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Dangote blames closure of tomato plant on influx of foreign products

By Joke Falaju, Abuja   |   11 October 2016   |   3:16 am
Dangote Tomato Processing Factory in Kadawa, Kano State

Dangote Tomato Processing Factory in Kadawa, Kano State

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.”

  • real

    There are two crops that need to be completely banned from being imported regardless of where you get your forex from. tomatoes and rice needs to be completely banned, and anyone caught importing it, should be fined massively, pay a 200% taxes and levies. This would ensure that we don’t kill our own industries that are struggling to survive. why they haven’t banned this product from being imported is beyond me.

    • kunlexy

      Unfortunately many of us still believe in the economics of 1980: ban this , ban that! The truth is that we really don’t need to ban anything except that which is harmful and toxic to humans. All we need to do is improve the standards of locally made products to compete with those imported stuffs at reduced prices and I tell you, imported items will fizzle out. Check out how chi vita products have chased Don Simon, and other imported drinks out of the market. Hardly will you see a household still consuming imported juice and it is simply because chi vita gives value for money, is cheap and compete favorably with imported ones. Same thing in the music industry, the government did not have to ban foreign music for Nigerians to start embracing local music, what simply happened is that our musicians upped their game and foreign music went into oblivion. In this wise, let the government build infrastructures, provide stable power, engender friendly policies and make low interest funding accessible and I bet you foreign competitions will fizzle out in no time. If you continue to ban without making provisions for local industry growth, smuggling will still continue cos a custom officer with say 50,000 naira monthly pay and police officers with 25,000 pay will still compromise. Unless hunger has been effectively dealt with, corruption cannot be effectively stamped out.

      • chimex

        Guy you make small sense oh!

      • Yusuf A. Emmanuel

        I like how you think, let them improve quality and chase the imported product(s)

        • yinka

          You don’t understand that all
          countries have a way to protect key industry through regulation and policy. Nigeria must protect their farmers.

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