Dangote Sugar, Flour Mills, BUA Sugar – And Problems with Nigeria

Dangote Sugar, Flour Mills, BUA Sugar – And Problems with Nigeria

Nollywood makes nice movies but they have not been making ones which go to the heart. Why? Corporate Nigeria makes better movies. The latest episode is that Dangote Sugar and Flour Mills are suing BUA Sugar to get out of the business of running a sugar refinery in Nigeria: “Backed by the Chairman of Flour Mills of Nigeria Plc, Mr. John Coumantaros, Dangote said in a letter sent to the Trade Ministry that the establishment of a new sugar refinery plant in the country poses a threat to the attainment of the National Sugar Master Plan (NSMP) as well as sustainability of the country’s local sugar industry.” You read it well – more supply of sugar will destroy Nigeria!

The BUA Group said the Dangote Group and Flour Mill have not been involved in any backward integration project, rather, they depend on 80% raw sugar allocation which is detrimental to the Nigerian economy in long term. The company said unlike the petitioners, it has been working on backward integration project with BUA’s Lafiagi Sugar BIP, a $250 million sugar refinery set to be completed in 2022.

This Day reported Rabiu, specifically assuring that its sugar export focused project in Port Harcourt, will not affect in any way, the backward integration programme adding that “the only way it will affect Nigerians is that Nigerians will pay lower prices for sugar”.

As a village boy, it was always a happy moment when you put your St. Louis sugar inside your Lipton tea with Ezioma bread ready by the side. It was not luxury because everyone had his or her own big loaf. Ezioma bread was made in Ovim as our industrialists always find a way to take care of home. Then on the big Oriendu Market (every 8 days), Our Society Bread would come from Enugu. That one was always softer – and made by Chief FOC Umunna, the Udo I of Ovum, and one of the men who built Enugu industries. Life was great – yafuyafu even for village kids.

But today, from sugar to bread, everything is a luxury. And yet people are filing court cases to keep it that way.  I don’t care whatever any Nigerian government had offered Dangote Sugar and Flour Mills. The deal today is this: we need affordable sugar, and if BUA can bring that, let it be. 

My principle remains thus: allow everyone to compete on the same terms. Give BUA the same rights given to Dangote and Flour Mills. There is no need for  exemptions. 

Finally, Dangote Refinery had made a claim that only those with refinery license should be allowed to import petrol into Nigeria. If the government buys into that, over time, the refinery can even stop production, and focus on imports. That is why exemptions are bad: everyone needs to have the same rules. 

Punch had reported that Dangote Group has desired  for inclusion in the Petroleum Industry Bill a requirement that the license to import petroleum products should be given only to companies with active refining licenses. The company does think that by having that requirement, companies will invest in local refining business.

So, on this sugar, Nigerian government should allow BUA Sugar to run its show. Possibly, kids in Ovim can enjoy nice tea again.

Yes, they import and it is the same playbook Dangote Refinery is pushing in the PIB bill to make importation of petrol to be exclusive to others running refineries. They always have this: license to refine, and that gives you rights to import, exclusively!

Dangote Group, Flour Mills, File A Petition to Stop BUA from Running A Sugar Refinery

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12 thoughts on “Dangote Sugar, Flour Mills, BUA Sugar – And Problems with Nigeria

  1. Quite daring, and I may have to pinch myself, to be sure that I am still living!

    That we have shameless creatures in abundance is no longer a new phenomenon, but the brazen level of impunity with which they go about making immoral demands, that should worry the few sane guys we still have around.

    This cult-like economy we operate that keeps scaling poverty and hunger, instead of wealth and wellbeing, yet our overfed and super privileged big men are still asking for more privileges; this is pure insanity.

    Cement has been in existence for centuries, and no serious innovation ever occurred there in decades, yet that is the commodity our richest guy amassed wealth from, and he still has the temerity and effrontery to lecture us on value destruction and sustainability; what a world!

    Well, in the history mankind, big in wisdom has never equated big in material wealth, same way hardwork doesn’t equate success; that is why guys with no invention or innovation to their names are being revered here, because fortunes fell on them.

    We await the ministry’s response, but the fact that men even thought it noble to put out this garbage says a lot about the state of the nation.

    Never give what is holy to the dogs, very important…

    Reply
    1. Yes your submission is very interesting and information about all you’ve said are noted by the so called government.
      Wy question from the press in this country is, their contribution to bring sanity to bear in the country in respect of economy and business.
      The type of government we are operating has no comparison in any where is the world. My stake.

      Reply
  2. I am not surprised. It is only in nigeria that a thief can tell government when to be arrested and when to be released. A company interested in economic growth and sustainability in nigeria should not and cannot go as far as bribing for laws to flush out genuine competitor An economy with out competition is a dead economy.

    Reply
  3. He sells his cement in nigeria at between 3500_4500 while in Tanzania the same goes for 1800. Reason been that the government there want the Best for there peaple hence any company in that economy must operate in accordance with the law of the land and not law of the few

    Reply
  4. dangote did it to ibeto cement and succeeded. then h had obasanjo to help him shut down ibeto cement. ethnic bias we shouted. unfair privilege we saw. now he is doing exactly the same thing with bua sugar refinary. will the APC govt help him remain a monopoly? well, using unfair treaties to shut down competition is dangote’s stock in trade. i hope he doesn’t succeed in this particular fight.

