In a bid to enhance production capacity and further increase its market share, shareholders of Dangote Sugar Refinery Plc (DSR) have given the nod for the formal takeover of Savannah Sugar Company Limited.
Shareholders of DSR during their Extraordinary General Meeting, which was preceded by the 2019 Annual General Meeting, voted in favour of the merger of the two companies as sub-Saharan Africa’s largest sugar refining firm embarked on the next stage of its backward integration plan to revolutionise the sugar sub-sector of the nation’s economy.
The Chairman of the company, Alhaji Aliko Dangote, said the DSR, a top tier player in the industry with an installed capacity to produce 1.44 million metric tones per annum, will be leveraging on the Savannah Sugar’s sugarcane production capacity to enhance its production capacity.
According to Dangote, Savannah Sugar has 32,000 hectares of land available for cultivation of sugar cane as well as milling capacity of 50,000 tonnes of sugar per annum and that upon the merger, further investments would be made to increase SSCL land under cultivation.
Dangote explained that the DSR board considered the merger as fair and reasonable and believed that it would provide strategic opportunities and benefits for the company, employees and other stakeholders as the new company would be operating from the position of increased access to capital and then higher profitability.
He listed some of the benefits of the merger as being to consolidate the assets, intellectual property rights, operations and business dealings of the SSCL into the DSR; eliminate cost inefficiencies arising from duplication of resources and processes and improve the efficiency through more focused management of resources; and position it as the biggest integrated sugar producer in Nigeria.
The Chairman of the Company explained that necessary approvals have been given by all concerned regulatory authorities and the merger would positively alter the sugar sectorial landscape as the Federal Government’s backward integration policy would be better implemented by the company.