There were fresh indications Thursday, that the tuff war between Kano-born billionaires- Aliko Dangote, President of the Dangote Industries Limited (Dangote Group), and Abdul Samad Rabiu, of BUA Group, may not end soon, even as new stakeholders are seemingly being dragged into the fray. Incidentally, both groups have subsidiaries that are competitors in the fast-moving consumer and industrial goods, among others, hence the repeated clash of interests.

Recently, there was controversy over whether Rabiu’s BUA indeed paid for the purchase of doses of the novel Coronavirus vaccine or not.

In a statement by his group on Thursday night, Rabiu accused Dangote, of conniving with Chairman, Flour Mills of Nigeria Plc, John Coumantaros, of petitioning the Federal Government, alleging that the country can do without a new sugar refinery plant.

In another statement, also on Thursday night, the Dangote Group on behalf of its sugar subsidiary- Dangote Sugar Refinery, vehemently refuted “the allegations and assertions in their entirety.”

Describing the allegations as false, it said they “are geared at tarnishing the good name and brand of Dangote Sugar Refinery Plc and Dangote Industries Limited.”

DSR, it assured further, has a responsibility to the government, Nigerians, the sugar industry and 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.

BUA Group had accused Dangote and Flour Mills of alleging in their joint petition to the Minister of Industry, Trade and Investment, Niyi Adebayo, dated January 28, 2021, that a new sugar refinery in the country “poses a threat to the attainment of the National Sugar Master Plan (NSMP), as well as sustainability of the country’s local sugar industry.”

The duo protested the recent commissioning of a sugar refinery in Port- Harcourt, Rivers State, which is reportedly owned by BUA International, one of the operators in the sugar industry, BUA Group, further noted.

“They argued that the country currently had enough refining capacity to meet national demand,” BUA Group said in its press statement, quoting Rabiu, its chairman, as assuring that “his investment in Port Harcourt did not in any way pose a threat to the country’s sugar policy.”

The new investment, Rabiu argued instead, “will rather checkmate arbitrary price increase by the major players among other benefits to the country.”

Confirming the rancour among the operators, Adebayo, while reacting to enquiry by THISDAY, a Nigerian national daily, on Thursday, however declined further comments on the matter which is already in court.

Quoting contents of the petition addressed to the minister, BUA Group said “Dangote and his counterpart in Flour Millis, argued that they had in 2019, warned about the risk of establishing a new refinery, adding that they got assurances that in line with the federal government’s policy on Backward Integration Programme (BIP), “no new refinery will be allowed to operate in Nigeria”.

“They also pointed out that a tremendous amount of work was required by all stakeholders to achieve the intended objective behind the sugar policy, which is to among other things, encourage backward integration to ultimately attain self-sufficiency in local sugar production.”

The petitioners, BUA continued, stated that with the new refinery, the country’s refining capacity had increased to 3.4 million metric tons per annum from 2.75 million metric tons per annum.

“The petitioners further demanded for a level-playing field that provides fair competition in the local sugar market in order for the country to realise the sugar master plan.

“They specifically urged Adebayo, to prevail on the Nigeria Customs Service (NCS) and the Central Bank of Nigeria (CBN) to ensure that the provisions of the NSMP were enforced and that no additional allocation of quota should be given for raw, VHP, or refined sugar for the sugar refinery in Port Harcourt for local market production.

“Among other recommendations, they said no allocations should be issued or applications considered for quota intended for re-export of sugar as this would be difficult to monitor and may be open to abuse.

The petitioners, the statement continued, added that, “an investigation should be conducted to determine the quantity of raw sugar imported by the refinery in Port Harcourt and the appropriate penalty in terms of duty (60 per cent) and levy (10 per cent) be levied on the company”.

It added that the customs should be mandated to comply strictly with the authorised quota allocations in clearing cargoes and administering levy and duty and that the CBN be requested to monitor the registration of “Form Ms” in line with the quota allocation.

“They recalled that under the revised guidelines released by the National Sugar Development Council (NSDC), it was made absolutely clear that the allocation of quotas henceforth shall be on quantitative and verifiable improvements in the BIP of operators in the industry.”

The petitioners, it stressed further, alleged that the midterm assessment conducted by the NSDC had concluded that BUA had “failed to invest substantially in local production or comply with its undertakings under its BIP.

“Even before its surreptitious investment in additional refining capacity, Nigeria already has enough refining capacity to satisfy demand today well into the future.”

“The petitioners maintained that the business logic behind the investment in new refinery was clearly defective, adding that “BUA intends only on importing and refining raw sugar whilst claiming to be investing in developing sugar plantations in order to qualify for quotas to import raw sugar”.

“They further alleged that the Port Harcourt refinery was clearly undertaken to deliberately undermine the federal government’s sugar policy.