    Reply
    1. I think BUA is only trying to destroy the import-substitution policy of the government. Setting up a refinery where bulk of major raw materials are imported rather than sourced locally is risky, since the multiplier effect on employment will be meagre. Dangote is already into backward integration with a large sugar plantation in Nasarawa State, creating jobs for Nigerians. BUA import of raw sugar is just a way of increasing our import bill and worsening our BOP problems. Since unemployment is a major concern, prices of sugar alone can’t trigger inflation. BUA shouldn’t present his evil intention as if he meant well for Nigerians. His logic is already captured by Adam Smith’s famous phrase. Unemployment is Nigeria’s major concern. I don’t know when BUA has turned a macroeconomic manager of the country to tackle the unknown goal of sugar inflation. Is sugar inflation our problem? BUA should only fool shallow thinking Nigerians to win their sympathy. He should source raw sugar locally just as Dangote does. Alternatively, no sugar refining firm should import raw sugar into country.

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  5. It is a brazen abuse and rape for a government to grant 55% right of monopoly (maybe we can invent the word ‘autopoly’ to suit) to single company for a product as essential as sugar when there are several companies and organizations that were willing to import the same product. FMNL in this case is a mere accomplice not the perpetrator.
    In any government that has the civility of having value for their citizenry, perpetrators of this crime of social rape should be publicly tried and adequately sanctioned and penalized.

    Reply
  6. There is nothing wrong in corporate giants joustling. It is not a beauty parade out there. What we need is for Government and the regulators to ensure that the laws/rules are being upheld and applied justly.
    Verbal attacks here against Dangote or his companies will solve nothing.
    Perhaps the real issues implicate the question of backward integration and existing national plan for the sugar industry. And this can not be answered completely without a reference to how many hectares of sugar cane farmland is being cultivated by each company, Dangote, Bua, Flour Mills etc towards meeting the national objectives? Please go and find out.
    I like the spirit of BUA, they are heavy in Cement, have also signed agreements to get into Petrol Refinery and are in Sugar Refinery. Let them all compete according to the rules, whatever those rules are.
    Dangote no doubt has benefited from Government policies and perhaps have had a hand in steering those policies favourably. Should he be doing otherwise? Else where, where you all talk about and refer to their standards as best international standards, there is a whole industry dedicated to lobbying for favourable policies, regulations and laws for their patrons.
    Whilst Dangote has certainly benefited from Nigeria, and he is entitled to, he has also put back so much into Nigeria and Africa as I believe BUA is also beginning to do.
    Pray, who is the single largest employer in Nigeria after Government? Nobody ever talks about that. It is Dangote Industries!
    The same way an entire online industry dedicated to bashing Bill Gates and some other phenomenally successful people have developed, same apparently is developing in Nigeria against Dangote.
    The gentleman comparing prices of cement in Nigeria and elsewhere in Africa does not take into cognisance that the entire infrastructure for cement production from power to the building of roads is provided by Dangote and the Cement producers essentially. Yet, wholsesale price 600bags of 50kg bag of cement is sold at ?1800 to ?2100 approximately depending on the location in Nigeria and the retail price of the same 50kg of cement is sold for approximately ?3,200 to ?3,600 by the retailers!!! Is Dangote a cement retailer? These retailers are your cousins, sisters, brothers, aunties, uncles as well as mine. The retailers are not Dangote or Dangote Industries. GIVE THE GUY A BREAK!
    I have no relationship whatsoever with Dangote or BUA or Flour Mills. I am an investor who has bought shares and also sold off those shares in Dangote Cement and Flour Mills but have not committed a single dime to BUA shares because it is bloodily expensive, I mean overvalued based on my own parameters. I think we could all consider finding ways to put Government under massive pressure to ensure that rules and regulations are being applied fairly and equitably.

    Reply
    1. If am given the opportunity of monopoly enjoy by Dangote nothing will stop me from being one of the richest men in the world. He uses the monopoly to exploit us. Yes why won’t he employ he needs people to complete it. Check out the business that he doesn’t have monopoly he failed in all and sold the business. Let there be complete competition then you will know who is a good business man. First time in many years Sugar price is not hick to the highest for Ramadan fasting.

      Reply
  7. Some of these crisis could easily be resolved when there is an honest national objective or economic agenda. That should be driver of policies formulation. What all companies should do must fall in line with that national objectives that must geared towards job creation, national economic wellness that must not stifle competitions and create consumer crisis. Any trend or attitude of any organization that negates the above objective must be discouraged within the ambit of laws and regulation. Companies like Dangote, BUA and Flour Mills must be brought together on a round table to discussed and align to these National objectives without any crisis between them.

    Reply
  8. A needless battle that only confirms the unwillingness of some of our industrial giants to be there for the country’s common man. The BUA argument is logical, sound and well-presented. I cannot pick a hole in it. It looks like the only big player desirous of establishing a regionally competitive operation as opposed to one solely dependent on exploiting the Nigerian market with the help of skewed government policy and using the local overpricing as a subsidy for any subregional exports. It is on record that these same characters were vehemently against Nigeria signing unto the African Continental Free Trade Area (AfCFTA) Agreement as they feared it will force a lowering of protection for them to continue exploiting Nigerians with their uncompetitive industrial practices including pricing and monopoly. I am aware that sugar is one of the candidate AfCFTA-facing value chains Nigeria wants to lock into using our over-capacity to work with other African producers to refine their sugarcane outputs and export the finished product back to. It seems BUA Sugar playbook is ahead on this count. I can only wish them well.

    Reply

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