Dangote blames closure of tomato plant on influx of foreign products
The Vice President of the Dangote Group of Company, Sani Dangote has said stiff competition from about 30 industries that import tomato paste from China caused its Tomato Manufacturing plant in Kano to shut down.
He explained that despite actions taken by the Central Bank of Nigeria (CBN) to stop selling of forex to importers of tomato paste, the importation of the product is still far cheaper than local production, explaining that China has drop the price of the commodity by 50 percent so as to be able to meet Nigerian demand.
He said: “The problem is that there is still a lot of import coming. Even though Central Bank said its not giving any importer dollars to import tomato paste, other countries like China have dropped their prices by 50%, to ensure that even though there is devaluation in Naira, they will be able to sell to those who want to buy through the parallel market.
“With Nigerian government dropping duty to as low at 5%, and China dropping their price to less then 50%, it means that you can even buy dollar at N500 and import tomatoes paste and sell. And if you check the price they are selling, they are selling 70gram at almost N50 naira. By the time you multiply this value they are selling over $2300 per tonne when they are buying it less than $700.
“So the margin is huge. Unless government does something, there is no way we can pay a local farmer who has no capacity compared to Chinese farmers. A farmer here gets only about 12 tonnes per hectare; the Chinese farmer gets over a 100 tonnes supported by government and other supports”.
Dangote disclosed that some companies have opened factories in Ghana, in the free zone under the disguise of ECOWAS and bring retail packs directly into the country, stating that the Federal Ministries Finance, Industry Agriculture, National Planning are aware of some of these challenges unfortunately noting is yet to be done.
He lamented that with farmers starting planting, government is yet to put in place policy that would guide the tomato value chain, maintaining that the situation does not encourage industries to embark on backward integration.
He urged President Buhari to put in place the necessary policies towards enforcing total ban of importation and ensure the companies that are into retail packaging begin to buy from local producers for them to package and sell.
He added: “The hope is that let the president take the initiative if the ministries have failed to take the initiative. If it gets to the president, am sure he won’t want to see his vision diminished by some bureaucratic process.
“But it’s very unfortunate because thousands of farmers will continue to suffer because of companies that are bent on importing to Nigerian market. Nigeria is a big market for any tomatoes exporter so they will do everything possible to see that tomatoes keep coming to Nigeria unless our government takes the bold step to do the right thing.”