During the annual general meeting of Dangote Sugar Refinery Plc held on Tuesday, Aliko Dangote, the renowned chairman of Dangote Industries Limited, delivered a discourse shedding light on the formidable obstacles encountered by the conglomerate in the tumultuous year of 2023.
In his assessment, Dangote noted the profound ramifications of the naira devaluation, deeming it as the primary catalyst for significant disruptions across various sectors, particularly the food and beverages industry, within which his company operates.
“The biggest mess created was actually the devaluation of the naira from N460 to N1,400,” lamented Dangote, as he spoke on the widespread challenges faced by companies grappling with the adverse effects of currency fluctuations.
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Expressing concern regarding the dividend payouts for the ongoing fiscal year, Dangote said that many companies, particularly those in the food and beverage sector, were also impacted and would likely be unable to pay dividends.
“You can see almost 97 percent of the companies, especially in food and beverages businesses, none of them will pay dividends this year for sure but, we will try and get out of it as soon as possible,” he said.
However, he reassured shareholders of the organization’s unwavering commitment to surmounting these challenges through proactive measures and strategic initiatives.
“We want to see that at the end of the day, no matter how small, we will be able to pay some dividends, especially if there is a rebound of the naira.
“We are doing whatever it takes to make sure that at the end of the day, we will be paying dividends because if you look at our dividends last year, it was almost 50 percent more so we will try and get out of the mess,” Dangote affirmed.
In 2023, Dangote Group, Nestle Nigeria, and MTN Nigeria, along with four of Nigeria’s most capitalized companies, collectively lost N1.7 trillion due to the depreciation of the naira. Dangote lost $3.61 billion in personal wealth following the devaluation, according to the Bloomberg Billionaires Index.
Dangote, Nascon proposed sugar production merger
Addressing the suspension of the proposed merger involving Dangote Sugar Refinery, Nascon Allied Industries Plc, and Dangote Rice Limited, Dangote attributed the regulatory delay to the operational status of Dangote Rice, a pivotal component of the consolidation. He assured stakeholders of the company’s intention to resubmit the merger proposal once the requisite conditions are met.
“We will reapply for the merger when the time is right,” Dangote assured, signaling the company’s unwavering commitment to strategic partnerships and expansion endeavors.
Furthermore, Dangote shed light on the ambitious trajectory of Dangote Sugar Refinery, outlining plans to revolutionize the sugar industry in Nigeria by eliminating sugar imports by 2028. Emphasizing the enormity of the company’s sugar master plan, Dangote reiterated the need for domestic sugar production and the adoption of backward integration strategies to enhance stability and mitigate currency exchange risks.
“The sugar master plan we are now taking is very, very serious,” Dangote asserted, underlining the pivotal role of backward integration in securing the company’s future prosperity.
“By the grace of God, in the next four years maximum, our company should be producing what we are selling currently, all domestic, 100 percent domestic,” Dangote declared, projecting a future characterized by self-sufficiency and sustainability.
However, Dangote clarified that any potential sugar imports would serve as a supplementary measure to bolster the company’s domestic production capacity, reaffirming its commitment to supporting local industries and fostering economic growth.
Amidst the challenges and uncertainties, shareholders expressed unwavering confidence in Dangote Sugar Refinery’s strategic vision and steadfast leadership, pledging their continued support as the company embarks on its transformative journey to reshape the landscape of the Nigerian sugar industry.
Story is too late to cry
Fantastic
What is the benefit of devaluation? Please let economists advise me.
its has no benefit at all
To devalue a local currency,it means that,bcos we are import dependent, we will have to curf out more local currency for a dollar in order to be able to purchase foreign made raw materials, equipments and machinery.
There is benfit in devaluation if the market trends are allowed to function unhinged. The major advantage will be in the the area of economy of scale. Mass local production, reducing price, that will result in high flow of exports. The devaluation, will out compete the prices of similar products in areas, where currencies are not devalued.
Correct, if you produce for export; a disaster if you import your every need.
China has continuously devalued her currency. Have you heard that Chinese people are complaining? Nigeria maybe the only country in the world that every of her citizens wakes up in the morning and the first information they will look for is the exchange rate of Naira and Dollar and/or B. Pound.
CBN does not have enough supply of Dollars to consistently control its exchange rate by flooding the market with dollars. Whenever CBN is unable to increase the supply of dollars then the exchange goes thru the roof. The country should concentrate and pursue local production policies and implement only universal known methods for exchange rate control.
Until we as a country position ourselves to be productive in a competitive manner with the world, we will continue to have these issues. The weakness of the Naira is predicated on our lack of exports and general lack of productivity. Our imports consumption culture is as a result of poor infrastructure such as lack of power, roads and other infrastructure that supports cost effective movement of goods and services. Lack of power also lends itself to lack of ability to manufacture at a competitive cost; in short, it’s cheaper to import. This all stems from wanton corruption. When we are ready to be serious, we all will know.