Are we producing enough raw material to be self sufficient? In what way will BUA's sugar refinery affect Dangote and Flour Mill??

TSBO:
Na wa o. Except I missed it, I can't find one well thought out response to the original post. Just sentiments.

Nigeria does not grow enough sugar to meet demand. Therefore, most of the raw sugar input used by local refiners is imported.

A Sugar Masterplan was established so that we can develop domestic capacity to grow sugar instead of just importing. Now each of those three main refiners, Dangote, FlourMill and BUA, have a level of backward integration (sugar farming) they must reach and as they do, they are also given import quotas. If you meet your targets, you will likely get more room to import to make up what you have produced domesitcally. If you don't meet your targets, your import quota might be reduced. This is to encourage backward integration so that over time, we become self-sufficient WRT sugar.

According to the write-up, BUA's new refinery is primarily for exports; it's located in a free trade zone. So, it will primarily be importing raw sugar, refining and exporting. The concern noted by the industry expert is that due to its license from NEPZA, BUA can turnaround and sell it's product domestically if domestic prices are arbitrarily high (at this point, don't forget that the refinery will solely be using imported raw sugar; and yes, they will pay duty (60%) and levy (10%) if they sell domestically).

While it is a good idea to have someone that can stabilise local prices, the other players think this might be detrimental to the sugar masterplan, especially since, according to them, BUA has not really done well on that front. There should be full commitment to the Sugar Masterplan and a refinery in Nigeria that fully imports raw sugar may not be a step in the right direction and depending on whom you ask, might not show commitment by that refiner.

In summary, we all are still trying to achieve the Sugar Masterplan (I.e. reach self sufficiency in domestic production of raw sugar) and here you are creating a refinery that will only use imported raw sugar, and it's not like you are even doing well with the Sugar Masterplan. Also, it may be difficult to monitor that this sugar you are producing is not being sold in the Nigerian market.

I am neither for or against Dangote and Flour Mills but I guess it's rational for them to have misgivings in this situation.

On the other hand, the government can find ways to ensure BUA is more committed to local production and that they don't sell products from the new refinery in the domestic market.. If they can, it would cap what price others can sell at.. Not really a bad thing but it seems a bit unfair to others who are putting in more backward integration efforts.

Enough of all your desire to put nigerians is total slavery because you want to control manufacture sector in Nigeria

somehow:


What then do you see about what is going on now that it's Bua that is being accused of cutting corners?

Read it he write up again .if I’m right , Bua ‘s main operation will be for export . Dangote and co are not against that . What they are against is that Bua seems to have a clause that he might be called upon to enter the domestic market occasionally to help STABILIZE the local PRICE . That is what is upsetting Dangote and co . It defeats his mission ( monopoly ) to always be a major force in a market to the point where he can determine Price for everybody

blaise26abj:


Read it he write up again .if I’m right , Bua ‘s main operation will be for export . Dangote and co are not against that . What they are against is that Bua seems to have a clause that he might be called upon to enter the domestic market occasionally to help STABILIZE the local PRICE . That is what is upsetting Dangote and co . It defeats his mission ( monopoly ) to always be a major force in a market to the point where he can determine Price for everybody

Read it again!

Holiegrail2:
This Dangote man seems to be extremely greedy.

I am an Architect and a builder, I always prefer BUA cement to Dangote. The two no be mate for quality.

Thanks for this advise as regards cement quality.

dokitaeleran:
Are we producing enough raw material to be self sufficient? In what way will BUA's sugar refinery affect Dangote and Flour Mill??

No we are not YET producing enough raw material to be self-sufficient, but that's the target.

BUA is a part of the Sugar Masterplan. With this new refinery, they have found a way to expand their operations without any incremental contribution to backward integration efforts. Just imagine that the other companies follows suit, before you know what's happening, the Masterplan would die off. Not saying the Masterplan is the best plan, but at least, they all agreed to and if it needs to be changed, then that should be done.

Also, it seems under the license that allows BUA to be in the Free Trade Zone, they can sell refined products from the factory in the domestic market if domestic prices are arbitrarily high. That may sound good for sugar consumers as it may put a restriction on the prices Dangote and FMN can charge. However, that means you have someone who is putting relatively little effort into the Masterplan curtailing the revenues of those who are putting in more effort.

Further to the last point, commodity prices can be very volatile, and in times when prices plummet, high cost producers can suffer. Just for the sake of explaining, let's say right now, raw sugar costs N10 in the global market (plus shipping and all) and costs N8 to produce domestically. If global prices fall to N5, domestic cost will likely remain at N8 (all other things being equal) cos production costs may have little or no correlation with sugar prices. On the other hand, the person who imports can reduce his price by N5 without feeling a pinch. Imagine what that does to domestic producers if such comes into the market.
This is just one side of the story though, the other side is that domestic producers, because they enjoy so much protection, can raise prices to absurd levels if they are allowed to, as long as it continues to lead to higher revenues.

