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COMPANY AND BUSINESS OVERVIEW Company Overview Dangote Sugar Refinery Company Plc (DSR) commenced operations as a sugar refinery in March 2000 The plant.

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Presentation on theme: "COMPANY AND BUSINESS OVERVIEW Company Overview Dangote Sugar Refinery Company Plc (DSR) commenced operations as a sugar refinery in March 2000 The plant."— Presentation transcript:

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2 COMPANY AND BUSINESS OVERVIEW

3 Company Overview Dangote Sugar Refinery Company Plc (DSR) commenced operations as a sugar refinery in March 2000 The plant was commissioned in 2001 with an initial capacity of 600,000 MT p.a. Now one of the largest refineries in the world with a capacity of 1.44 million MT p.a Refinery is located in Lagos, Nigerias largest port where shipment of raw sugar from Brazil is received DSR until 2008 was Nigerias sole white sugar refiner with a dominant market position DSR shares were listed on The NSE in on March 12 th 2007 at a price of N18 per share after a successful IPO which opened in November 2006, at N18 per 50 kobo ordinary share and listed on March 12 th Board Alhaji Aliko Dangote – Chairman Engr. Abdullahi Sule - MD Dr. Konyinsola Ajayi (SAN) Mr. Olakunle Alake Alhaji Sani Dangote Alhaji Abdul Garba Dantata Ms Bennedikter China Molokwu Mr. Uzoma Nwankwo Mr. Suleiman Olarinde Management Mr. Maryoud Elsunni, ED – Engineering & Operations (over 30 years of experience) Engr. Ogunwale, General Manager Refinery (26 years experience in engineering) Mr Okoh, Head of Processing (16 years experience in manufacturing)

4 Business Overview Leading in the Sugar Refinery business in sub-Saharan Africa. Delivering on the strategy: Retail packaging plant. Staff incentivisation programme Positive long term outlook on the back of expansion plan

5 Competitive Advantage….. Management Current top management have proven track record and multi- decade experience (average tenure of c.25 years) Highly motivated and well trained middle management Modern manufacturing facilities State-of-the art technology resulting in lower costs per tonne Highly scalable, well positioned and efficient infrastructure Attractive macro fundamentals Favourable macro-economic environment for investments Strong sugar market fundamentals characterised by potential upside of current low consumption per capita and increasing demand for sugar High cash conversion Highly cash generative business with approx. 80% cash conversion Prudent and timely expansion strategy Historically favourable tax incentive structure due to pioneer status Leading market position Major sugar refiner in Nigeria with 2 nd largest refining capacity in the world Strong overall market share with highly diversified customer base High operational, structural and financial barriers to entry (regulatory environment) Sound growth strategy Clearly defined strategy to maintain leadership position in domestic and regional market Strategic objective to initiate regional export plan, backward integration of upstream sugar and increase penetration as supplier to niche markets i.e. users of molasses, makers of biofuels etc Strong profitability track record Strong historical refining margin preserved at more than 15% Highly effective cost management strategy ensuring profitability EBITDA margins of about 9% Competitive Advantage

6 FINANCIAL REVIEW

7 Results for Year Ended 31 December 2011

8 RESULT FOR THE 1 ST QUARTER ENDED 31 ST MARCH Results for the Period Ended 31 March 2012

9 GROWTH STRATEGY

10 Product expansion Diversify distribution chain Packaged sugar for retail consumers Regional expansion Enter neighbouring African markets Export to Ghana has commenced. Vertical integration Commence vertical integration Strategic objective to acquire Savannah Sugar Current production yield at 95%; target of 97% Conversion of molasses to ethanol Increase warehouse capacity and stocks Efficiency Capacity expansion Production capacity expansion to capture regional and domestic growth Strategy To be among the leading integrated low cost sugar producers in the world by doubling production capacity, with strong domestic and regional African presence and increasingly international focus Goal Cost management Vessel acquisition Retail packaging plant commissioned in 2011 Major efforts underway to achieve some exports in the current year. Savannah integration planned for the medium term Reviewing strategic options Current Production yield of 95% achieved Nigeria plant expansion in progress Looking for opportunities Stated strategyStatus Our Growth Strategy

11 First shipment of 1,500 MT sugar to Ghana in December 2007 Benefit from Nigerian export promotion council incentive Benefit from tariff agreements within the ECOWAS zone Region imports 1 total of 1.0 mm MT due to lack of production facilities Strategic location of refinery in Apapa port Strong potential for growth on the back of low consumption per capita and growing middle class Consumption per capita (kg) Source: IMF, International Sugar Organisation, DSR management estimates ¹ Excluding Nigeria ECOWAS (excl Nigeria) Potential Markets Retail packaging plant commissioned in 2011 Target retail market through distributors with small packs of 250g, 500g and 1.0kg branded Dangote Leverage Dangote brand at no additional costs through existing management contract CapEx of approximately US$7 million Positive impact on margins given further penetration of value chain at minimal costs Consumption and imports - ECOWAS Exporting into ECOWAS DSR small packaging plant Exports and Retail Packaging Plant

12 Capacity Expansion Market Expansion Product Diversification Improvement in Operating, Selling & Distribution Margins Provide attractive Returns to Stakeholders 75% capacity increase from 1.44 million MT to 2.5 million MT on-going Boost revenue growth Export market potential within Africa Trading Offices set up in Senegal & Ghana Planning at advanced stage for Liberia and other countries Introduction of new products - Retail Packaging * Conversion of molasses to ethanol 100% conversion to gas Reinforced supply chain management Future Outlook

13 THANK YOU

14 Information Memorandum


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