Shareholders approve N500 billion rights issue as Dangote Sugar strengthens expansion drive

Shareholders of Dangote Sugar Refinery Plc have approved a N500 billion rights issue aimed at strengthening the company’s capital base and accelerating its strategic expansion projects, particularly its backward integration programme.

The approval was given at the company’s 20th Annual General Meeting (AGM) held in Lagos on Wednesday, where investors also lauded the management for its resilience and improved performance in a challenging macroeconomic environment.

According to shareholders, the capital increase would significantly support the company’s long-term growth plans and reduce dependence on imported raw materials through increased local production capacity.

Dangote Sugar Chairman Arnold Ekpe told shareholders that the company recorded improved operational performance in the year under review despite the prevailing economic challenges, stressing that strong revenue growth and improved EBITDA reflect underlying operational strength.

However, it revealed that profitability was impacted by significant foreign exchange losses and financing costs.

The company recorded a foreign exchange loss of N46.7 billion and finance charges of N128.6 billion during the period.

Ekpe said the group recorded revenue of N829.2 billion, representing a 25% increase from the previous year, while EBITDA increased sharply to N149.6 billion from N43.0 billion. It added that the loss for the year improved to N64.1 billion from N270.9 billion recorded previously.

“Despite the challenges, we are taking decisive steps to strengthen operational efficiency and drive sustainable growth. With the approval of the rights issue by shareholders, we are in a better position to strengthen our balance sheet and support future profitability,” he said.

He also highlighted that the company’s backward integration initiative, themed “Sugar for Nigeria”, remains central to its long-term strategy, aimed at reducing import dependency, conserving foreign exchange, boosting local production and creating jobs through off-farming programmes.

Ekpe noted that the program aims to produce 1.5 million tonnes of sugar annually from locally grown sugarcane, requiring the development of around 45,000 hectares of agricultural land. He explained that 2.7 million tonnes of sugarcane is expected for Numan and 3.35 million tonnes for Nasarawa over the development cycle.

“This will require substantial investments in land development and production capacity over the next five years,” he added.

Looking to the future, Ekpe reaffirmed the company’s commitment to operational efficiency, market expansion and investment in technology and human capital, in line with Dangote Group’s Vision 2030.

“We will continue to optimize operations, expand market presence nationwide and invest in our people and systems to deliver consistent value and customer satisfaction,” he said.

Group Chief Executive Officer and Managing Director of Dangote Sugar Refinery, Thabo Mabe, also told shareholders that the company remains Nigeria’s only producer of edible granulated white sugar enriched with Vitamin A, supported by its backward integration operations in Numan.

Mabe said the company is working to secure about $1.3 billion needed to reach its production goal of at least 600,000 tonnes per year by 2030.

He added that the company has revised its strategic development plan to align with its 2030 goals, leveraging the combined operations in the Numan and Nasarawa Sugar Company Limited properties.

The integrated plan, he said, targets around 6.05 million tonnes of sugarcane production across 45,000 hectares at both sites.

A shareholder, Ms Bisi Bakare, praised the company’s outgrower project, describing it as the largest in the country and as a great boost to backward integration and the national economy.

He also praised the board of directors and management for guiding the company through the prevailing economic challenges and sustaining investor confidence.

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