NIGERIA’S three major sugar companies are involved in a major trade spat with Dangote Group and Flour Mills Nigeria asking the federal government to check the activities of the BUA Group as it was undermining the national sugar master plan (NSMP).
In 2018, the federal government directed the National Sugar Development Council to develop a road map for the attainment of self-sufficiency in sugar, prompting it to come up with the NSMP. Nigeria’s demand for sugar is about 1.7m tonnes, dwarfing local production of just 15,000 tonnes.
Under the NSMP, imports were to be curtailed and local production expanded with about 250,000 hectares of land converted into sugarcane cultivation over 10 years. Flour Mills of Nigeria for instance had its N50bn Sunti Golden Sugar Estate, comprising of16,000 hectares of irrigable farmland and a sugar mill that processes 4,500 tonnes per day in Mokwa, Niger State, inaugurated by President Muhammadu Buhari.
Owned by Alhaji Abdulsamad Rabiu, Nigeria’s third richest man, the BUA Group currently has two ultra-modern and automated mega sugar refineries that utilises state-of-art equipment to refine high quality products for consumption and industrial uses. It is the only sugar refiner to have refining capabilities outside Lagos with a total installed refining capacity of 1.44m tonnes per annum.
However, BUA imports raw sugarcane into the country to refine and this has irked its competitors, who see the practise as undermining their attempts to support local producers to expand production. As a result, Alhaji Aliko Dangote, the chairman of the Dangote Group and John Coumantaros, the chairman of Flour Mills, have written to Niyi Adebayo, Nigeria’s minister of industry, trade and investment, asking him to checkmate the activities of the BUA Group.
In their letter, they pointed out that BUA’s refinery in Bundu Free Trade Zone in Port Harcourt is undermining the NSMP. In the joint letter, Alhaji Dangote and Mr Coumantaros asked the minister to investigate the quantity of raw sugar imported by BUA’s sugar refinery, with a view to imposing a 60% import duty and a 10% levy on it.
Their letter read: “Publicly available information suggests that BUA International, one of the players in the sugar industry, has commissioned a sugar plant in Port Harcourt, Rivers State. With the new refinery, the country’s refining capacity goes from 2.75m tonnes to 3.4m tonnes per annum, or from 170% over-capacity over last year’s import quota to over 210% capacity.
“This investment in the Port Harcourt refinery was clearly done with the intention to undermine the NSMP. We are particularly surprised by the brazenness as we believe that the choice of location and the publicity campaign behind the investment has been deliberately engineered to provoke public sentiment and put the Federal Republic of Nigeria against its people.”
They also asked the ministry to ensure that no additional allocation of quota was given for raw, very high polarity sugar or refined sugar for the refinery in Port Harcourt. Responding to a request for information from the trade ministry over the petition, Alhaji Rabiu, said his company’s project was governed under the Nigeria Export Processing Zones Authority (Nepza) Act and the Free Zone approved by President Buhari.
Alhaji Rabiu, said: “We see this as an affront to the powers of the president and an attempt to undermine Nigeria and its institutions as well as edge out competition, to gain a monopoly that holds the country to ransom. It is a well-known fact in Nigeria and anywhere in the world that wherever Dangote is operating in any sector or business, he seeks to muscle out competition through any means necessary and this scenario is playing out again in this case.
“It is, however, strange that his current co-conspirator, John Coumantaros, a Greek/American national, was once a victim of Dangote’s. They are only just acting as friends in connivance because of their interest to push out competition and create a monopoly for themselves.”
According to Alhaji Rabiu, under the NEPZA act, companies were allowed to process and if they so wished, sell 100% of their production in Nigeria with the payment of duties based on the current raw materials’ tariffs. He added that as a matter of fact, Aliko Dangote of Dangote Industries, has also applied and obtained the same approval for his refinery project in Lekki, Lagos State, where he is currently enjoying the benefit of the being in an NEPZA.
Alhaji Rabiu said his sugar refinery in Port Harcourt was mainly for export, rather than the Nigerian market, adding that it was doing everything possible to ensure that its backward integration programme was on course. This integration programme includes a 20,000 hectares Lafiagi Sugar Project, a 10,000 tonne per day sugar mill, a 200,000 tonne sugar refinery, a 20m litre ethanol plant and a 35MW power plant.
Dismissing the complaint, Alhaji Rabiu said both Alhaji Dangote and Mr Coumantaros were not happy with the Lafiagi backward integration programme seeing the level of investment there as well as the Port Harcourt sugar refinery. He added that the refinery employs over 1,000 Nigerians with over $250m spent on the project.
Alhaji Rabiu added: “As a matter of fact, both players already have 80% of the raw sugar allocation (Dangote 55% and Flour Mills-25%), without any commensurate investment in a backward integration programme to actually warrant such allocation. We will continue to comply with the obligations of the NSMP and backward integration programme.”