Dangote Sugar Nigeria Says Illegal Imports Hurt Sales, Profit

LAGOS (Capital Markets in Africa) – Dangote Sugar Refinery Plc, Nigeria’s biggest grower of the sweetener, said illegal, low-quality imports are putting pressure on its selling price while a traffic gridlock around its production site in Lagos is hampering delivery of goods to customers.

“Sales and production volumes were constrained’’ in 2018 because of “these challenges,’’ the company said in emailed presentation. It plans to “work with the regulatory agencies to compact smuggled sugar’’ this year, it said.

Although Nigeria banned packaged-sugar imports as it aims to protect local industries and diversify the economy, importers take advantage of the nation’s porous borders to bring in the product. Also, traffic jams around the ports of Lagos, which currently handle about 80 percent of shipping activities in the West African nation, hamper distribution.

The company, owned by Africa’s richest man, Aliko Dangote, said revenue dropped 26 percent to 150.4 billion naira ($418 million) in 2018 while net income retreated 44 percent to 22 billion naira.

The company will this year build more storage facility for finished products in the refinery to optimize the production cycle, which has been hampered by the unavailability of trucks due to the traffic gridlock, it said.

Source: Bloomberg Business News