Dangote Sugar Nigeria Says Illegal Imports Hurt Sales and Profit

(Bloomberg) -- Dangote Sugar Refinery Plc, Nigeria’s biggest grower of the sweetener, said illegal, low-quality imports are putting pressure on its selling price, while a traffic gridlock around its production site in Lagos is hampering delivery to customers.

“Sales and production volumes were constrained’’ in 2018 because of “these challenges,’’ the company said in emailed presentation. It plans to “work with the regulatory agencies to combat smuggled sugar’’ this year, it said.

Although Nigeria banned packaged-sugar imports to protect local industries and diversify the economy, importers take advantage of the nation’s porous borders to bring in the product. Also, traffic jams around the ports of Lagos, which currently handle about 80 percent of shipping activities in the West African nation, hamper distribution.

The company, owned by Africa’s richest man, Aliko Dangote, said revenue dropped 26 percent to 150.4 billion naira ($418 million) in 2018 while net income retreated 44 percent to 22.2 billion naira.

More storage facilities will be built for finished products at Dangote’s refinery this year so it can better optimize its production cycle, which has been hampered by the unavailability of trucks due to the traffic gridlock, it said.

Dangote Sugar gained 1.1 percent to 13.90 naira at the close in Lagos to pare declines this week to 2.1 percent. The stock has retreated 8.9 percent this year compared with a 5.8 percent drop by the 164-member Nigerian Stock Exchange All Share Index.

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editors responsible for this story: Stefania Bianchi at sbianchi10@bloomberg.net, Hilton Shone, Vernon Wessels

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