Home Nigeria Rabiu explodes at Aliko Dangote’s moves against BUA’s sugar factory.

Rabiu explodes at Aliko Dangote’s moves against BUA’s sugar factory.

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Aliko Dangote
Aliko Dangote

Gift Joseph Okpakorese

The chairman BUA group, Abdulsamad Rabiu has fought back at the complaint contained in a joint letter by Chairman Dangote Group, Aliko Dangote, and John Coumantaros, chairman of Flour Mills of Nigeria, claiming that BUA’s new sugar refinery in Port Harcourt, Rivers state, is going against the National Sugar Master Plan (NSMP).

Abdulsamad Rabiu is the founder of BUA Group, a Nigerian conglomerate active in cement production, sugar refining, and real estate. In early January 2020, Rabiu merged his privately-owned Obu Cement company with listed firm Cement Company of Northern Nigeria Plc.

Meanwhile, Aliko Dangote Industries Limited is owned by Nigerian billionaire business mogul Aliko Dangote GCON. He is the wealthiest person in Africa, with an estimated net worth of US$13.5 billion (July 2020).

Both companies have been having confrontations with each other regarding a sugar refining plant located in Rivers State by the BUA Group. A letter by the Dangote Group and Flour Mills of Nigeria chairmen said that BUA’s sugar refinery “poses a threat” to the Nigerian local sugar industry.

The joint letter was written to the minister of industry, trade, and investment, Niyi Adebayo, against BUA’s refinery in Bundu Free Trade Zone, Port Harcourt, Rivers State.

They both enjoined the minister to investigate the quantity of raw sugar imported by BUA’s sugar refinery and that the “appropriate penalty in terms of duty at 60 percent and 10 percent levy be imposed on the company”.

They called for the fair and disciplined implementation of the NSMP by the Nigerian Sugar Development Council (NSDC) — the regulator.

The letter went on:

“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 done 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.”

The letter concluded with a suggestion to the ministry to guarantee that no extra quota is given for coarse, very high polarity sugar (VHP) or refined sugar for the refinery in Port Harcourt, ror local market production.

The Dangote Group and Flour Mills of Nigeria are two of the biggest players in the Nigerian sugar market.

Recall that 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 his response to the invitation to explain to the trade ministry, information contained in the petition, Abdulsamad Rabiu remarked that its project is governed under the Nigeria Export Processing Zones Authority (NEPZA) Act and in the Free Zone approved by President Muhammadu Buhari.

The BUA Group chairman further remarked that in Nigeria and globally, it has been observed that, wherever Dangote is operating in any sector or business, he seeks to out-muscle competition through any means necessary” and “this scenario is playing out again in this case”.

Rabiu also accused Dangote and Coumantaros of challenging the “authority of the president’s power and the diligence of the trade ministry”.

He wrote: “It is however strange that his current co-conspirator, John Coumantaros, a Greek/American national, was once a victim of Dangote’s. If we recall, he experienced similar issues at the hands of his co-conspirator which subsequently led to his arrest alongside his elderly father by the EFCC.

“They were detained for over a week because he decided to [do] cement business through UNICEM. In the end, the Coumantaros had to sell their business to save themselves. This is also a matter of public record. They are only just acting as friends in connivance because of their interest to push out the competition and create a monopoly for themselves.”

Rabiu opined that under the NEPZA act, companies are allowed to process and, if they so wish, sell 100 percent of their production in Nigeria with payment of duties based on the current raw materials tariffs.

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 being in a NEPZ,” he wrote.

The BUA company has said the sugar refinery in Port Harcourt is mainly for export rather than for the Nigerian market.

It affirmed that it is doing all within its power to ensure that its backward integration program (BIP) is on course through the company’s 20,000 hectares Lafiagi Sugar Project comprising a 10,000tpd sugar mill, 200,000tpa sugar refinery, 20 million liters Ethanol plant, and a 35MW power plant from Bagasse.

He said that both Dangote and Coumantaros are not happy with the Lafiagi BIP seeing the level of investment there as well as the Port Harcourt sugar refinery.

He also disclosed that the refinery employs over 1,000 Nigerians with over $250 million spent on the project.

“Both players already 80 percent of the raw sugar allocation (Dangote-55%, Flour Mills-25%), without commiserate investment in BIP to warrant such allocation.”

 

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