Dangote, Flour Mills attacks BUA for rejecting hike in Sugar price
Two of Nigeria’s leading sugar producers, Dangote Industries Limited and Flour Mills of Nigeria have dragged BUA Sugar – a subsidiary of BUA Group before the Federal Ministry of Industry, Trade and Investment demanding the closure of its Sugar facility in Port Harcourt.
A petition dated 28th January, 2021 signed by Aliko Dangote as the Chairman Dangote Industries limited and John Coumantaros as Chairman Flour Mills of Nigeria accused Abdul Samad Rabiu of BUA Group 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 also accused the company of importing raw materials against regulations and the National Sugar Master Plan (NSMP) hinged on the backward integration plan. The duo prayed the Minister of Industry, Trade and Investment, Niyi Adebayo to sanction BUA.
It should be noted that as part of their obligations to the NSMP, all refinery owners in Nigeria were expected to invest in significant local production through Backward Integration Project. Dangote bought Savannah Sugar, Flour Mills Golden Sugar bought Sunti Sugar and BUA bought Lafiagi Sugar.
In its reply dated February 11, 2021 to the FMITI’s “Request for Information on BUA Sugar Refinery” letter dated February 10, 2021, BUA accused Dangote, Flour Mills who have been unserious with the BIP of depending on 80% raw sugar allocation which is detrimental to the Nigerian economy in long term analysis.
The letter signed personally by Abdul Samad Rabiu, Founder/Executive Chairman, BUA Group said its sugar subsidiary has been involved in backward integration project with BUA’s Lafiagi Sugar BIP set to be completed in 2022. He added that Dangote and Flour Mills are acting as friends to destroy competition in the country.
The letter reads in part: “BUA takes serious exception to the ludicrous claims by its two major competitors that its aims to circumvent the BIP of the sugar industry – an initiative in which it has invested billions of naira and its almost nearing completion. The flagship Lafiagi BIP projects despite being the last to be handed over by the FG amongst the 3 producers has seen significant progress which is measures at scheduled intervals by the Nigerian Sugar Development Council and also via peer reviews with the other players in question – in line with the dictates of the Nigeria Sugar Master Plan. To thus claim that the BUA PH export focused refinery in an Export Zone will amount to an undermining of the NSMP is false.
Meanwhile, BUA also noted that at the centre of this fight to force FG 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.
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.
See documents below: