…We won’t succumb to increase during Ramadan, BUA insists
BY AMOS DUNIA, ABUJA – A major trade war has been ignited in the Nigeria sugar industry over alleged price increase in the cost of sugar in the country.
As a result, Dangote has petition the Federal Government through the Federal Ministry of Trade, demanding a total shut down of BUA Group’s Sugar Refinery located in Port Harcourt.
In a letter dated January 28, 2021 which was signed by the chairman of Dangote Industries Limited, Mr. Aliko Dangote, the multi-billionaire businessman alleged that when BUA Sugar refinery was opened, he had cautioned the Federal Government and was assured that; “no new refinery would be allowed to operate in Nigeria”.
Dangote pointedly accused BUA of operating with what he described as “impunity” by contravening the laid down laws in the National Sugar Policy by selling its products locally instead of producing for export alone.
However, BUA in its reponse to the letter written to it by the Minister of Trade, stressed that contrary to claims by Dangote, the law allows it to sell within Nigeria.
While presenting to the minister the enabling permits and approval, BUA noted that owing to 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 specifically said that Dangote group and the other major players have not been involved in any backward integration project as they depend more on 80% raw sugar allocation which is detrimental to the Nigerian economy in long term analysis.
BUA further said that on the other hand, it has been involved in backward integration project with BUA’s Lafiagi Sugar BIP which is set to be completed in 2022.
It said that over 250million dollars has been spent on the export focused BUA sugar refinery already which is presently employing over 1,000 Nigerians.
BUA also noted that at the centre of this fight to force Federal Government to close BUA Sugar refinery down is nothing other than price war.
It said that last year, before Ramadan, sugar sold for about 18,000 Naira per bag but when the Ramadan fasting started, the price suddenly jumped to 30,000 per bag without any added value.
BUA further said; “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 get him accept their price, they petitioned the Federal Government that he was breaking the law by selling sugar locally instead of for export,” BUA stated.
Checks indicate that following the price war, the BUA group has dragged the Minister of Trade to court to ensure that the operations of its Sugar Refinery is not tampered with or disrupted.
It was also gathered that BUA has vowed to maintain its price and would therefore not allow any desperate move by Dangote Group to monopolize the sugar trade in Nigeria