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Dangote Sugar increase production by 13.7% despite pandemic

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DANGOTE SUGAR

 

 

Despite the disruptions to the economy, owning majorly to coronavirus pandemic, Dangote Sugar Refinery recorded an increase in production volume which rose by 13.7 percent to 743,858 tonnes in the financial year ended December 31, 2020, compared to 654,071 tonnes in 2019.

The sugar group also posted an increase in sales volume which rose by 6.9 percent, from 684,487 tonnes to 731,701 tonnes.

According to the audited result released on the floor of the Nigerian Stock Exchange, the improvements were attributable to operations optimization strategy despite the momentary disruption caused by civil unrest in last quarter of the year. Growth continued to benefit from the sustained efforts to drive customer base expansion and several trade initiatives and investments.

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A breakdown of the results indicated that Group revenue increased by 33 percent to N214.30 billion in contrast to N161.09 billion in 2019. Gross profit increased by 40.4 percent to N53.75 billion, compared to N38.29 billion in 2019 while Group profit after taxation for the year increased by 33.2 percent to N26.70 billion as against N22.36 billion in 2019, reflecting management’s unrelenting goal to deliver consistent shareholder value.

The Group Managing Director/Chief Executive Officer of Dangote Sugar Refinery Plc, Mr. Ravindra Singhvi, speaking on the results said that despite the socio-economic uncertainties occasioned by COVID-19 pandemic during the year under review, the sugar group continued on the growth path with commitments to improve o performance and generate value for all stakeholders.

This was reflected in the sales volume delivery of 731,701 tonnes, and production of 743,858 tonnes being 6.9% and 13.7% increase in volumes over the comparative year 2019.

According to him, “our focus on the implementation of our key strategies in the face of the several challenges posed by the COVID Pandemic, the peculiarities of the Apapa traffic situation amongst others we achieved a topline growth in revenue of N214.30 billion, a 33.0% increase over 2019; a 53% YOY increase in PBT, and 33.2% increase in PAT.

2020 was indeed very eventful for our company ranging from the weak macroeconomic fundamentals caused by the underlying impact of the COVID-19 pandemic which saw to the steady rise in FX rate, high inflation and the significant rise in our cost of production, to the worsening traffic gridlock on the Apapa Wharf road which led to delays and at times disruption of the distribution and deliveries to customers.”

Mr. Singhvi added that the company activated its Business Continuity Management System (BCMS) during the lockdown periods due to the COVID pandemic and disruptions caused by EndSARS protests, which helped to minimize the adverse impact the situation had on businesses in the country.

He noted that one of the key highlights of during the year was the successful completion of the Scheme of Arrangement – merger of Dangote Sugar Refinery Plc (DSR) and Savannah Sugar Company Limited (SSCL) with effect from September 1, 2020 to operate under one unified entity.

He added, “We are confident the merger will enable us to achieve operational, administrative and governance efficiencies resulting in increased shareholder value. We will continue to pursue our Backward Integration Projects, and other key initiatives to grow our sales volumes, market share, optimize cost and operational efficiencies.

Dangote Sugar Refinery is Nigeria’s largest producer of household and commercial sugar with 1.44M MT refining capacity at the same location. Our refinery located at Apapa Wharf Ports Complex, refines raw sugar imported from Brazil to white, Vitamin A fortified refined granulated white sugar suitable for household and industrial uses.

Our Backward Integration goal is to become a global force in sugar production, by producing 1.5M MT/PA of refined sugar from locally grown sugar cane for the domestic and export markets.

To achieve this, Dangote Sugar Refinery Plc acquired Savannah Sugar Company Limited, located in Numan, Adamawa State in December 2012, and embarked on the ongoing rehabilitation of its facilities and expansion of its 32,000 hectares’ sugarcane estate. In September 2020, the scheme of merger between DSR and Savannah Sugar estate was completed which gave birth to a bigger and stronger business with considerable opportunity for growth and delivery of superior benefits to all stakeholders. The expansion and rehabilitation of the sugar estate is still ongoing as well as the development of the greenfield site acquired at Tunga, Nasarawa State for the achievement of DSR’s sugar for Nigeria development master plan.

