Dangote Sugar Refinery has denied that it is involved in plots to fish sugar prices during the Muslim fasting month of Ramadan, even as other sources question why the company does not make efforts to stop the sharp practices of dealers and retailers of its product during festive seasons.
In a denial first published by The Insight magazine, and affirmed by one of its staff on Monday morning, Dangote Sugar Refineries (DSR) vehemently refuted allegations and assertions of engaging in price-fixing and that it is not honestly engaged in any Backward Integration Programme as claimed.
Recall that online publications, including Everyday.ng, published reports of claims by fellow Kano-born industrialist, Abdulsamad Rabiu, that a petition against him by Aliko Dangote stemmed from his refusal to be part of a sugar price-fixing conspiracy at Ramadan.
An analyst, Mohammed Musa, told Everyday.ng that the comments of Rabiu were clearly below the belt. “Bringing Ramadan into it was clearly devious and intended to turn the tide of opinion against Dangote, but I must confess that the assertion is true. When people of other faiths have their events, there is a concerted effort to crash prices with all kinds of promos, but when it comes to Ramadan, there is an exploitative tendency by companies and traders, even when our people are owners of the concerns. This tendency, yearly, beats me.”
But another commentator, a Dangote staff, who pleaded anonymity because it is not his schedule to speak to the press, disagrees slightly with Musa. His words, “It has nothing to do with the holy month of Ramadan; it is a function of demand and supply. By the way, most of what we are accused of is perpetrated by dealers and wholesalers.”
Dangote companies have been the butt of criticisms recently over the unfair treatment it metes out to Nigerians, especially with cement, with many fearing for the price of petroleum products when its refineries come on stream
But DSR stated that it “does not engage in artificial price manipulation of its products, either during the Holy month of Ramadan or at any other time. We have never ever increased price of our food items or commodities during the Holy month of Ramadan in the history of our operations” according to the Group Managing Director, Mr. Ravindra Singhvi.
He also added that the Company is socially responsible and considers price-fixing to be unethical. “Such allegation is highly mischievous and a calculated attempt to smear the reputation of DSR. DSR can only sadly conclude that the online publication is mischievous and geared at creating some form of undue advantage to some Industry players, he said.
He said that the company began its Backward Integration Programme (BIP) with a 10-year sugar development plan, to produce 1.5 million Metric Tonnes (MT) per annum of sugar from locally grown sugarcane. The Project commenced with acquisition of large expanse of land in strategic locations such as Taraba State, Adamawa State and Nasarawa State. To this end, three (3) BIP sugar companies; Dangote Taraba Sugar Limited, Dangote Adamawa Sugar Limited, Nasarawa Sugar Company Limited were incorporated.”
The Company commenced rehabilitation and expansion of its Sugar Factory at Numan. Sugarcane planting has also commenced in the two other BIP locations.
“DSR has a responsibility to the Government, the good people of Nigeria and the Sugar Industry and all other stakeholders to protect the integrity of the Sugar industry and wishes to assure its stakeholders as follows: It will do all that is necessary to vehemently protect the integrity of the Sugar Industry, it is not engaged in price fixing and it encourages healthy competition amongst the players.
“DSR highlighted a matter (BUA’s operation of a Sugar refinery in the Free Trade Zone in Port Harcourt, exporting refined sugar into the Custom territory) which may circumvent the National Sugar Master Plan’s (NSMP) framework and jeopardize its objectives by taking advantage of the location of its Port-Harcourt Refinery in the Free Trade Zone. DSR made this notification to the Hon. Minister of Industry, Trade & Investments bona fide, via its letter to the Minister dated January 28, 2021 asking the Minister to investigate the matter.
“We believe our action is in line with our responsibility as a major stakeholder to alert the supervising Ministry on activities that would derail the plan of the Federal Government in its drive to self -sufficiency in Sugar under the NSMP.”
Recall that Everyday.ng reproduced a report by The Capital newspaper highlighting how the matter of sugar caused a division between two Kano-born businesmen: Dangote, Abdulsamad.
The report reads: Sugar, so sweet, yet the source of bitter rivalry between two Kano brothers: one a nephew to the famed Dantata; the other a scion of the wealthy, but late Isyaku Rabiu – Dangote and Abdulsamad.
Both were said to have sat down and resolved not to encroach into each other’s business and trading; but the love of the money couldn’t just make the agreement stick; and today it is from one huge disagreement to the other.
It was speculated that an Emir of Kano called both men to a roundtable to sheath their swords. They agreed; but the love of money and business did not make the agreement last. They returned to the trenches.
Within the last one year, they have ticketed over supplies to tackle Covid-19.
Now, sweet, old sugar is the new turf of war.
The major war has been raging in the country’s sugar industry for some time now and the bubble seems to have burst with Dangote’s decision to petition the Federal Government asking the Ministry of Trade to shut down BUA Group’s Sugar Refinery located in Port Harcourt, The Capital newspaper reports.
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 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.
BUA in its own defence sent to the Honourable Minister of Trade 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 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.
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.
A source however claimed that already, BUA group has dragged the Trade Minister to court to ensure that the operations of the sugar refinery is not tampered with all because of the desperate attempt by Dangote Group to monopolize the sugar trade in Nigeria.