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BUA fires back as Dangote engages company in Sugar war

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.

Aliko Dangote, chairman of Dangote Industries Limited, and John Coumantaros, chairman of Flour Mills of Nigeria, had written a joint letter to the minister of industry, trade and investment accusing BUA’s refinery in Bundu Free Trade Zone, Port Harcourt, Rivers state, of undermining the national sugar master plan (NSMP).

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.

Responding to a request for information from the trade ministry over the petition, Abdul Samad Rabiu, the BUA Group chairman, said its project is governed under the Nigeria Export Processing Zones Authority (NEPZA) Act and the Free Zone approved by President Muhammadu Buhari.

Rabiu said Dangote and Coumantaros are calling to question the “authority of the president’s power and the diligence of the trade ministry”.

“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,” he said.

A RARE JOINT LETTER

Dangote and Coumantaros, in a letter dated January 28, 2021 and addressed to Niyi Adebayo, the minister, alleged that the sugar refinery in Port Harcourt was built with “the intention to undermine the NSMP”.

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

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

“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,” the letter read.

“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 is given for raw, very high polarity sugar (VHP) or refined sugar for the refinery in Port Harcourt for local market production.

THEY ARE ‘CO-CONSPIRATORS’

Rabiu, in his response dated February 11, 2021, said 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”.

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 matter of public record. They are only just acting as friends in connivance because of their interest to push out competition and create a monopoly for themselves.”

LIKE BUNDU, LIKE LEKKI?

Rabiu said 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.

“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 wrote.

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

BUA said it is doing everything possible to ensure that its backward integration programme (BIP) is on course through the company’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.

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.

The refinery employs over 1,000 Nigerians with over $250 million spent on the project.

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

BUA said it will continue to comply with the obligations of the NSMP and backward integration programme.

 

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