The Nasarawa Sugar Company Limited, is the registered subsidiary of Dangote Sugar Refinery Plc. The 78,136 hectares Sugar Project Site is located at Tunga, Awe Local Government Area, of Nasarawa State. Massive developments in agriculture, irrigation infrastructure amongst others is ongoing at the site. Unfortunately, Lau/Tau project is still on hold following the lingering compensation issue between the communities and Taraba state government.

 

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Business

GBB to Train Over 300 Civil Servants on Govmail

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Abuja, Nigeria – Galaxy Backbone (GBB), the nation’s foremost digital infrastructure and services provider, is set to train over 300 civil servants, including Email Administrators and Heads of ICT, on the adoption, management, and administration of Govmail—the secure official email platform for Nigeria’s public sector. The training, which will be conducted in batches throughout the month of March 2025, aims to ensure maximum impact and effective knowledge transfer.

This initiative is in alignment with the Federal Government’s digitalisation agenda, which prioritizes secure, efficient, and technology-driven governance. By equipping civil servants with the necessary expertise to optimize Govmail, the government is ensuring seamless communication across Ministries, Departments, and Agencies (MDAs) while strengthening data security and operational efficiency.

Prof. Ibrahim Adeyanju, the Managing Director/CEO of Galaxy Backbone, reaffirmed the organisation’s commitment to driving Nigeria’s digital transformation through innovative and secure technology solutions. “As the nation’s leading provider of digital infrastructure, GBB is playing a pivotal role in ensuring that government communications are secured, professional, and aligned with global best practices. This training will enhance civil servants’ ability to effectively utilize Govmail in carrying out their official responsibilities,” he stated.

The training is being conducted in collaboration with the Office of the Head of the Civil Service of the Federation (OHCSF), who has sent out a Circular to all MDAs informing them of this specialized training aimed at providing hands on experience with GOVMAIl features and ensure uniform adoption of and compliance with government approved digital communications standards. This further reinforces the government’s commitment to a digitally-driven public service. It would be recalled that the Head of the Civil Service of the Federation recently described Govmail as a ‘game changer’ for government communication. This underscores the significance of the platform in enhancing inter-agency collaboration, data sovereignty, and information security across all MDAs.
Through this capacity-building initiative, GBB is reinforcing its role as a key enabler of Nigeria’s digital transformation journey, ensuring that public sector professionals are well-equipped to harness the full potential of digital tools in their daily operations.

 

About Galaxy Backbone
Galaxy Backbone Ltd is a digital infrastructure and services company committed to providing secure and efficient digital solutions to support governance, service delivery, and national development for public and private sector organisatuons. GBB plays a critical role in the digitalisation of government processes, ensuring efficiency, security, seamless collaboration across MDAs and providing a platform for enabling digital services across corporate and public organisations.

Signed:
Chidi Okpala
Head, Corporate Communications

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KEDCO Sees Improvement in Financial Performance Following Power Restoration, Appeals for Prompt Payment

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Kano Electricity Distribution Plc. (KEDCO) has reported steady improvements in financial and business performance following the restoration of power supply after a significant blackout during the September-October 2024 billing and collection cycle. This was disclosed in a press statement signed by Sani Bala Sani, Head of Corporate Communication at KEDCO.

According to Sani, the blackout had severely impacted KEDCO and three other distribution companies in the North East and North West regions, with KEDCO being the worst hit. “Recall that KEDCO, alongside three other distribution companies in the North East and North West had significant disruption to power supply in October, with KEDCO being the worst hit,” he stated.

The operations at KEDCO were initially affected on October 13th, 2024, with only 40% of their grid allocation being supplied after the Shiroro-Kaduna 330kV line incident. This situation was exacerbated by a total blackout on October 20th, 2024, during the peak of the revenue collection cycle. “Although the power supply was partially restored to a 40% level on 30th October, we were only availed with up to around 85% supply levels on November 14th and are anxiously awaiting the completion of the Shiroro-Kaduna repairs,” Sani explained.

The blackout resulted in KEDCO’s worst market performance of the year, posing significant financial and economic challenges for both KEDCO and its customers. “Having zero grid supply posed significant financial and economic challenges for KEDCO and its customers, with many customers resorting to costly backup sources or shutting down operations,” Sani noted.

