The battle between Dangote Sugar and the BUA Sugar refinery has taken one other flip as each events have refused to again down.
The Chairman of Dangote Industries Ltd, Alinko Dangote had in January 2021, petitioned the Federal Authorities asking the Ministry of Commerce to close down BUA Group’s Sugar Refinery situated in Port Harcourt.
BUA refinery which was hitherto producing for export into different nations, was accused by the billionaire businessman of working with impunity by contravening the legal guidelines as laid down within the Nationwide sugar coverage, stating that the corporate was not permitted to promote its merchandise domestically.
The Chairman, Dangote Industries Restricted, Alhaji Aliko Dangote, alongside Chairman, Flour Mills of Nigeria Plc, Mr. John Coumantaros, have stated the institution of a brand new sugar refinery plant within the nation poses a risk to the attainment of the Nationwide Sugar Grasp Plan (NSMP) in addition to sustainability of the nation’s native sugar trade.
They argued that the nation at the moment had sufficient refining capability to satisfy nationwide demand.
In a joint petition to the Minister of Trade, Commerce and Funding, Niyi Adebayo, dated January 28, 2021, the duo protested the current commissioning of a sugar refinery in Port- Harcourt, Rivers State, which is reportedly owned by BUA Worldwide, one of many operators within the sugar trade.
Nonetheless, within the ensuing row among the many main gamers within the trade, Chairman, BUA Group, Alhaji Abdulsamad Rabiu, stated his funding in Port Harcourt didn’t in any means pose a risk to the nation’s sugar coverage, including that it’s going to slightly checkmate arbitrary value improve by the most important gamers amongst different advantages to the nation.
Nonetheless, within the letter to the minister, Dangote and his counterpart in Flour Mills, argued that that they had in 2019, warned concerning the danger of building a brand new refinery, including that they acquired assurances that according to the federal authorities’s coverage on Backward Integration Programme (BIP), “no new refinery will probably be allowed to function in Nigeria”.
Additionally they identified {that a} great quantity of labor was required by all stakeholders to attain the meant goal behind the sugar coverage, which is to amongst different issues, encourage backward integration to finally attain self-sufficiency in native sugar manufacturing.
They recalled that beneath the revised pointers launched by the Nationwide Sugar Growth Council (NSDC), it was made completely clear that the allocation of quotas henceforth shall be on quantitative and verifiable enhancements within the BIP of operators within the trade.
The petitioners alleged that the midterm evaluation carried out by the NSDC had concluded that BUA had “failed to take a position considerably in native manufacturing or adjust to its undertakings beneath its BIP.
“Even earlier than its surreptitious funding in further refining capability, Nigeria already has sufficient refining capability to fulfill demand immediately effectively into the long run.”
The petitioners maintained that the enterprise logic behind the funding in new refinery was clearly faulty including that, “BUA intends solely on importing and refining uncooked sugar while claiming to be investing in creating sugar plantations to be able to qualify for quotas to import uncooked sugar”.
They additional alleged that the Port Harcourt refinery was clearly undertaken to intentionally undermine the federal authorities’s sugar coverage.
“We’re notably stunned by the brazenness as we imagine that the selection of location and the publicity marketing campaign behind the funding has been intentionally engineered to impress public sentiment and pit the federal authorities in opposition to its individuals,” the petition added.
It stated until the ministry of trade, commerce and funding performs an efficient policing function of the NSMP, the nation’s dream of changing into self-sufficient and certainly a internet expoter of sugar can be defeated.
“The impunity with which BUA has contravened the provisions of the NSMP has positioned the opposite gamers who’re abiding by the rules, not solely at a big drawback however has discouraged them from endeavor the massive investments that will ship the specified goal of 100 per cent native manufacturing of sugar, until, after all, the ministry wades in and addresses the state of affairs,” it added.
Consequently, in a letter issued by Adebayo, dated February 10, 2021, which was addressed to the Chairman, BUA Group, Alhaji Abdulsamad Rabiu, following the petition by Dangote, the minister had requested detailed info on the BUA Sugar Refinery in Port Harcourt, notably the corporate’s plan to service the Nigerian and export markets from its refineries.
