Africa Finance Corporation (AFC) has provided the BUA Group with US$200 million corporate credit to construct its vertically integrated sugar milling complex in Lafiagi, Kwara State, Nigeria. The money will go towards the development, construction, commissioning and operations of the Lafiagi Sugar Company (LASUCO).
Lasuco is a first-of-its-kind integrated sugar milling facility in Nigeria, with a 20 000-hectare plantation, a 2 200 000-ton sugar milling plant and a 200 000-ton-per-year sugar refinery, for processing and refining white sugar.
The project will also include an ethanol plant capable of producing 25 million litres of ethanol per year, as well as a 35-megawatt power plant that will generate sustainable energy from bagasse (sugarcane waste). The project would allow extra energy not consumed on site to be sent to the national grid, and it will recycle the majority of its other waste products, including as effluents and vinasse, for irrigation and fertilizer production.
Abdul Samad Rabiu, founder and executive chairman of BUA, said via a statement, “We are pleased to partner with Africa Finance Corporation – a leading multilateral finance institution focused on Africa’s infrastructure and industrial development, on our Lafiagi Sugar Project, which is one of the most ambitious sugar plantation projects in West Africa.
Part of a master plan
By employing indigenous processed cane sugar and through its integrated-out farmers programme, the project will go a long way toward alleviating Nigeria’s existing reliance on imported sugar raws.
The group’s approach is also in accordance with the Sugar Master Plan of the federal government of Nigeria, which stresses backward integration programs for sugar production self-sufficiency.
Over the first ten years, Nigeria’s National Sugar Master Plan (NSMP), which was launched in 2012, was expected to attract over $1 billion in local and foreign direct investments and generate 107 000 employment.
Its goal is to increase local sugar production to help the country achieve self-sufficiency, stop the flow of unfettered imports, generate a large number of jobs, and contribute to the creation of ethanol and energy generation.
In order to do this, it is predicted that the government would need to build 28 sugar plants of various capacities and plant sugarcane on around 250 000 hectares of land during the next ten years.
Private investors are projected to provide the majority of this funding, which requires sugar businesses to engage in sugar growing and increasingly employ locally produced extracts in their refineries, a process known as backward integration.
Samaila Zubairu, president & CEO of AFC said, “We are pleased to support this landmark project which will significantly reduce Nigeria’s sugar import bills, currently estimated at over US$400 million per annum.
“The project should over its useful life, reduce Nigeria’s sugar import bills by approximately US$2B and create about 15 000 direct and indirect jobs that will accelerate development impact in the economy.”
Aside from entering the sugar business, the company has increased its investment in the grain industry, having recently erected a new 720-tonne-per-day pasta processing plant and a flour milling plant with a total milling capacity of 2 400 tons per day.