Nigeria: Dangote Firm Optimistic Govt's Import Restriction Will Aid Operations

16 September 2019

Dangote Tomato Processing plant has said it will be counting on the federal government's restriction of food imports to sustain operations after being idle for six months.

Bloombeg reports that the six months 'idleness' was after it (firm) initially resumed operations from an almost three-year shut down due to lack of raw materials.

Nigerian businessman, Aliko Dangote, launched the $20 million tomato processing facility in early 2016 with the aim of eliminating import of tomato paste mostly from China but the firm has suffered setbacks

Since the beginning of the rainy season in May, farmers are said to have switched to other crops making it difficult for the facility, which has the capacity to process 1,200-ton-a-day tomato paste, to reach its required feedstock.

The supply disruption, which lasted more than two years until match 2019, was also partly caused by a price dispute with farmers.

Even after the disagreement was resolved, the factory was unable to ramp up production beyond 20 per cent of its capacity due to inadequate supply of tomatoes, as most of the farmers lacked the needed credit to expand production.

The company is said to be losing at least N30 million every month 'with employees idle', according to the managing director of Dangote Farms, Abdulkareem Kaita.

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"We knew tomato is a seasonal crop before we started as it's the case in China and Europe,

"What we set out to do was reduce the post-harvest loss yearly to feed the factory," Bloomberg quoted Mr Kaita as saying.


Despite the challenges, Dangote Farms is pushing ahead with its original objective of replacing tomato-paste imports.

Earlier this year, the former minister of agriculture, Audu Ogbeh, had announced that the federal government will place a ban on the importation of tomato paste before the end of 2019.

Subsequently, President Muhammadu Buhari directed the Central Bank of Nigeria to remove foreign exchange support on some imported foods.

The bank is also implementing a new credit plan intended to help the farmers grow tomatoes all year round.

Meanwhile, Dangote Farms has also acquired a 5,000-hectare farm to grow a high-yield variety of tomatoes to meet its factory's requirements, while introducing the same strain to other farms to increase their productivity.

"With this, the output of the farmers would tremendously improve and the processing factory would record ample supply," Mr Kaita said.

Mr Kaita also wants the government to enforce its decision to cut the importation of tomato-paste to reduce dumping of subsidised paste on the Nigerian market.

"The effective implementation of the government's policy in restricting tomato paste importation will guarantee more investment in the tomato value chain, which will eventually lead to self-sufficiency in few years to come," he said.

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