Aliko Dangote, leader and founder of the Dangote group has petitioned the Fedreal government, requesting that the BUA Sugar Refinery be shut down.
Dangote Group, in a letter jointly signed by the Aliko Dangote and the Chairman, flour mills of Nigeria PLC, John Coumantaros, said that the commissioning of the BUA Port Harcourt refinery is an act intended to undermine the National Sugar Master Plan of the Federal Government.
The group noted that according to the mid-term review conducted by the national sugar development council, BUA has faulted by failing to invest substantively in local production of sugar.
It called for investigations to determine the quality of raw sugar imported by the refinery in Port-Harcourt and the appropriate penalty in terms of duty (60 per cent) and levy (10 per cent) to be imposed on the company.
It said, “The sugar industry in Nigeria has been governed for a while now by the National Sugar Master Plan, which is a well designed policy to encourage backward integration in the sugar industry with the ultimate objective of attaining self-sufficiency in sugar production locally.
“With this in mind, we wish to humbly bring to your attention an important issue which we believe threatens the attainment of the National Sugar Master Plan and the sustainability of Nigeria’s local sugar industry of which our two companies are the largest investors.
“Publicly available information suggests that BUA International, one of the players in the sugar industry has commissioned a sugar refinery plant in Port Harcourt, River State.
“Recall that we did about this development in 2019, and we were re-assured that in line with the government’s SIP, no new refinery will be allowed to operate in Nigeria.”
Recall, the Federal Executive Council had at its 37th meeting held on September 19, 2012 approved the NSMP for implementation and adoption as government strategy roadmap for the development of the sugar sub-sector.
The plan contains fiscal and investment specific incentives designed to stimulate and attract new investors to the industry in order to increase local sugar production and reduce the nation’s dependence on imports.
Accordingly, the plan aims to guarantee huge return on investments for all players, attain self-sufficiency, create jobs, generate electricity and derive other benefits of the sugarcane value chain.
It stated, “We seek a level playing field that provides for fair competition in the local sugar market in order that we stay on course to achieve the gain of sugar master plan.
“We humbly request that the Honourable Minister engage with the Comptroller-General of Customs and the CBN Governor to consider and implement the following; that the Nigeria Customs Service be mandated to comply strictly with the authorized quota allocation in clearing cargoes and administering levy and duty.
“That the Central Bank of Nigeria be required to monitor the registration of form Ms in line with the quota allocation.”
The Dangote group also stated that the BUA group only seeks to promote imports while claiming to be investing in sugar plantation, adding that Nigeria already has enough refining capacity to satisfy the demand of Nigerians.
“Before this investment in additional refining capacity, Nigeria already has enough refining capacity to satisfy demand today and well into the future.
“So the business logic behind this investment is clearly defective, BUA intend only on importing and refining raw sugar while claiming to be investing in developing sugar plantations in order to qualify for quota to import raw sugars”, it added.
BUA in its own defence sent to the Minister of Trade stated that the law allows it to sell sugar locally.
While attaching the enabling permits and approval, the Compay 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.
It said rather, they depend on 80 per cent raw sugar allocation which is detrimental to the Nigerian economy in long term analysis.