* Allegation is false, says Dangote Sugar
A major war has been raging in the Nigeria sugar industry for some time now and the bubble seemed to have burst with Dangote’s recent petition to the Federal government asking the Ministry of Trade to shut down BUA Group’s Sugar Refinery in Port Harcourt.
In the letter dated January 28, 2021 signed by Aliko Dangote himself as the Chairman Dangote Industries Limited, the billionaire claimed that when the BUA Sugar refinery was opened, he warned the government and they told him that “no new refinery would be allowed to operate in Nigeria.”
Dangote accused BUA of operating with impunity by contravening the laws as laid down in the National Sugar Policy by selling its products locally instead of producing for export alone.
BUA in its own defence sent to the Minister of Trade however stated that the law allows it to sell within Nigeria.
BUA also argued that Dangote Goup and the other major player have not been involved in any backward integration project, rather they depend on 80% raw sugar allocation, which is detrimental to the Nigerian economy, in the long term analysis.
It continued that BUA, on the other hand, has been involved in backward integration project with BUA’s Lafiagi Sugar BIP set to be completed in 2022.
Over $250 million is believed to have been spent on the export-focused BUA sugar refinery already and it is also employing over 1,000 Nigerians.
Meanwhile, BUA also noted that at the centre of this fight to force the Federal Government to close BUA Sugar Refinery down is the price war.
Insiders said last year, before Ramadan, sugar sold for around N18,000 per bag. But as Ramadan fasting started the price jumped to N30,000 per bag.
The people had no choice but to buy it because they needed a lot of it during the period. So the manufacturers were smiling to the bank.
BUA group noticed the trend and decided that it had to change. There was no reason to increase the price during Ramadan simply because the demand is high.
Usually the increase happens about one month to commencement of fasting.
When the other manufacturers got across to BUA, Samad Rabiu refused.
They put pressure on him, saying it was the right time to make good money but he put his feet down.
After failing to do that, they petitioned the Federal Government that he was breaking the law by selling sugar locally instead of for export.
A source, however, claimed that already, BUA group has dragged the Trade minister to court, to ensure that the operations of the sugar refinery is not tampered with over attempt by Dangote Group to monopolize the sugar business in Nigeria
Meanwhile, Dangote Sugar has denied that it is muzzling competitors out of the sugar refining business in Nigeria.
The company said: “Dangote Sugar Refinery PLC (DSR) is aware of an online publication claiming that Dangote Sugar Refinery PLC is engaging in price-fixing and is not honestly engaged in any Backward Integration Programme as claimed.
DSR wishes to vehemently refute the allegations and assertions in their entirety as the false allegations are geared at tarnishing the good name and brand of Dangote Sugar Refinery Plc and Dangote Industries Limited.
DSR does not engage in artificial price manipulation of its products, either during the Holy month of Ramadan or at any other time. We have never ever increased price of our food items or commodities during the Holy month of Ramadan in the history of our operations, according to the Group Managing Director, Mr. RavindraSinghvi.
He also added that the Company is socially responsible and considers price-fixing to be unethical. Such allegation is highly mischievous and a calculated attempt to smear the reputation of DSR. DSR can only sadly conclude that the online publication is mischievous and geared at creating some form of undue advantage to some Industry players, he said.
He said that the company began its Backward Integration Programme (BIP) with a 10-year sugar development plan, to produce 1.5 million MT per annum of sugar from locally grown sugarcane. The Project commenced with acquisition of large expanse of land in strategic locations such as Taraba State, Adamawa State and Nasarawa State. To this end, three (3) BIP sugar companies; Dangote Taraba Sugar Limited, Dangote Adamawa Sugar Limited, Nasarawa Sugar Company Limited were incorporated.
The company had commenced rehabilitation and expansion of its Sugar Factory at Numan. Sugarcane planting has also commenced in the two other BIP locations.
DSR has a responsibility to the Government, the good people of Nigeria and the Sugar Industry and all other stakeholders to protect the integrity of the Sugar industry and wishes to assure its stakeholders as follows: It will do all that is necessary to protect the integrity of the Sugar Industry, it is not engaged in price fixingand it encourages healthy competition amongst the players.
DSR highlighted a matter (BUA’s operation of a Sugar refinery in the Free Trade Zone in Port Harcourt, exporting refined sugar into the Custom territory) which may circumvent the National Sugar Master Plan’s (NSMP) framework and jeopardize its objectives by taking advantage of the location of its Port-Harcourt Refinery in the Free Trade Zone.DSR made this notification to the Hon. Minister of Industry, Trade & Investments bona fide, via its letter to the Minister dated January 28, 2021 asking the Minister to investigate the matter.
We believe our action is in line with our responsibility as a major stakeholder to alert the supervising Ministry on activities that would derail the plan of the Federal Government in its drive to self -sufficiency in Sugar under the NSMP.