Installed production capacity in four sugar firms is 30 per cent, says Bello

No Comments » February 8th, 2008 posted by // Categories: Chemical Industry in Nigeria




Friday, February 08, 2008              

Installed production capacity in four sugar firms is 30 per cent, says Bello

THE four newly privatized sugar companies are still facing the challenge of rehabilitating the sugar estates acquired as their production level is still only 30 per cent.

Alhaji Usman Bello, the Executive Secretary, National Sugar Development Council (NSDC), told the News Agency of Nigeria (NAN) yesterday in Abuja, that because of the rehabilitation they were not fully operational.

Bello said that the challenge was basically borne out of the time lag between when the companies stopped production and when they were sold to their private owners.

The privatised companies are Savannah Sugar Company, Numan in Adamawa state, Nigerian Sugar Company, Bacita, Kwara, Sunti Sugar Company in Niger state and Lafiaji Sugar Company in Kwara state.

He said that because of the capital intensive nature of the sugar industry, the huge capital required to rehabilitate the sugar estates and the long gestation period, these companies had not fully taken off.

“For example, when Dangote bought the Savannah Sugar Company in 2003, the management went round to buy cane seeds from around the country and even in Sudan before it could start production,” he said.

He said that because of the complete transition from government-owned companies to privately-owned ones, it would take time to complete the transition process and start full production.

Bello noted that for instance, the new owners might not want to retain the former staff and to find the appropriate staff was another challenge for them.

He said the companies would have to find their marketing outlets apart from the challenge of power that they faced like other industries.

“Out of all these, only Savannah, started producing just last season and it is entering its second season.

“And Joseph Dam, the new owners of the Bacita Sugar Company is gearing up for production, Sunti has not started as it is still undergoing rehabilitation, while the privatisation of Lafiaji is still going on,” he said.

According to a BPE report, the four companies were operating well below 50 per cent installed capacity before privatisation.

They were privatised between Dec 2002 and Nov 2007.

Bello also urged the private sector operators to increase investments in the sugar industry because of its potential for massive employment generation.

According to him, worldwide, the sugar industry was perceived as a vehicle for development, particularly in employment generation, after the textile industry.

“Because it is rural based, it gives massive employment generation. For example, the Savannah Sugar Company that produces about 50,000 metric tonnes, employs not less than 6,000 people.

“And if the company increases its production to about 1.2 million metric tonnes , you can imagine the multiplier effect on the economy,” he said.

According to him, all the villages surrounding a sugar estate, wether Bacita in Kwara state or Numan in Adamawa, will enjoy all the social amenities

provided by these companies.

Social amenities such as water supply, electricity, hospitals, schools and employment opportunities would be provided for the communities, he said.

Bello said that countries that Nigeria imports sugar from wether the EU or Brazil, they covertly give subsidies to their farmers and operators, thereby, making the country a dumping ground.

“For example, in India, there are not less than 49 million sugarcane farmers and the empowerment that this teeming farming population gets from the industry cannot be quantified,” he said.

He said in many countries , the policies were tailored in such a way that these investors were protected and this further protects the rural population.

He, therefore, stressed that the fortune of the sugar industry could be turned around through the support of government to increase sugar production.

NAN reports that the NSDC was established by decree 88 of 1993 to promote the development of the sugar sub sector.

The council does this through the provision of guidance on the development of sugar estates and the organisation of sugarcane out grower schemes.

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