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Information Memorandum

Information Memorandum. COMPANY AND BUSINESS OVERVIEW. 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.

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Information Memorandum

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  1. Information Memorandum

  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, Nigeria’s largest port where shipment of raw sugar from Brazil is received • DSR until 2008 was Nigeria’s sole white sugar refiner with a dominant market position • DSR shares were listed on The NSE in on March 12th 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 12th 2007. • 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….. Competitive Advantage Sound growth strategy Attractive macro fundamentals Leading market position • 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 • 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 • Major sugar refiner in Nigeria with 2nd 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) Management Modern manufacturing facilities • State-of-the art technology resulting in lower costs per tonne • Highly scalable, well positioned and efficient infrastructure • Current top management have proven track record and multi-decade experience (average tenure of c.25 years) • Highly motivated and well trained middle management Strong profitability track record 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 • Strong historical refining margin preserved at more than 15% • Highly effective cost management strategy ensuring profitability • EBITDA margins of about 9%

  6. FINANCIAL REVIEW

  7. Results for Year Ended 31 December 2011

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

  9. GROWTH STRATEGY

  10. Our 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 Stated strategy Status Regional expansion • Enter neighbouring African markets • Export to Ghana has commenced. • Major efforts underway to achieve some exports in the current year. Capacity expansion • Production capacity expansion to capture regional and domestic growth • Nigeria plant expansion in progress Vertical integration • Commence vertical integration • Strategic objective to acquire Savannah Sugar • Savannah integration planned for the medium term • Reviewing strategic options Strategy Efficiency • Current production yield at 95%; target of 97% • Conversion of molasses to ethanol • Increase warehouse capacity and stocks • Current Production yield of 95% achieved Product expansion • Diversify distribution chain • Packaged sugar for retail consumers • Retail packaging plant commissioned in 2011 Cost management • Vessel acquisition • Looking for opportunities

  11. Exports and Retail Packaging Plant Exporting into ECOWAS Consumption and imports - ECOWAS • 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 imports1 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 ECOWAS (excl Nigeria) DSR small packaging plant • 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 Potential Markets Consumption per capita (kg) Source: IMF, International Sugar Organisation, DSR management estimates ¹ Excluding Nigeria

  12. Future Outlook Capacity Expansion • 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 Market Expansion • Introduction of new products • - Retail Packaging • * Conversion of molasses to ethanol Product Diversification Improvement in Operating, Selling & Distribution Margins • 100% conversion to gas • Reinforced supply chain management Provide attractive Returns to Stakeholders

  13. THANK YOU

  14. Information Memorandum

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