By MICHAEL EBOH

Shareholders of Dangote Sugar Refinery Plc, DSR, has approved the company’s backward integration strategies, authorising it to acquire Savannah Sugar Company, SSC.

The shareholders, who gave the approval at the company’s annual general meeting in Lagos, said the acquisition would help drive down the company’s cost, reduce its dependence on imported raw materials and improve its profitability.

In his address to the shareholders, Alhaji Aliko Dangote, Chairman, DSR, said currently SSC is 95 per cent owned by Dangote Industries Limited (DIL), the core shareholder and was acquired from the Federal Government in 2002 during the privatisation exercise as part of DIL plan to reduce the company’s dependence on imported sugar.

According to Dangote, DSR’s raw sugar importation and refining business has experienced declining profitability margin due to volatility in the prices of raw sugar in the global market and increasing competition in the local market.

He explained to the shareholders that part of strategies to retain its position in the market, the company had embarked on a number of backward integration strategies into domestic sugar production and milling business.

“The new strategy is in support of the Federal Government’s transformation agenda and is ahead of the proposed sugar policy with the thrust of encouraging local production of sugar strategy will significantly reduce the company’s cost structure while ensuring that it remains competitive and delivers improved profitability and enhanced shareholder value,” he said.

According to Dangote, DSR is tmarket leader in the Nigerian sugar industry with about 70 per cent market share and the largest sugar refinery in Sub-Sahara Africa with installed sugar refining capacity of 1.44 million metric tonnes per annum..

Speaking in the same vein, the Director of the company, Abdullahi Sule said clearvision of the company was to grow local and international market.

“Arrangement is currently under to expand “our export horizon beyond Ghana. We are prospecting other countries across the West African Coast. Efforts are in top gear to ensure the refinery expansion projects and the proposed acquisition of Savannah Sugar as part of our backward integration projects are completed this year,” he said.