“We are particularly surprised by the brazenness as we believe that the choice of location and the publicity campaign behind the investment has been deliberately engineered to provoke public sentiment and pit the federal government against its people,” the petition added.

It said unless the ministry of industry, trade and investment plays an effective policing role of the NSMP, the country’s dream of becoming self-sufficient and indeed a net expoter of sugar would be defeated.

“The impunity with which BUA has contravened the provisions of the NSMP has placed the other players who are abiding by the regulations, not only at a significant disadvantage but has discouraged them from undertaking the huge investments that would deliver the desired objective of 100 per cent local production of sugar, unless, of course, the ministry wades in and addresses the situation,” it added.

“Consequently, in a letter issued by Adebayo, dated February 10, 2021, which was addressed to the Chairman, BUA Group, Alhaji Abdulsamad Rabiu, following the petition by Dangote, the minister had requested detailed information on the BUA Sugar Refinery in Port Harcourt, particularly the company’s plan to service the Nigerian and export markets from its refineries.

“BUA, in its reaction to the minister, dated February 11, 2021, however, took “serious exception to the ludicrous claims by its two major competitors that it aims to circumvent the BIP of the sugar industry”.

The company pointed out in its five-page response, that it was unreasonable for it to be working against the backward integration policy of the industry, having invested billions of naira in the initiative which is almost nearing completion.

Rabiu, specifically assured that its sugar export focused project in Port Harcourt, will not affect in any way, the backward integration programme adding that “the only way it will affect Nigerians is that Nigerians will pay lower prices for sugar”.

The BUA Group boss explained that though the Port Harcourt refinery is mainly for exports, BUA is allowed under the Nigeria Export Processing Zones Authority (NEPZA) Act and current approvals/rules to intervene locally in order to stabilise sugar price, “where it is absolutely necessary- in the face of arbitrary price increases and collusion to force scarcity of the product locally”.

He said:”The same NEPZA Act upon which this project is based, gives the permission to process, add value, and export at the same time. Companies under this act are allowed to process and if they so wish, sell 100 per cent of their production in Nigeria with payment of duties based on the current raw materials tariff.

“As a matter of fact, Aliko Dangote of Dangote Industries, who is one of the complainants alleging and attacking to this approval has also applied and obtained the same approval for his refinery project in Lekki, Lagos State where he is currently enjoying the same benefits of being in an Export Processing Zone (EPZ).”

He argued further, the statement added, that ”what BUA sugar is doing is legal and within the confines of the law. We have not done nor are we doing anything wrong.”

Rabiu, further explained that the EPZ under which its Port Harcourt sugar project is sited went through a rigorous two-year review process before being forwarded to the ministry for approval of President Muhammadu Buhari, adding that only the president alone is constitutionally empowered to approve an EPZ license.”

According to the BUA Group Chairman:”Anything that is done to attack this project in any way, form or any guise, attacks Mr. President’s approval and we will do everything to ensure our rights are not trampled upon.”

He said BUA’s Lafiagi BIP is on track to be completed by the end of the year as well as commence production by the end of 2022.

Rabiu, also warned that any action that tampers with the current approval is capable of eroding investors confidence under the EPZ.

He disclosed that the company had spent over $250m on the Port Harcourt project which currently employs over 1,000 Nigerians and has significant economic impact.

Attempting to shut it down or stifle its operations, Rabiu continued, “will cost jobs and lost economic impact,” adding that BUA remained the only company of the three dominant players, spending serious money and seeking to complete its BIP project by 2022.

“We need to start asking firm, hard questions of the two other players,” urging the minister to remain firm and resolute in the discharge of his duties as he had always done, adding that BUA remained committed to its obligations regarding the BIP and the NSMP.

He said “we believe that time has come to call all players to true account”.

In an apparent reaction to the allegations by BUA Group, Dangote Sugar Refinery Plc in its own statement also on Thursday night, argued that “BUA’s operation of a Sugar refinery in the Free Trade Zone in Port Harcourt, exporting refined sugar into the Custom territory… 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.”

The company said it raised this concern with the Minister via its letter dated January 28, 2021, urging him to investigate the claim.

“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,” the statement added.

In its statement also, Dangote Sugar denied involvement in price fixing, and claims that it engages in price-fixing, rather than honestly engaging in any Backward Integration Programme as claimed.

“DSR 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,” the statement added, quoting its Group Managing Director, 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 recalled that the company began its Backward Integration Programme (BIP) with a 10-year sugar development plan, to produce 1.5m 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.

Consequently, three BIP sugar companies; Dangote Taraba Sugar Limited, Dangote Adamawa Sugar Limited, and Nasarawa Sugar Company Limited were incorporated, even as the company had commenced rehabilitation and expansion of its Sugar factory at Numan.

Sugarcane planting has also commenced in the two other BIP locations, DSR stressed.