A trade war has broken amongst major sugar producers in Nigeria with Dangote Group and Flour Mills seeking the withdrawal of operation licence of BUA Sugar refinery in Port Harcourt, Rivers State.
The Chairman of Dangote Industries Limited, Aliko Dangote in a joint petition with the Chairman, Flour Mills Nigeria Limited, Mr. John Coumantaros, claimed that when the BUA Sugar refinery was opened, he warned the government and they told him that no new sugar refinery would be allowed to operate in Nigeria.
They accused BUA, in the petition dated 28th January, 2021 to the Federal Ministry of Trade and Industry, 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.
They therefore asked the Ministry to shut down BUA Group’s Sugar Refinery located in Port Harcourt.
BUA in its own defence sent to the Minister of Trade and Industry clarified issues by stating that the law allows it to sell inside Nigeria.
Attaching the enabling permits and approval BUA stated that because of the connivance of the two major sugar manufacturers to hike the price of Sugar during the Ramadan period, the law allows it to sell locally.
BUA also warned that Dangote Group and the other major player have not been involved in any backward integration project, rather they depend on 80 percent raw sugar allocation which is detrimental to the Nigerian economy in long term analysis.
According to BUA letter signed by its Chairman, Abdul Samad Rabiu, the company on the other hand has been involved in backward integration project with BUA’s Lafiagi Sugar BIP set to be completed in 2022.
Over 250million dollars 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 Federal Government to close BUA Sugar refinery down is the price war.
“Last year, before Ramadan, sugar sold for around 18,000 Naira per bag. But as Ramadan fasting started the price jumped to 30,000 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”, a source stated.
The source also added that “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 all because of the desperate attempt by Dangote Group to monopolize the sugar trade in Nigeria”.
