Dangote Group has petitioned Trade Ministry, seeking for the shut down of BUA Sugar Refinery.
OnyxNews Nigeria reports that the Chairman Dangote Industries Limited, Aliko Dangote, has petitioned the Ministry of Investment, Trade and Investment, seeking for the shut down of BUA Group Sugar refinery in Port Harcourt, Rivers State capital.
According to reports sent by BUA Group and Trade Ministry to OnyxNews Nigeria, the fight comes because BUA refused to increase the price of sugar during Ramadan.
In a letter dated 28th January, 2021 signed by Aliko Dangote himself as the Chairman Dangote Industries Limited, the billionaire claimed that when the BUA Sugar refinery was opened, he warned the Government and they told him that ‘no new refinery would be allowed to operate in Nigeria’. Dangote accused BUA of operating with impunity by contavening the laws as laid down in the National sugar policy by selling it’s products locally instead of producing for export alone.
In BUA Group’s defence sent to the Honourable Minister of Trade which was obtained by this online news platform, the group explained that the law allows it to sell inside Nigeria. Attaching the enabling permits and approval as evidence.
BUA further stated that due to the connivance of the two major sugar manufacturers to increase the price of sugar during the season of Ramadan, the law allows it to sell locally.
OnyxNews Nigeria understands that 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% raw sugar allocation which is detrimental to the Nigerian economy in long term analysis. BUA 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.
However, BUA also noted that at the centre of this fight to force Federal government to shut down BUA Sugar refinery is the price war.
Recalling some issues, a source familiar to the trend, explained that: “in year 2020 Ramadan, a bag of sugar was sold at price of 18,000 Naira per bag. But as Ramadan fasting commenced the price jumped to N30,000 per bag.
“The people had no choice but to buy it because they needed a lot of it during the period.”
“The group noticed the trend of increase in demand and decided to change the price. There was no reason to increase the price during Ramadan simply because the demand is high,” the source said.
The source also noted that the increase of sugar price usually comes one month to the start of Ramadan. When the other manufacturers got across to BUA, Samad Rabiu who is the chairman refused, even after being pressurized by other manufacturers.
The manufacturers afterwards, petitioned the Federal Government that Rabiu was breaking the law by selling sugar locally instead of exporting it
However, OnyxNews Nigeria gathered that BUA Group has dragged the Trade Minister to court to ensure that the operations of the sugar refinery is not tampered with due to the desperate attempt by Dangote Group to monopolize the sugar trade in Nigeria, a source claimed.