Dangote Sugar Refinery has decried the overwhelming drop in earnings as reported in its 2018 financial report. Dangote Sugar Refinery is the number one sugar manufacturer and supplier in Nigeria and sub-Saharan Africa. The report according to the company, did not reflect shareholders’ expectations.
Possible causes for the drop in Dangote Sugar Refinery Revenue
The company disclosed that the drop in revenue as reported in the financial book, was caused by the high incidence of smuggling of unlicensed and cheap sugar products into the country. This is coupled with the counterfeiting of those cheap products which has actually made consumers doubt the genuineness of locally made sugar products.
Furthermore, the sugar refining firm has also attributed the dwindling purchasing power among consumers to be another factor. This could be the upshots from the illegal activities of smugglers who are into the business of counterfeiting cheap and unlicensed sugar products.
Another reason, as cried by the firm is the dilapidated infrastructure and bad roads which has resulted to alarming gridlock in and around the Apapa Ports in Lagos. It is known that the Lagos ports handles about 80% of shipping activities in Nigeria. The gridlock at the ports contributes to the late delivery of its products to customers.
This significantly affected Dangote Sugar Refinery’s revenue as the company’s revenue fell by 26% to ₦150.4 billion while the net income fell by 44% to ₦22.2 billion.
Plans to boost production and revenue for Dangote Group
The company, in a statement condemned the illegal activities of these smugglers saying that Dangote refinery will work with the appropriate agency to combat the smuggling of sugar into the country.
Dangote Group has also in recent times revealed plans to build more storage facilities for finished products at Dangote’s refinery this year. This will improve its production cycle, which has been hampered by the non-availability of trucks owing to the traffic gridlock.