Shares in Dangote Sugar Refinery (DSR) Plc closed firmer yesterday as investors reacted positively to the company’s acquisition of 95 per cent stake in Savannah Sugar Company Limited (SSC), which is expected to boost the revenue of the leading sugar manufacturing company. DSR’s share price rose by N0.14 to close higher at N7.60 per share on a day the bulls overran the stock market to keep indicators green.
The board of DSR had last week announced that in line with its desire to attain the status of a fully integrated sugar company (via backward integration plan), it had executed a Share Sale and Purchase Agreement with Dangote Industries Limited in respect of the acquisition of 2,143,281,975 ordinary shares of N1.00 each in SSC representing 95 per cent of the company.
“DSR is confident that the acquisition of SSC will provide the company with a solid platform to supplement its existing sugar refining capacity, reduce input cost and substantially scale its business with new business opportunities (including the generation of bio-ethanol fuel from the production of molasses and development of a bagasse-based coal generation plant), increase margins, boost its export potential as well as provide a valued basis for further profitable growth of the company as well as enhanced shareholders' value,” the company said.
The principal business activities of SSC include growing and processing of sugar cane with product offerings spanning white crystalline refined sugar (finished product), molasses (by-product), bagasse (consumed for company-owned boilers) and filter press mud (used as manure in the fields). The company has a cane crushing capacity of 4,000 metric tons of cane per day and 32,000 hectares of land for cultivation of sugar cane.
Meanwhile, the market was highly bullish yesterday with 53 advancers compared with 15 laggards. PZ Cussons Nigeria Plc led the price gainers garnering N3.56 to close at N39.19 per share. Lafarge Cement WAPCO Nigeria Plc trailed with N3.43 to close at N71.43 per share.