Clock ticks for Brazil as Dangote, others expand Nigerian sugar industry
The clock is gradually ticking for Brazil, biggest sugar exporter to Nigeria, as investors with deep pockets such as Dangote Sugar Refinery, Golden Sugar, HoneyGold, and Crystal Sugar, among others, expand investments in the industry.
Apart from over $2 billion sunk in on-going projects across Nigeria, Dangote last week pledged to build Africa’s largest sugar plantation worth N217 billion, capable of producing more than 1.5 million metric tons of sugar annually in Tunga, Nasarawa State.
The project will start on a 60,000 hectares plantation with an initial capacity of 400,000 tons of white sugar yearly, about a third of the country’s consumption and employ 100,000 persons.
HoneyGold Group is investing $300 million on two sites in Adamawa state, targeting 200,000 MT of sugar annually, just as Crystal Sugar Mills is pumping $30 million to expand its operations to produce 60,000 tonnes sugar/annum from its TCD plant at Hadejia, Jigawa state. Confluence Sugar Company is investing $240million in Kogi State to produce 200,000 MT sugar/annum on about 37,000 ha of land at Ibaji, while Flour Mills’ Golden Sugar Company hopes to capture a sizeable part of the market with an on-going $300 million in Niger State.
Nigeria consumes 1.49 million MT of sugar but only produces 15,000 MT, leaving a gap of 1.48 million MT, according to the latest update by the Nigerian Sugar Development Council (NSDC).
Nigeria imported sugar worth $632.72 million and $552.54 million in 2014 and 2015 respectively.
Nigeria imported $227 million worth of sugar in the first seven months of this year, according to the Central Bank of Nigeria (CBN), which stated that the highest monthly value of imports of $79.1 million was recorded in June, 2016.
Much of the sugar imported into Nigeria came from Brazil but the current expansion in the industry, fuelled by the National Sugar Master Plan, initiated by the Goodluck Jonathan administration, is gradually bringing back the lost glory.
Brazil is world’s biggest sugar exporter, netting $10.4 billion in foreign exchange from export in 2016. Brazil is followed by Thailand, India and France, which earned $2.3 billion, $1.4 billion and $1.1 billion respectively from sugar exports in 2016.
Datagro, a local analyst, reduced its forecast for Brazil’s 2016/17 centre-south sugarcane crush to 597.25 million tonnes, -4.4 percent lower from its May projection of 625 million, owing to dry weather.
Like Brazil, Nigeria was known in the 1970s and 80s for intensive and extensive production of palm oil, cocoa, groundnut, and rubber, but this has fizzled out on the back of oil craze.
“The current expansion in the industry can lead to Nigeria achieving sufficiency in sugar,” Abdurahaman Modibbo Girei, president, Adamawa Chamber of Commerce and Industry, told Real Sector Watch.
“Like other investors, sugar investors would need security, easy access to land, accessibility to the land and good transport network.There are opportunities in Nigeria. But investors will need cheap land. They need a friendly and secure environment, easy access to land and the plantation and security,” Girei said.
Security in the north-east Nigeria has improved, especially in areas with potential like sugar, he added, ststing that this was a big boost to investors.
ODINAKA ANUDU