Special incentives for sugar producers underway

By The Rainbow

The Federal Government of Nigeria has said it will provide special incentives for investors in the sugar industry, especially those that have keyed into government's Backward Integration Policy in the sector.

According to Aganga,  the incentives will be similar to what was given to investors who keyed into government's  Backward Integration Policy in the cement industry.

The Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, who made this known on Saturday, during an assessment tour of existing facilities of major sugar refineries in Lagos, on Saturday, said that the move would help the country to achieve self sufficiency in sugar production for both domestic consumption and  export.

He visited Dangote Sugar Refinery, BUA Sugar Refinery and Golden Sugar Refinery all in Lagos.

Aganga said the government was fully aware that the processes of optimizing the whole value chain in terms of moving from sugarcane to sugar, take quite some time and require huge investment.

He said, 'That is why we have asked the operators of sugar refineries to provide us with their strategic and detailed action plans on backward integration in terms of what they want to do in 2013, 2014, 2015 and 2016. In addition, we want to see the practical demonstration of their commitment to the implementation of the policy.

'So, based on their demonstration of commitment to those things in their backward integration plans as it relates to moving from sugar cane to sugar production, we will give them special incentives. This is similar to what we did  during the implementation of the Backward Integration  Policy in the cement sector until we got to the point where we saw a significant increase in local cement production and we tied importation to production to bridge gap between supply and demand.

'By so doing, local production increased and importation was reduced drastically. That was how were able to move from a country that was producing about two million metric tons of sugar to a country that has the capacity to produce 28.6 million metric tons of cement. It is the same principle and approach that we want to apply in the sugar sector.'

Aganga said  the development of the National Sugar Master Plan by the National Sugar Development Council, had opened the sector for fresh local and foreign investments, adding that the Ministry of Industry, Trade and Investment was committed to working  together with the state governments and the private sector to ensure the successful implementation of the Backward Integration Policy in the sugar industry.

He said:  'The new sugar policy has opened up the sector for new investors to come in  to invest in the sugarcane to sugar value chain .Currently, we have a number of  interested investors from Brazil that are partnering with local investors and we already two new green fields in addition to other interested investors that are doing their feasibility studies. This shows that the implementation of our policy of Backward Integration in the sugar is gaining momentum, and is in the right direction.

'Currently, Nigeria produces only about three per cent of our local demand but our objective is not only to achieve self-sufficiency in sugar production but to become a major exporter in the global market. But most importantly, I want to see more commitment of the part of Sugar companies in terms of aggressive implementation of our Backward Integration Policy for the sector which entails moving up in the entire value chain from sugarcane to sugar, production of ethanol and generation of power, among other things. We will do everything possible to assist them to succeed because they are very critical for job creation, revenue generation and economic diversification.'

In the minister's opinion, the successful implementation of the Backward Integration Policy in the sugar industry will unlock the potentials of the sector in terms of job creation, and wealth generation, stressed that the Federal Government was committed to providing the enabling environment for the growth and development of the manufacturing sector in line with the Nigeria Industrial Revolution Plan.

His words,  'If we successfully implement our Backward Integration Programme, which is a very important component of the National Sugar Master Plan developed by the Ministry of Industry Trade and Investment , the sugar sector will be able to create more than 20 times the number of jobs they have already created. Today, an average sugar refinery employs about 1, 400 people but if the Backward Integration Policy is well implemented, they can employ an average of about 100,000 people.

'This is what makes sugar sector different from other sectors of the economy. It is in recognition of the importance of the sector that the government has introduced the Backward Integration Policy for the sector. But for the policy to be successful, we all have to work today as partners. Our job is to make sure that we create the enabling environment for them to do well through consistent manufacturing friendly policies.