dependence on imported raw materials and save cost for the company.
In his address to shareholders, Chairman of DSR, Alhaji Aliko Dangote said SSC is currently 95 per cent owned by Dangote Industries Limited (DIL), the core shareholder and was acquired from the Federal Government in 2002 during the privatisation exercise as part of DIL to reduce the company’s dependence on imported raw sugar.
According to Dangote, DSR’s raw sugar importation and refining business has experienced declining profitability margin “due to volatile raw sugar prices in the global market and increasing competition in the local market.”
He explained to the shareholders that as part of strategies to retain its market leadership, and dominant position, the company had been working on a number backward integration strategies into domestic sugar production and milling business.
“The new strategy is in support of the Federal Government transformation agenda and is ahead of the proposed sugar policy with the thrust of encouraging local production of sugar. The strategy will significantly reduce the company’s cost structure while ensuring that it remains competitive and delivers improved profitability and enhanced shareholder value,” he said.
According to him, DSR is the market leader in the Nigerian sugar industry with about 70 per cent market share and the largest sugar refinery in Sub-Sahara Africa with installed sugar refining capacity of 1.44million metric tonnes per annum.
Speaking in the same vein, the Managing Director of the company, Abdullahi Sule said clear vision of the company was to grow local and international market.
“Arrangement are currently under to expand “our export horizon beyond Ghana. We are prospecting other countries across the West African Coast. Efforts are in top gear to ensure the refinery expansion projects and the proposed acquisition of Savannah Sugar as part of the our backward integration projects are completed this year,” he said.
Meanwhile, investors traded 563.803 million shares at the stock market yesterday, while the NSE All-Share Index fell from 22,524.67 to close at 22,517.66. The market had witnessed a rebound the previous day after two days of losses. However, the bears returned yesterday causing the index to close lower.