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Flour Mills of Nigeria has increased its investments in the country’s agricultural sector with a N50 billion sugar production facility in Niger state, as a way of improving the company’s capacity for backward integration and to gradually eliminate the need for importation.
Data provided by the National Sugar Development Council (NSDC) on its website suggests sugar importation cost Nigeria $516 million in 2016, as the country continues to grapple with inability to scale up local production.
The Nigerian Sugar Master Plan (NSMP) noted that while Nigeria belongs to the International Sugar Organization whose member countries numbering 92 (at the time) represent 80 percent of total world sugar production, 81 percent of total world consumption, 64 percent of total sugar exports and 55 percent of sugar imports, the country however, only belongs to the category of sugar importers, where it ranked 4 in 2009. When compared to African neighbours, Nigeria is the least food – secure in terms of sugar as most of them produce substantial proportions of their sugar requirements.
A pre-commissioning fact sheet made available to BusinessDay, revealed that Sunti Golden Sugar Estate (SGSE) Limited is a wholly owned subsidiary of Flour Mills of Nigeria (FMN) Plc, and comprises of a cane production area and sugar factory.
“More than N50 billion has been invested in Sunti so far, making it the largest Agro Allied investment in Nigeria so far,” said the company in its fact sheet.
It added that “SGSE is FMN’s single biggest investment since inception in 1960; its vision for agro-industrial transformation (in Nigeria).”
Designed to have an output of 100,000 tons of sugar annually at full capacity, the facility occupies 15,100 hectares of land with a potential cane area of 5,000 ha out of which 3,000 hectares is currently under cultivation. Majority of the area is enclosed within a 35-kilometer dyke offering flood protection from the River Niger where the Sugar cane is cultivated under irrigation, making it an annual crop, and available for processing year round.
Sadiq Usman, a director in FMN’s Agro-allied division, told BusinessDay by phone, that the project started about eight years ago with the acquisition of land, while actual development commenced five years ago.
The Estate comprising the plantation and the mill is described in the factsheet as FMN’s Backward Integration programme under the National Sugar Master Plan (NSMP), towards the attainment of locally produced and refined sugar. According to FMN, the facility’s official commissioning is a pivotal event in propagating not only the significant investment in the Mill but the company’s growth and backward integration story to all stakeholders.
In 2013, implementation of the Nigerian Sugar Master Plan (NSMP) was started with a goal to effectively end sugar importation within 10 years, when Nigeria should have achieved self-sufficiency. As at last year, however, it was reported that Nigeria has achieved only 40.3 per cent of the target set for attainment by the first half of the 10-year lifespan of the sugar master plan.
It appears many companies are yet to fully take advantage of the opportunities in producing more sugar locally, retaining more of the foreign exchange used for importation, and putting the country in a position to be more elf-sufficient.
The sugar production facility in Mokwa, Niger state, currently employs 3,000 people mainly sourced from the surrounding communities. Once development is completed 10,000 people will be employed. CSR projects have been done installing drains, culverts and roads around host communities, including the 30-kilometer road from Mokwa.
In addition to the Sugar value chain, FMN says it has also embarked on significant backward integration investments in the Cassava/Sorghum/Wheat value chain as well as the Edible Oil (Palm and Soybean) value chains.
CALEB OJEWALE