Holiegrail2:
This Dangote man seems to be extremely greedy.

I am an Architect and a builder, I always prefer BUA cement to Dangote. The two no be mate for quality.

You are very correct.All the block industries here in Anambra state don't use dangote cement

iHart:
Because he can't buy them over.

I doubt if what they are giving us today is Sugar.

In the days of St. Lious, once you get the sugar pack open, there is this big ants that comes to eat the sugar. But in today's sugar, if bring out the sugar and keep on the desk, the big ants doesn't come. Even if you take the sugar outside and still urinate on it, the big ants doesn't come.

Back in those days, when you dip a cube of sugar in water and put in pap, you can easily dissolve it with a plastic spoon. But today's sugar is as hard as stone. Even after dipping it in water, iron spoon still finds it difficult to dissolve it.

Two cubes of St. Lious use to turn my tea very sweet but three of these new generation sugar doesn't get my tea as sweet as before?

Is what we are taking today really sugar?

I spoke about this today, Everything is now substandard even insects don't want a taste of it.

TSBO:


No we are not YET producing enough raw material to be self-sufficient, but that's the target.

BUA is a part of the Sugar Masterplan. With this new refinery, they have found a way to expand their operations without any incremental contribution to backward integration efforts. Just imagine that the other companies follows suit, before you know what's happening, the Masterplan would die off. Not saying the Masterplan is the best plan, but at least, they all agreed to and if it needs to be changed, then that should be done.

Also, it seems under the license that allows BUA to be in the Free Trade Zone, they can sell refined products from the factory in the domestic market if domestic prices are arbitrarily high. That may sound good for sugar consumers as it may put a restriction on the prices Dangote and FMN can charge. However, that means you have someone who is putting relatively little effort into the Masterplan curtailing the revenues of those who are putting in more effort.

Further to the last point, commodity prices can be very volatile, and in times when prices plummet, high cost producers can suffer. Just for the sake of explaining, let's say right now, raw sugar costs N10 in the global market (plus shipping and all) and costs N8 to produce domestically. If global prices fall to N5, domestic cost will likely remain at N8 (all other things being equal) cos production costs may have little or no correlation with sugar prices. On the other hand, the person who imports can reduce his price by N5 without feeling a pinch. Imagine what that does to domestic producers if such comes into the market.
This is just one side of the story though, the other side is that domestic producers, because they enjoy so much protection, can raise prices to absurd levels if they are allowed to, as long as it continues to lead to higher revenues

That bolded part is the main issue we must desperately avoid. Dangote has shown time and again that he's a monopolist who selfish and greedy

deandavid:
Dangote is a lazy business man...

I've heard people say dangote's cement is low quality. I don't know why the government isn't investigating this.

Does Dangote realize that the day he dies he is gona be buried with just a single piece of white material? Why all these mindless acquisition of wealth? Must Nigeria only exist for him and only him alone?

Nigeria don turn yam for their hand na. Clueless set of governance.

aminulive:
Sugar War: Dangote Moves To "Edge Out" Competition, Demands Sanction Against BUA


https://politicsnigeria.com/how-dangote-moved-to-edge-out-competition-demanded-sanction-against-rival-sugar-business/

Boye33:
Finally, here comes a stiff competition for wicked and monopolistic dangote.
.

If not for Abdulsamad Rabiu strong northern roots and political connections, Dangote would have as usual frustrated him out of business, but today Rabiu is a Forbes billionaire.
.

I looking forward to BUA breakIing whatever left hegemony the Dangote establishment has on the nation.

.

I also look forward to when Nigerians would realise Dangote for the devil he is and attack his trucks nationwide. I wonder how many trucks he can protect.

silly submission,don't you know that some of the trucks with dangotes name are owned by some Igbo businessmen who uses dangotes name for easy passage on the roads?

Holiegrail2:
This Dangote man seems to be extremely greedy.

I am an Architect and a builder, I always prefer BUA cement to Dangote. The two no be mate for quality.

As at 2012, Dangote cement be like chaf for those in the industry then.

Block moulders know how far.

bobowaja:
Dangote and his silly monopoly. He can't compete fairly (even against his own people). I use to respect this man before now until I begin seeing him as a greedy individual. He is worst than a capitalist.

Na to deh short-change everyone cos he get people for high places. No be say na so him product good, they just give him the market and push down his substandard goods down on everyone.

Paadi paadi govt.

That's the truth

only lazy and selfish cowards fears competition in business.....after enjoying government patronage,waiversoand monopoly for monkey decades.....selfish businessman

Staphylococcus:


Nigerians don't read before jumping into conclusions.

I am sure you didn't read before arriving at a conclusion.

The typical shallow-mindedness & poor judgement of the Nigerian majority call for concern especially the supposed educated ones. It makes you ponder what future awaits us potentially

TSBO:
Na wa o. Except I missed it, I can't find one well thought out response to the original post. Just sentiments.