BUA, in its response to the minister, dated February 11, 2021, nevertheless, took “critical exception to the ludicrous claims by its two main rivals that it goals to bypass the BIP of the sugar trade”.
In the meantime, the BUA refinery which has employed over 1,000 Nigerians, subsequently revealed that the centre of the combat to pressure FG to shut BUA Sugar refinery down is the value battle as its product is perceived to be a risk to the opposite firm.
In its defence despatched to the Honourable Minister of Commerce, Mr Adeniyi Adebayo, BUA revealed that in 2020, earlier than Ramadan, sugar was offered for round 18,000 Naira per bag, however because the Ramadan fasting started, the value skyrocketed to 30,000 per bag.
In line with the refinery, the rise in sugar value through the Ramadan and different festive intervals by the Dangote firm was unnecessary.
BUA accused Dangote of exploiting Nigerians by rising the value of his merchandise notably when its been wanted and other people don’t have any alternative than to patronise.
The refinery said that Dangote’s petition got here after it had refused to succumb to their strain to extend its value.
It was additionally gathered that BUA group has dragged the Commerce Minister to court docket in a bid to avert any illegal motion in opposition to the refinery as demanded by the Africa’s richest businessman.
BUA vowed to frustrate the alleged resolution by the Dangote group to monopolize Sugar commerce within the nation.
The corporate identified in its five-page response, that it was unreasonable for it to be working in opposition to the backward integration coverage of the trade, having invested billions of naira within the initiative which is nearly nearing completion.
Rabiu, particularly assured that its sugar export centered challenge in Port Harcourt, won’t have an effect on in any means, the backward integration programme including that “the one means it’s going to have an effect on Nigerians is that Nigerians can pay decrease costs for sugar”.
He defined that although the Port Harcourt refinery is principally for exports, BUA is allowed beneath the Nigeria Export Processing Zones Authority (NEPZA)
Act and present approvals/guidelines to intervene domestically to be able to stabilise sugar value, “the place it’s completely necessary- within the face of arbitrary value will increase and collusion to pressure shortage of the product domestically”.
He stated:”The identical NEPZA Act upon which this challenge relies, offers the permission to course of, add worth, and export on the identical time. Corporations beneath this act are allowed to course of and in the event that they so want, promote 100 per cent of their manufacturing in Nigeria with fee of duties primarily based on the present uncooked supplies tariff.
“As a matter of reality, Aliko Dangote of Dangote Industries, who is likely one of the complainants alleging and attacking to this approval has additionally utilized and obtained the identical approval for his refinery challenge in Lekki, Lagos State the place he’s at the moment having fun with the identical advantages of being in an Export Processing Zone (EPZ).”
He added:”What BUA sugar is doing is authorized and throughout the confines of the legislation. We’ve not finished nor are we doing something fallacious.”
Rabiu, additional defined that the EPZ beneath which its Port Harcourt sugar challenge is sited went by a rigorous two-year evaluate course of earlier than being forwarded to the ministry for approval of President Muhammadu Buhari, including that solely the president alone is constitutionally empowered to approve an EPZ license.”
In line with the BUA Group Chairman:”Something that’s finished to assault this challenge in any means, kind or any guise, assaults Mr. President’s approval and we’ll do all the things to make sure our rights will not be trampled upon.”
He stated BUA’s Lafiagi BIP is on observe to be accomplished by the tip of the yr in addition to begin manufacturing by the tip of 2022.
Rabiu, additionally warned that any motion that tampers with the present approval is able to eroding buyers confidence beneath the EPZ.
He disclosed that the corporate had spent over $250 million on the Port Harcourt challenge which at the moment employs over 1,000 Nigerians and has important financial impression.
He stated:”To attempt to shut it down or stifle its operations will value jobs and misplaced financial impression.”
He added that BUA remained the one firm of the three dominant gamers, spending critical cash and in search of to finish its BIP challenge by 2022, stressing that,” we have to begin asking agency, laborious questions of the 2 different gamers”.
The letter, nevertheless, urged the minister to stay agency and resolute within the discharge of his duties as he had at all times finished, including that BUA remained dedicated to its obligations relating to the BIP and the NSMP.
He stated “we imagine that point has come to name all gamers to true account”.
