Nigerian billionaire industrialist Alhaji Aliko Dangote has hinted on a proposed deal to acquire Savannah Sugar, which would further consolidate the position of Dangote Sugar Refinery (DSR) in the Nigerian sugar industry, where it presently holds sway with 70 per cent stake in market shares, the largest sugar refinery in Sub-Sahara Africa and an installed sugar refining capacity of 1.44million metric tonnes per annum.
Africa’s richest man and Chairman of DSR Aliko Dangote revealed this while addressing shareholders of Dangote Sugar Refinery company at the company’s 6th annual general meeting in Lagos.
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 some backward integration strategies, into domestic sugar production and milling business.
Shareholders of the company at the weekend, accented to a proposal to acquire Savannah Sugar Company (SSC) for its background integration objectives.
Dangote however noted that Savannah Sugar Company (SSC) was 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.
“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.
The managing director of the company, Abdullahi Sule said the vision of the company was to grow the local and international markets. The MD also indicated that arrangements are in place to expand the company’s 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 our backward integration projects are completed this year,” he said.