Trade Monopoly War: Dangote, Flour Mills, BUA Fight Over Monopoly Of Sugar

Three Nigerian conglomerates – Dangote Group, Flour Mills and BUA Group are currently locked in a bitter war over production and export of sugar.  Chairman of Dangote Group of Companies, Alhaji Aliko Dangote, and Chairman of Flour Mills Nigeria, Mr. John Coumantaros, had on January 28,2021, written the Minister of Industry, Trade and Investment, Niyi Adebayo, accusing BUA’s refinery in Bundu Free Trade Zone in Port Harcourt of undermining the national sugar master plan, NSMP.

BUA Group has fought back at claims by Dangote Industries Limited and Flour Mills of Nigeria that its sugar refinery “poses a threat” to the Nigerian local sugar industry.

The NSMP is a policy road map for sugar production introduced in 2013 to achieve self-sufficiency in sugar production and save foreign exchange on the importation of sugar and ethanol.

In the joint letter, Dangote and Coumantaros alleged that the sugar refinery in Port Harcourt was built with the intention to undermine the NSMP, and asked the minister to investigate the quantity of raw sugar imported by BUA’s sugar refinery, with a view to imposing on the company 60 percent duty and 10 percent levy.

Calling for a fair and discipline implementation of the NSMP by the regulator, the Nigerian Sugar Development Council, NSDC, the duo stated in the letter: “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 2.75 million metric tones to 3.4 million metric tones per annum, or from 170 percent over capacity over last year’s import quota to over 210 percent 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 for local market production.

But responding to a request for information from the trade ministry over the petition, Chairman of the BUA Group, Abdul Samad Rabiu, said his company’s project was governed under the Nigeria Export Processing Zones Authority, NEPZA Act and the Free Zone approved by President Muhammadu Buhari.

Rabiu, who noted that Dangote and Coumantaros were calling to question the authority of the President’s power and the diligence of the trade ministry, said:  “Therefore, 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.’’

Describing the duo as co-conspirators, Rabiu, in his response dated February 11, 2021, said it was 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.”

He said under the NEPZA act, companies were allowed to process and, if they so wished, sell 100 percent of their production in Nigeria with payment of duties based on the current raw materials’ tariffs. “As a matter of fact, Aliko Dangote of Dangote Industries, who is one of the complainants alleging and attacking this approval 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 NEPZ,” he said.

He 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, BIP, was on course through it’s 20,000 hectares Lafiagi Sugar Project encompassing a 10,000tpd sugar mill, 200,000tpa sugar refinery, 20 million litres Ethanol plant and a 35MWpoer plant from Bagasse.

BUA Founder/Chairman, Abdul Samad Rabiu

He said both Dangote and Coumantaros were not happy with the Lafiagi BIP, seeing the level of investment there as well as the Port Harcourt sugar refinery. The refinery employs over 1,000 Nigerians with over $250 million spent on the project.

“As a matter of fact, both players already have 80 percent of raw sugar allocation (Dangote-55%, Flour Mills-25%), without commiserate investment in BIP to actually warrant such allocation,’’ Rabiu added. The company also said it would continue to comply with the obligations of the NSMP and backward integration programme.

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