Backward integration in Sugar devt attracts N250bn investments

Backward Integration Programmes (BIPs) by major investors in the Sugar sector have attracted investments worth over N250 billion amid rising prospects, according to the National Sugar Development Council (NSDC).

The Council attributed such high yields to the Federal Government’s National Sugar Master Plan (NSMP), a 10-year blueprint designed to revitalize the sector and make Nigeria a net exporter of the commodity.

Elaborating on the investments, The Executive Secretary, National Sugar Development Council (NSDC), Zacch Adedeji, said the KIA Group has joined other players like the Dangote Group, BUA Group, and the Flour Mills to drive backward integration in sugar development.

According to him, KIA Group Africa has completed the process of acquiring the defunct Nigeria Sugar Company (NISUCO) in Bacita, Kwara State, and has since commenced work, where it plans to produce about 300,000 metric tonnes (MTt) of sugarcane, refining an estimated 204,000MT, and targeted revenue of up to N46billion 2027.

Furthermore, he said about 20,000 employees would be engaged to drive the company towards optimum production to boost Nigeria’s economic growth.

Aside from KIA, Adedeji disclosed Flour Mills has also signed a multi-millionaire agreement with the Nasarawa State Government to build a factory in Toto Council Area. The new project is in addition to the company’s N50 billion Golden Sugar Estates in Sunti, Niger State, which was inaugurated in 2018 by President Muhammadu Buhari.

Sugar value chain

Amid the quest for energy transition, sugarcane as a bioenergy is seen to hold significant potential for biofuel (ethanol) and electricity production.

To this end, the National Sugar Master Plan seeks to make Nigeria become self-sufficient in sugar production, create direct and indirect jobs, generate electricity, become a notable global sugar producer as well as produce ethanol for industrial use and utilization.

Indeed, a Terminal Evaluation Report conducted by the United Nations Development Programme (UNDP) on Brazil’s Sugarcane Renewable Energy (SUCRE), last year, showed that Sugarcane biomass had increased from 4% to 7% of Brazil’s total electricity from 2010 to 2020.  It added that with the current installed capacity, SUCRE projects that optimal utilization of sugarcane biomass (could generate up to 142 terawatt-hour (TWh) yearly.

A year earlier, the International Renewable Energy Agency (IRENA), in its report on Sugarcane Bioenergy in Southern Africa: Economic Potential for Sustainable Scale-up, revealed that if sugar requirements were converted to bioenergy in the region, some 1.4 billion litres of ethanol could be produced at an average cost of $0.71 (71 cents) per litre of gasoline equivalent.

Besides, it noted that most of the ethanol could compete with gasoline at a crude oil price below $90/barrel, close to midcase projections by the US Energy Information Administration for 2030 (EIA, 2018); while the electricity would cost around $0.062 per kilowatt-hour (kWh).

Without a doubt, the sector has, even amidst natural and man-made challenges, recorded some milestones, especially as it relates to attracting genuine and profitable investments to the once moribund sugar industry.

Backward integration

To solve the issue of land acquisition for cultivation programmes, Adedeji said the Sugar Council recently convened a roundtable meeting comprising critical stakeholders to deliberate and share perspectives on challenges associated with the importation of equipment and machineries by some operators.

He explained that the meeting brought together stakeholders from the Nigeria Customs Service, Federal Ministry of Finance, and the Central Bank of Nigeria (CBN) as well as members of the organized private sector. Participants deliberated and adopted modest and cost-effective measures that would address the concerns of both the government and operators.

He said: “We have found a solution to the problem. We now have a body known as the Forum of Sugar Producing States, headed by Governor Abdullahi Sule of Nasarawa State. The body comprises governors across sugar producing belts in the country. Their major role is to help provide land for sugar projects in their respective states, thereby putting an end to frequent clashes arising from land ownership between communities and sugar operators.”

Adedeji, who described backward integration as the engine room of the Sugar Master Plan, expressed the Council’s resolve to replicate refining success in field operations to enhance local production to meet local demand and for export in the future.

“Without a doubt, the sector has, even amidst natural and man-made challenges, recorded some milestones, especially as it relates to attracting genuine and profitable investments to the once moribund sugar industry. We are not going to rest on our oars as an agency of government. We are quite determined and hopeful in our mission to turnaround the fortunes of the sector for the overall benefit of our dear country and citizens,” he concluded.

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