Dangote: Reduction in Sugar Prices to Benefit Nigerians

Obinna Chima
Dangote Sugar Refinery Plc (DSR) has said that the recent reduction in its sugar prices is for the benefit of Nigerians.
The firm which stated this in a statement yesterday, explained that the move was part of its commitment to the socio-economic growth of the economy.
DSR which was responding to what it described as a “horrendous accusation” that it had reduced sugar prices to a level where it made it difficult for competitors to survive in the industry; insisted that despite its new levy on raw sugar which was effected this month, the business “is still very attractive.”
It explained: “Nigeria is not a sugar producing nation, hence raw sugar that are refined locally are imported from South America. Raw sugar is traded openly on the international commodities market with the prices available for all to verify.
“All existing sugar refineries in Nigeria import their raw sugar from same country in South America. When prices of sugar shot up internationally, we increased prices and charged consumers as much as N9,600 per bag.
“In the last one year, the international prices of raw sugar have dropped from about $0.26 cents to the current price of $0.19 cents per pound. Therefore, in line with DSR’s strategy of passing the benefits of price reduction tour customers, we reduced prices of 50kg sugar bags from N8,900 to N6,600 (Value Added Tax inclusive) with effect from December 16, 2012.”
It revealed that last year, its unaudited financials showed that it recorded net profit of about N11 billion, while it paid the Federal Government a total of N20.25 billion. This it said included: VAT-N8.2 billion, income tax –N5.4 billion, duty/other charges-N5.8 billion and withholding tax of over N800 million.
“In effect, the Federal Government’s income is almost twice our profit. All other sugar refineries in Nigeria are enjoying five years tax holidays at the moment. With our current pricing, our budget for this year will give even a better profit/return to our shareholders and with a corporate tax and other miscellaneous charges of over N22 billion,” it added.
DSR also pointed out that smuggled sugar accounts for over 30 per cent of public consumption, saying that its action had resolved the challenge posed by smuggling. It maintained that it is aggressively working towards implementing the backward integration policy.
Culled: THisday