Despite the challenges, KEDCO has seen improvements in power supply, which now stands at around 85%, leading to significant collections from last month’s arrears. Sani urged customers to cooperate by paying their current bills and outstanding arrears promptly to ensure business sustainability. “Thankfully, with the current power supply at around 85%, we have recorded significant collections from last month’s arrears and are appealing to our customers to continue to cooperate with us on prompt settlement of their current bills and arrears, for business sustainability,” he appealed.

Sani also commended the resilience of KEDCO’s customers and vowed to continue improving the performance in supplying safe and reliable electricity. “We commend the resilience of our customers and vow to continue to improve our performance in supplying them with safe and reliable electricity,” he said. He thanked the Honourable Minister of Power for his timely intervention and the Transmission Company of Nigeria (TCN) for their restoration efforts. “We equally acknowledge TCN’s restoration efforts and appreciate the Federal Government’s commitment to helping improve the redundancy and safety of the National Grid,” he added.

Looking ahead, KEDCO’s core investor and Board remain committed to driving investments and improving performance through embedded generation supply options via the Safe Grid and Utility 2.0 projects. “It remains our core investor and Board’s resolve to continue to drive investments and improved performance through embedded generation supply options in our network via the Safe Grid and Utility 2.0 projects,” Sani stated.

 

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Lubricants and Nigeria’s economy

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By Cosmas Chukwunonso Nwobi

Every engine depends on oil, which serves as the heat transfer medium and lubricant for moving parts. It stops wears and damages from happening because the moving parts won’t be rubbing against one another.

The primary consumers of engine oil in Nigeria are those who own cars, generators, enterprises, tricycles, and motorcycles. Diesel and gasoline engines both utilize various grades of engine oil. Diesel engine oil is used to maintain heavy vehicles (diesel vehicles), small and large generators, as well as passenger vehicles (light vehicles). Petrol engine oil is used to maintain passenger vehicles (light vehicles).

The overall annual requirement for lubricating oils across the globe is projected to be 50 billion liters, or 60 percent automotive and 40percent industrial. However, industrial lubricants account for more than 70% of total global gross revenues and profit margins.

According to projections, Nigeria, with a gross domestic product of N150 billion in 2013 and more than N450.37 billion by the end of Q1 2021, is the third-largest user of lubricating oils in Africa, consuming 700 million liters of the substance per year (or 1 percent of the global demand).

The aggregate profit margins of the blending plants were N45 billion in 2013 and N120 billion in the first quarter of 2021. Their total assets are projected to be worth N20 billion. This indicates that domestic production of lubricating oils meets 75 percent of the country’s total demand, with imports from specialist marketing companies providing the remaining 25percent.

You might also be interested to know that, over the projected period (2021-2026), the market for lubricants in Nigeria is anticipated to develop at a compound annual growth rate (CAGR) of 1.54%, reaching 300,399.52 kilo tons by 2026. which demonstrates that the market for automotive lubricants in Nigeria is anticipated to grow to $683 million by 2023.

This demonstrates that the significance of engine oil cannot be overemphasized and that lubricant production would be a very profitable business endeavor that would considerably boost Nigeria’s economy.

However, this industry was adversely affected by Nigeria’s slowing economic growth. The 2016 recession brought on by the sharp decline in global oil prices was the root cause of the downturn. Oil prices started the year at $36.76 a barrel and reached a high of $54.06 for the year. The lack of foreign exchange had a serious negative impact on the ability of various lubricants manufacturing companies to conduct business and imposed severe costs on key sectors of the country, which further cascaded into all areas of the economy. Given that many players in the industry imported large volumes of base oil and other raw materials needed to blend lubricants at the time, this meant that the shortage of foreign exchange affected all sectors of the economy.

However, the investment landscape is currently changing and Nigeria’s lubricant industry, if properly managed, will surely triple it’s current position in a few years to come. This is due to large oil marketers taking advantage of the lubricants market’s deregulation and lack of significant government intervention.

I commend the effort of the Nigerian Government so far in reducing import charges for Lubricant Blending plants firmly advocate for the need of a driving and I strongly advocate that more can be done in this area since Nigeria’s lubricant business has great prospects for investors. Should we succeed, early investors will also benefit from pioneer status and a five-year tax break.

I firmly believe that better consumer education, cooperation with transportation companies, increased consumer knowledge, and the provision of higher-quality lubricants at lower prices would help Nigeria’s lubricant manufacturers expand and make more money.

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