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Thursday, April 8, 2021

Untold Story As Dangote Teams Up With Flour Mills John Coumantaros In Underground Moves To Shutdown Economy Booster BUA Sugar


A startling scenario is playing out in the sugar industry and it further gives winds to talks about who is really in charge of the current administration handling the affairs of Nigeria.

Aliko Dangote in partnership with John Coumantaros, the Chairman

Flour Mills Nigeria Plc  wrote a  letter to the Minister of Industry Trade and Investment, Niyi Adebayo on January 28, 2020 making recommendations that  will practically reverse the approval of President Muhammadu Buhari on BUA Sugar Refinery in Port- Harcourt.

Interestingly, the Ministry the letter was written to midwife the process that resulted in President Buhari’s approval for the setting up of the 850,000mt BUA Sugar Refinery at the Bundu Free Trade Zone Rivers State.

Aliko Dangote and John Coumantaros a Greek/American National are competitors of BUA in the sugar industry.

Their letter to the Minister of Trade Adebayo wants BUA Sugar Refinery with the capacity to provide direct employment of 1000 jobs and offers economic derivable variables in taxes, corporate social responsibility initiatives and the likes shut down for reasons which are largely premised on the claim that “Nigeria already has enough refining capacity to satisfy today and well into the future”

An assertion that when put to a simple test of market survey is invalid.

“Why does the price of Sugar keep surging when demand increases during periods such as Ramadan and the likes if there is more than enough capacity already” a source pointed out. gathered that the letter by Dangote and Coumantaros largely alleged that BUA is taking undue advantage of the location of its Port-Harcourt refinery in a free Trade Zone in a manner that jeopardizes the objectives of the National Sugar Master Plan (NSPM).

An allegation BUA labeled “Ludicrous” and explained that what drives Dangote and Coumantaros to undermine the power of President Buhari is fear of losing their grip on the Sugar Industry.

BUA in a letter dated February 11, 2021 - and signed by Chairman Abdul Samad Rabiu - stated that Dangote and Flour Mills connive to increase price of Sugar with wanton abandon locally and that though BUA’s sugar is meant for export, the presidential approval that set up the Port-Harcourt Refinery permits it to sell locally to alleviate the suffering of Nigerians in the hands of Dangote and Coumantaros whose company got a N40Billion intervention fund at a very reduced interests from the federal government.

“Most importantly, It is pertinent to note that our export focused port Harcourt Refinery is mainly for exports rather than for the Nigerian market. However, in the event that these two companies – conniving as they normally do – try to increase price with wanton abandon locally , we are permitted by the extant laws and regulation to intervene, act as a buffer and sell locally as per the NEPZA approval.

“This what threatens them the most – an end to arbitrary collusion to create Sugar scarcity and keep prices high”

BUA in the letter to Minister Adebayo insists “What BUA Sugar is doing is legal and within the confines of the law, have not done nor are we doing anything wrong”.

Sources disclosed that what BUA has done is to refuse to increase the price of Sugar and put in place measures that ensure its agents comply.

“This throws spanners into the work of the competitors keen on increasing price and naturally the competitors won’t like that” learned.

Contrary to claims by Dangote and Coumantaros that “ the mid-term review conducted by the NSDC (National Sugar Development Council)  was clear in its conclusion – BUA has failed to invest substantively in local production or comply with its undertaking under its BIP (Backward Integration Programme), BUA asserted that “ As far as the Backward Integration Programme is concerned, BUA is doing everything humanly possible to ensure that its BIP project is on course through our 20,000 hectares Lafiagi Sugar Project encompassing a 10,000tpd Sugar Mill, 200,000tpa Sugar Refinery, 20million litres ethanol plant, and a 35mw power plant from bagasse. Of the 3 producers, BUA is the only one with a plantation, a Sugar mill for crushing canes, a refinery to produce white sugar and an ethanol plant. The other players only have sugar mills thus producing brown sugar without refining. It shows how much lips service they are paying to the National Sugar Master Plan as a means to simply keep importing sugar.

“…We have so far invested tens of billions of naira on this project(multiples of what the other producers have spent) and at the current pace, our Lafiagi Sugar BIP project should start producing at the end of 2022. We are very much on track to meet our BIP Targets”

Putting the development at the Lafiagi Sugar project in context as it relates to the operations of its competitors, BUA explained in the letter to Minister Adebayo “Both Messrs Dangote and John Coumantaros and their respective companies are not happy with our Lafiagi BIP – seeing the level of investments there as well as the Port Harcourt project. They feel it could affect their market and drive the price of sugar downward for Nigerian and Nigerians. They are fully aware that is our intention, they will therefore do anything possible to stop it”

“….I dare say that no company in Nigeria has benefited more than these two companies as far as concessions, waivers , and exemptions are concerned. That is what they would like to continue. As a matter of fact both players already enjoy 80% of the raw sugar allocation (Dangote – 55%; Flour Mills 25% ) without commensurate investments in their BIP to warrant such allocations. This has always been the case since the inception of the policy and Dangote especially will do anything to protect that monopolistic advantage hence the reason why they are fighting BUA”

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