Crusoe Osagie
23 October 2008
Lagos — Importers of refined sugar into Nigeria may soon be forced out of business by stiff competition from locally refined sugar, the Chairman of BUA Group, Alhaji Abdulsamad Rabiu has said.
Rabiu who gave the hint in Lagos yesterday at the unveiling of the group's 700,000 per annum capacitysugar refinery said the rising capacity of local sugar refining may soon force importers of fully processed sugar out of business.
He explained that by processing sugar locally, hiscompany saves a third of the total cost of bringing in completely refined sugar therefore having a huge competitive edge over sugar merchants who do not add any value locally.
"By next year there may be no need for the importation of refined sugar into the country because it will not be profitable business. When you import raw sugar and process locally, you save one-third of the cost of importing refined sugar," he said.
"Sugar is a commodity that is used by everybody and so the demand is there. There has been a refinery in Nigeria operated by another company and now, with our refinery coming on stream, importation is certainly going to drop sharply," he added.
He however stated that the price of sugar will be largely dependent on the international price of the commodity. He said the price of sugar is going down at the moment because of the low prices in the international market.
The BUA boss also stated that by processing sugar locally, his company along with the other local sugar refineries save the country foreign exchange up to the tune of $500 million annually.
He said the sugar refinery which was completed in about three years was executed on budget because at the inception of the construction, the group opened a letter of credit which covered almost 100 percent of the cost of the project.
He explained that that way the escalation of the price of steel which followed thereafter did not affect the cost of the project.
The refinery, which is designed to process 2000 tonnes of sugar daily is currently working at about 60percent installed capacity with a plan to raise thecapacity to the maximum 100 percent capacity byDecember.
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