Dangote Sugar Secures N500bn to Drive Domestic Production Goals
By Patience Ikpeme
Dangote Sugar Refinery Plc shareholders have approved a N500 billion Rights Issue.
The move is intended to fortify its market leadership and insulate its operations from volatile external economic pressures.
This capital injection, approved during the company’s 20th Annual General Meeting in Lagos on Wednesday, signals a major pivot toward self-sufficiency and long-term financial stability.
The decision arrives at a critical juncture for the refinery as it seeks to navigate a turbulent macroeconomic landscape defined by currency fluctuations and high interest rates.
By expanding its capital base, the firm intends to fast-track its ambitious “Sugar for Nigeria” backward integration projects, a move investors believe will eventually decouple the company’s fortunes from the uncertainties of the foreign exchange market.
Addressing the assembly of investors, the Chairman of Dangote Sugar Refinery, Mr. Arnold Ekpe, provided a candid assessment of the previous financial year. He pointed out that while the company achieved significant operational milestones, the bottom line suffered under the weight of national economic challenges.
“The year under review saw a marked improvement in performance, despite a challenging economic environment,” Ekpe stated. “Revenue growth and enhanced EBITDA demonstrate positive operational momentum. However, profitability was weighed down by a foreign exchange loss of N46.7 billion and additional finance costs totaling N128.6 billion.”
Despite these fiscal burdens, the company reported a turnover of N829.2 billion, representing a 25 percent increase over the 2024 figures. Furthermore, the Chairman noted that the loss for the year showed a significant recovery, narrowing to N64.1 billion from a staggering N270.9 billion in the prior year. This recovery was bolstered by an EBITDA that surged to N149.6 billion, a sharp climb from the N43.0 billion recorded previously.
The centerpiece of the company’s future strategy is its backward integration program (BIP). This initiative is designed to transform the refinery from a business reliant on imported raw sugar into a fully integrated domestic producer. With the newly approved N500 billion Rights Issue, the board expressed confidence in its ability to execute this vision.
“With shareholder backing for the rights issue, we are in a strong position to bolster our balance sheet, setting the stage for future growth and profitability,” Ekpe told the shareholders. “Our objective is to produce 1.5 million metric tonnes of sugar annually from domestically cultivated sugarcane. This involves developing approximately 45,000 hectares, with 2.7 million tonnes of cane earmarked for Numan and 3.35 million tonnes for Nasarawa.”
The Chairman explained that the initiative is expected to drive value creation by reducing import dependency and mitigating the very foreign exchange risks that hampered recent profits. Beyond the balance sheet, he noted that the project would serve as a catalyst for social impact, generating mass employment and providing vital support to local farmers through an extensive out-grower scheme.
Looking toward the next decade, the management team indicated that substantial investments are required to meet their self-sufficiency targets. The Group Managing Director and CEO, Thabo Mabe, revealed that the company is currently focused on securing approximately $1.3 billion in funding to meet its production goal of at least 600,000 tonnes annually by 2030.
“We have revised our strategic development plan to meet the 2030 objectives, leveraging the combined potential of DSR Numan Operation and Nasarawa Sugar Company Limited estates,” Mabe explained. “This integrated plan targets substantial cane production of around 6.05 million tonnes across 45,000 hectares from both sites.”
Mabe also noted that Dangote Sugar remains unique in the marketplace as the sole producer of edible refined granulated white vitamin A fortified sugar sourced directly from its local site in Numan. This distinction, he suggested, provides a competitive edge as the company optimizes its operations and increases its national footprint.
The meeting saw strong vocal support from the investor community, who expressed satisfaction with the management’s transparency and resilience. Shareholders particularly pointed to the company’s role in rural development as a reason for their continued backing.
Mrs. Bisi Bakare, a shareholder attending the meeting, spoke warmly of the company’s impact on the local agricultural sector. She described the out-grower scheme as the largest of its kind in Nigeria and a vital boost to the domestic economy.
“The board and management deserve praise for navigating the company through the harsh operating business environment,” Bakare remarked during the proceedings.
In his closing remarks, Ekpe stated that the company remains dedicated to its workforce and the adoption of new technologies to ensure consistent product quality. He indicated that the firm’s trajectory is now firmly aligned with the broader “Vision 2030” goals of the Dangote Group, focusing on sustainable growth and enhanced shareholder returns.
As the N500 billion Rights Issue moves forward, the refinery appears set to transition into a new era of industrial independence, aiming to turn the vast plains of Numan and Nasarawa into the engine room of Nigeria’s sugar industry.
