Sunti Estates remains only greenfield investment producing raw sugar, says Paul Gbededo
…..FMN’s sugar subsidiary showcases efforts under sugar master plan
To support the Federal Government of Nigeria’s import substitution, backward integration and local content development aimed at ensuring food security and a host of other economic benefits, Sunti Golden Sugar Estates, a subsidiary of Flour Mills of Nigeria (FMN) PLC, bought into the policies through its investments in the sugar ecosystem, aligning with Nigeria’s sugar master plan to position itself as an important pillar in Nigeria’s backward integration plan for the agricultural sector.
The government’s Backward Integration Plan (BIP) between 2002 and 2005, Nigeria depended purely on sugar importation, and consumption during the period in question was 11.3 million metric tonnes. The implication was that the country was not only losing $3.4 billion to the importation of sugar but also losing 4,000 jobs as a result. Data from the Nigerian Customs Service (NCS) validated that Nigeria spent an average of N30 billion yearly on the importation of sugar over the last 10 years to meet its requirements.
The Nigerian Sugar Master Plan (NSMP) and FMN’s role
On September 19 2012, the Federal Executive Council (FEC) approved the Nigerian Sugar Master Plan (NSMP) and implementation commenced in January 2013. According to data from the Nigerian Sugar Development Council (NSDC), before 2012, sugar importation accounted for 97 per cent of the total sugar supply in 10 years in Nigeria, with cost implication for the country amounts to N530 billion ($3.4 billion). Among other things, the introduction of the NSMP was expected to attract over $1billion in both local and foreign direct investments and create over 107, 000 direct jobs locally at the initial stage in the next 10 years.
To track compliance and progress, the National Sugar Council is in charge of performance evaluation of the backward integration plans for the three big players (Dangote, FMN, and BUA), as it concerns the goals of the Nigerian sugar master plan. The National Sugar Council works with Sugar Industry Monitoring Group(SIMOG), which is a peer review mechanism comprising Dangote, FMN, and BUA, and Customs, Ministry of Agric, Trade and Investment, Finance (SURMIC), among others.
Performance evaluation criteria include how much land is available to each player to grow sugarcane; land development – building irrigation, dykes, etc.; how much investment is put into mill processing and how much infrastructure is built (community development). Others are how many jobs are created and how much sugar is produced.
FMN subsidiary’s performance
The Sunti Sugar Estate has 17,000 hectares of arable farmland, a sugar mill with a capacity to process 4,500 metric tonnes of sugarcane daily and at full capacity. As of today, 3,000 hectares of sugarcane has been developed and is under pivot, sprinkler and furrow irrigation.
Corporate social responsibility and development.
The company has invested heavily in infrastructure development within its host community. Among them are 398-kilometre road network, including access road from Mokwa, and internal roads connecting local communities; 12 irrigation pumps; four drain pump stations; 33-km flood-protection wall and dykes; 30-km electricity network connecting factory turbines and generators to pump stations; 2-km sealed airstrip and sugarcane nursery.
Over N64 billion has been invested so far in the Sunti Sugar Estates. There are several boreholes providing clean drinking water to about six villages. Three schools have been constructed and sustainably maintained, including funding for salaries of teachers and books. Clinic and healthcare facilities and mosques and church buildings were also constructed, with a police post.
At peak production, the estate provides direct employment for about 10,000 people yearly, and impacts up to 50,000 people indirectly, including 3,000 small-scale out-growers who will be cultivating sugarcane to feed the mill.
At the official take-off of the National Sugar Master Plan (NSMP), three refineries; Dangote Sugar Refinery, BUA Sugar Refinery and Golden Sugar Company were approved as BIP operators and made to sign up to commitments through which their performance in regard to the Federal Government’s Sugar BIP will be measured.
At the end of the first phase of the NSMP covering 2013 to 2016, the overall performance of Golden Sugar Company (FMN) 58%. Commissioned in June 2013, the Golden Sugar Company (a subsidiary of FMN and owner of the Sunti Golden Sugar Estates) owns a state-of-the-art sugar refinery in Niger State. With a production capacity of 750,000 tonnes of sugar, it is one of the largest facilities in Africa producing premium white sugar.
Established in 1960, from a single Flour Mill in the port of Apapa, Flour Mills of Nigeria (FMN) Plc is now a publicly traded, vertically integrated supply chain of food, agro-allied and logistics and support businesses. Wheat milling forms the financial backbone of the company and FMN pioneered flour milling in Nigeria with its 500 metric tonnes per day wheat mill commissioned at Apapa in 1962.
Speaking with the Group Managing Director, Mr. Paul Gbededo at a recent interview, he said “ The FMN Group’s mantra, ‘Feeding the Nation, every day,’ is at the heart of our strategic decisions covering what we produce, how and where our factories are set up, the level of care we put into our products, and how we incorporate host communities into our development plans. Over the last 10 years, FMN PLC has invested more than N150 billion to execute its core business strategy to aid the agricultural sector through backward integration and support the Nigerian government’s goal of attaining food sufficiency.”
“Today, when you look around, I am sure you would agree with me that the socio-economic benefits of such a massive investment, in the rural area of Nigeria, cannot be overemphasized.”He said Sunti Golden Sugar Estate remains the first and only greenfield investment under the National Sugar Master Plan that is currently producing raw sugar.
The Minister of Industry, Trade and Investment, Otunba Niyi Adebayo during a recent working visit to the Sunti investment, said, “As we are all aware, President Buhari made a promise that he will lift 100 million Nigerians out of poverty and that he hopes that can be done over the next 10 years.
“Efforts like this will go a long way in reducing the level of unemployment. Nigeria is working towards being self-sufficient in sugar, we have been able to do it in cement and we are trying to do it in sugar.“As time goes on, we will not import sugar anymore; we will produce more than enough for our use and possibly export. We also want to take advantage of the Africa Developmental Free Trade Area Agreement, so that we can export to other African countries,”
The Chairman of Flour Mills of Nigeria PLC, Mr John Coumantaros, during the official visit of the minister in Niger State on December 12, 2019, said, “On the 13th of March 2018, our President, His Excellency, President Muhammadu Buhari, commissioned this state of the art, fully operational sugar production facility in Nigeria.
“As the President rightly observed then, this investment is central to this administration’s determination to create an inclusive economy, where we grow the food we eat, create jobs for our youth and empowerment for our communities.“We are the most productive BIP, as adjudged by the National Sugar Development Council. As you are aware, Honourable Minister, Sunti Golden Sugar Estates was rated the best performing Sugar BIP under the NSMP with a score of 58%,” he added.
He claimed that Sunti Sugar Estates is till date the most significant investment of a Sugar Backward Integration Project under the Nigeria Sugar Master plan, with over N64 billion.“But we remain committed to investing even more as we pursue the strategic vision of achieving self-sufficiency in the production of sugar in Nigeria. We know that this is attainable, and we are committed to that vision,” he said.