Price war: Dangote file petition against BUA, wants sugar refinery shut dow

*It’s because we refused price increase during Ramadan, says BUA

A major war has been raging in the Nigeria sugar industry for some time now and the bubbles seemed to have burst with Aliko Dangote, Chairman, Dangote Industries Limited decision to petition the Federal Government asking the Ministry of Industry, Trade and Investment to shut down BUA Group’s Sugar Refinery located in Port Harcourt.

In the 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 further accused BUA 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.

BUA in its defence sent to the Honourable Minister of Industry, Trade and Investment, Niyi Adebayo, however, 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 the DANGOTE group and the other major player have not been involved in any backward integration project, rather they depend on 80 per cent raw sugar allocation which is detrimental to the Nigerian economy in long term analysis.

BUA on the other hand has been involved in a backward integration project with BUA’s Lafiagi Sugar BIP set to be completed in 2022.

Over $250million 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 FG to close the BUA Sugar refinery down is the price war.

Last year, before Ramadan, sugar sold for around N18,000 per bag. But as Ramadan fasting started 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.

So, the manufacturers were smiling at 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 of the demand in Nigeria.

Usually, the increase happens about one month to commencement of fasting, but 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 production 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 are not tampered with all because of the desperate attempt by Dangote Group to monopolize the sugar trade in See the correspondences Trade Ministry and BUA Group below