Nigeria does not grow enough sugar to meet demand. Therefore, most of the raw sugar input used by local refiners is imported.

A Sugar Masterplan was established so that we can develop domestic capacity to grow sugar instead of just importing. Now each of those three main refiners, Dangote, FlourMill and BUA, have a level of backward integration (sugar farming) they must reach and as they do, they are also given import quotas. If you meet your targets, you will likely get more room to import to make up what you have produced domesitcally. If you don't meet your targets, your import quota might be reduced. This is to encourage backward integration so that over time, we become self-sufficient WRT sugar.

According to the write-up, BUA's new refinery is primarily for exports; it's located in a free trade zone. So, it will primarily be importing raw sugar, refining and exporting. The concern noted by the industry expert is that due to its license from NEPZA, BUA can turnaround and sell it's product domestically if domestic prices are arbitrarily high (at this point, don't forget that the refinery will solely be using imported raw sugar; and yes, they will pay duty (60%) and levy (10%) if they sell domestically).

While it is a good idea to have someone that can stabilise local prices, the other players think this might be detrimental to the sugar masterplan, especially since, according to them, BUA has not really done well on that front. There should be full commitment to the Sugar Masterplan and a refinery in Nigeria that fully imports raw sugar may not be a step in the right direction and depending on whom you ask, might not show commitment by that refiner.

In summary, we all are still trying to achieve the Sugar Masterplan (I.e. reach self sufficiency in domestic production of raw sugar) and here you are creating a refinery that will only use imported raw sugar, and it's not like you are even doing well with the Sugar Masterplan. Also, it may be difficult to monitor that this sugar you are producing is not being sold in the Nigerian market.

I am neither for or against Dangote and Flour Mills but I guess it's rational for them to have misgivings in this situation.

On the other hand, the government can find ways to ensure BUA is more committed to local production and that they don't sell products from the new refinery in the domestic market.. If they can, it would cap what price others can sell at.. Not really a bad thing but it seems a bit unfair to others who are putting in more backward integration efforts.

Evolving world economies didn't get to where they are today by cutting corners. Case in point is Malaysia.
BIP & SMP are laudable schemes which are part-measures
to get out of economic doldrum e.g employment opportunities, more forex earnings, local earnings etc
BUA is taking the easy way out, an exercise that is detrimental to good of all
How does an individual go such a long way out of selfishness, self-centredness & opportunism towards personal aggrandizement without any modicum of integrity!?
BUA flawed greatly here Bro
Always out to quickly make cheap revenues from the nation's vulnerability!
Nonsense

JaceBlaze:
So that's how he became the "richest man in Africa"?

Your cool emojis getting u places, I see

MOBBDEEP:


Evolving world economies didn't get to where they are today by cutting corners. Case in point is Malaysia.
BIP & SMP are laudable schemes which are part-measures
to get out of economic doldrum e.g employment opportunities, more forex earnings, local earnings etc
BUA is taking the easy way out, an exercise that is detrimental to good of all
How does an individual go such a long way out of selfishness, self-centredness & opportunism towards personal aggrandizement without any modicum of integrity!?
BUA flawed greatly here Bro
Always out to quickly make cheap revenues from the nation's vulnerability!
Nonsense

I think the government should have found a way to link anything sugar to the SMP..
Policy harmonisation. That way, it may be a win win.. Just the way they've done with import quotas.

If you want to do export-only, show us what you've done on the BIP..

Godchosen001:
We are buying a bag of cement @ 3800, middle finger for you dangote

Yours is better. Here in my place in the South a bag of cement is N4000

TMKsouth:


Your cool emojis getting u places, I see

What do you mean by "getting u places"?

JaceBlaze:


What do you mean by "getting u places"?

I meant all the likes you were getting.

TMKsouth:


I meant all the likes you were getting.

Didn't know it was such a big dea.

JaceBlaze:


Didn't know it was such a big dea.

When u capture the mood with the right emoji, it is.

TMKsouth:


When u capture the mood with the right emoji, it is.

I was referring to the "likes" lol .

JaceBlaze:


I was referring to the "likes" lol .

Dude there's a reason there's competition to be the first to comment on a new thread. It's all about the likes for some people. Social media life and priorities

TMKsouth:


Dude there's a reason there's competition to be the first to comment on a new thread. It's all about the likes for some people. Social media life and priorities

Oh I see.So it doesn't matter how dumb the comment is,as long as it's the first one it gets likes?

JaceBlaze:


Oh I see.So it doesn't matter how dumb the comment is,as long as it's the first one it gets likes?

Just add 'xenophobia' in a South African thread and you'll get 100s of those.

TMKsouth:




Just add 'xenophobia' in a South African thread and you'll get 100s of those.

"White infrastructure" also works

JaceBlaze:


"White infrastructure" also works

LMAO

AsomArchitectNG:

Keep quiet I wasn't talking to you

na dem
Empty barrels