Sugar imports to end soon as Dangote, HoneyGold, Flour Mills expand operations

Nigeria’s sugar imports are likely to end soon as investors such as Dangote Sugar Refinery, HoneyGold Group, Bua Sugar Refinery, Confluence Sugar, Crystal Sugar Mills as well as the new entrant, Flour Mills of Nigeria, expand refining and sugarcane plantation operations to boost local production in the economy.

Africa’s largest economy’s sugar industry has been badly neglected in the past as most of the demands were met by imports. In 2010, local sugar consumption was 985,675 metric tons (MT), while production was just 30,000MT. In other words, importation was 955,675MT, while its cost implication on the country totalled $482.62 million.

Worse still, in 2011, consumption rose to 1,139,410MT, while production was just 35,000MT. Hence, importation was 1,104,410MT, whereas its cost implication on Nigeria’s economy reached $657.124 million. Nigeria met its worse situation in 2012, when consumption became 1,108,980MT while production fell abysmally to 10,843MT. Hence, importation during this year was 1,098,137MT, implying that it cost the country a total of $517.22 million to import sugar.

Similarly, while per capita consumption was 7.1 in 2010, it was 7.6 in 2011 and 6.6 in 2012, data from National Sugar Development Council (NSDC) have shown.

But aggressive investments of the key players have resulted in increased capacity. According to the NSDC, refining capacity has risen to 75 percent, from 60 percent reported by end of 2012. Similarly, raw sugar imports have dropped to 800,000MT from 1.4 million MT, just as refined sugar imports nosedived to 0.67 percent, from 1.88 percent reported in 2012. But the market has continued to show huge promises as total national sugar demand rose to 2 million MT at end of 2013, from 1.5 million tons in 2012.

Apart from Dangote Sugar’s $2 billion planned investments in sugarcane plantations and factories in six Northern states, Aliko Dangote, president of the group, recently announced the company’s intention to invest $250 million in Jigawa State in September.

HoneyGold Group is putting together $300 million on two sites in Adamawa State, with the target of producing 200,000MT of sugar annually.

Similarly, Crystal Sugar Mills is investing $30 million in Hadejia, Jigawa State, with a view to expanding its operations to produce 60,000MT of sugar per annum from its acquired 1,500 TCD sugar plant.

Confluence Sugar Company, another keen investor, has also concluded arrangements to pump $240 million in Kogi State to produce 200,000MT of sugar per annum on 37,000ha of land at Ibaji, said Latif Busari, executive secretary, NSDC, in a recent statement.

On its part, Bua Sugar is expanding, having recently acquired Lafiagi Sugar Plant in Kwara State.

“With the backward integration policy introduced in the sub-sector, Nigeria would cease to be a net importer of sugar in the next four years. With the enabling environment, right policies and political will of the Jonathan’s administration, the sugar sub-sector would witness the same turnaround as cement’’ said Aliko Dangote, during the launch of the National Industrial Revolution Programme (NIRP) in Abuja, recently.

Flour Mills of Nigeria began commercial sugar refining in February. Jacques Vauthier, chief financial officer, said construction work on the 750,000MT capacity plant had been completed and a test run done in December.

Apart from these investors, Unikem Industries is investing in a newly acquired plant in Dangerri, Kogi State, to produce 80,000MT of sugar, while Colechurch Nigeria Limited has also entered the stage. Honeywell Group is also making plans to invest in the burgeoning industry. Stakeholders say with this trend, the country will soon meet its local demand.

“Nigeria plans to end imports of packaged sugar from this year to boost local investment and become a self sufficient producer,’’ said Lateef Busari, executive secretary, NSDC, recently. Real Sector Watch gathered that soon, imports of raw sugar for refining will only be approved by the president on the recommendations of the trade and industry minister.