Aliko Dangote has shut down his new tomato paste plant in Kano due to a shortage of dollars needed to import raw materials, a senior executive has said.
This is the second of such closures in months, in a blow to the Federal Government’s drive to diversify the economy.
President Muhammadu Buhari frequently speaks of ending Nigeria’s dependency on oil exports by boosting food production, repeating his mantra: “We must produce what we eat.”
But the country is mired in recession and struggling with dollar shortages due to low oil prices.
Entrepreneurs say the crisis has been worsened by the central bank’s decision to keep an artificially high exchange rate, which has dried up dollar supplies, forcing firms to buy them on the black market at a 40 per cent premium.
“Where the foreign exchange is not available, we are cutting down our operations. For example, we had a tomato-based processing plant, we have shut it down,” Devakumar Edwin, a senior executive with Dangote’s business, told Reuters in an interview.
Tomato paste is a staple food in Nigeria but the country imports much of its supplies from China.
Dangote’s plant opened only last year amid much talk from officials predicting a new era of Nigeria producing its own tomato paste, displacing costly imports.
The dollar scarcity has also forced Dangote to cut down on other food businesses such as flour milling, sugar refining and vegetable oil refining, Edwin said.
The tomato plant may reopen once the company is able to source raw tomatoes locally, he said.
In November, Erisco Food closed a tomato paste plant in Lagos, eight months after opening it, due to a shortage of hard currency needed to import raw materials. Some 1,500 staff members reportedly lost their jobs.
Erisco had hoped the government would support local producers by banning imports of tomato paste, as it had done in the past with cement or some fruits to help manufacturers.
The nation produces around 1.5 million tonnes of tomatoes a year but the bulk of them begins to rot before they get to the market due to poor roads and storage facilities.
Aliko Dangote’s decision to open an assembly plant in Lagos will create about 3,000 jobs it has been learnt. T
The deal for the $100 million, 10,000 per year capacity plant was signed in May 2014, according to China Daily, making it the eighth of Shandong, China-based National Heavy Duty Truck Group Company Limited (Sinotruk), to be built abroad.
The plant will be 60 per cent owned by Dangote Group, trading under Dangote Industries Limited, leaving Sinotruk with the remaining 40 per cent equity stake.
Consequently, Dangote Agro Sacks Limited, which occupied the Ogba premises until recently, has been relocated closer to the group’s major operational hubs, particularly the cement plants in Obajana, Kogi State and Ibeshe, Ogun State.
Nigeria remains one of the most important markets for Sinotruk, with Dangote Group using the product for distribution of its products, like cement, sugar, flour and pasta, among others, even in its plants across the continent.
The deal is also coming ahead of next year’s opening of the $17 billion, 650,000 barrels per day capacity Dangote Refinery located in Lagos expected, to begin operations next year, creating over 300,000 direct and indirect jobs by first quarter of 2019, which would require a lot of long trucks for product distribution.
FORBES Magazine has released its annual list of the richest men in Africa, this year’s list contains just 21 names with Nigeria’s businessman mogul Aliko Dangote taking the top spot.See full list below;
The Dangote Group has dismissed 109 workers at Obajana Cement Company in Kogi State, after being found guilty of various offences, Abdulahi Magaji has said.
Mr. Magaji, the coordinator of the company’s Patrol Team, announced this to journalists on Tuesday at the Obajana premises of the company.
He said that the dismissed workers were among the 244 suspects arrested between May and November.
According to him, they include erring drivers, owners of illegal haulage, and those stealing the company’s properties among others.
He said that another 115 workers were being remanded in prison custody pending the determination of their cases.
“I am happy to inform you that we have arrested and recovered five stolen trucks; but unfortunately, the products have been stolen.
“It is interesting to note that one of the kingpins, Samaila Yakubu, who specialised in stealing our trucks in collaboration with some drivers and buyers, has also been arrested.
“It is this group that has been terrorising our trucks in the South East and South South axis,” Mr. Magaji, a former commissioner of police said.
The coordinator said that the President of Dangote Group, Aliko Dangote, had directed that misconducts by drivers should be reduced to the barest minimum.
“We have pasted warnings clearly on the cab of all our trucks prohibiting carrying of goods and passengers apart from company’s products.
“We are calling on the law enforcement agencies to support the efforts of the Dangote Group in arresting those who break the laws of the company,’’ he said
He explained that the efforts of the patrol team had helped to reduce accidents in the fleet, adding that more measures would be put in place to reduce accidents.
The News Agency of Nigeria, NAN, reports that the major duties of the National Patrol Unit of Dangote Group are to stop illegal haulage and reckless driving by Dangote drivers.
The patrol unit also prevents diversion of products, driving of Dangote trucks by unauthorised drivers, and enlightenment of drivers on traffic rules among others.
Africa’s richest man Aliko Dangote has shut down his cement plant in Tanzania due to high energy costs and a technical glitch at the $500 million factory, according to a government source, who confirmed reports in Tanzanian media.
Executives at Dangote Industries Tanzania have recently complained about the government’s failure to provide the company with cheap fuel and other logistical solutions. Dangote Cement had previously requested the government-owned energy company, the Tanzania petroleum Development Corporation (TPDC), to supply its Mtwara-based cement plant with natural gas at significantly subsidized prices – a request the government body turned down.
Dangote cement spends as much as $4 million on diesel every month powering its cement factory.
“Our plant uses six million liters of diesel per month to run generators after the promises to supply it with natural gas, which is produced in a nearby gas field, failed to materialize,” Dangote Tanzania CEO, Harpeet Duggal, had told a group of politicians in October.
Dangote plant was strategically built in Mtwara, in Tanzania’s southeastern region, to take advantage of cheap natural gas that is extracted in nearby fields. While the previous government led by former President Jakaya Kikwete had promised Dangote cheaper prices for natural gas, the TPDC under the government of President John Magufuli has refused to honor the agreement.
In a bid to mitigate its energy costs, Dangote Industries has resorted to importing coal from South Africa, which is cheaper than natural gas – a move that has greatly upset top government officials in the Magufuli-led government, primarily because Tanzania also possesses substantial deposits of coal.
In August, the government banned the importation of coal from South Africa – a move that pundits believe was specifically targeted at Dangote.
The Tanzanian government has repeatedly requested that the cement behemoth source its coal locally, but Dangote executives have complained that the coal, which is mined from Songwe region, hundreds of kilometers away from Mtwara, is of poor quality and unreasonably expensive.
Today marks the dawn of a new era in Benin, Edo State as the Crown Prince, His Royal Highness, Eheneden Erediauwa, ascends the revered throne to become the 39th Oba of Benin, succeeding his late father, Omo n’Oba n’Edo Uku Akpolopkolo, Oba Erediauwa.
The crowning was done at a private ceremony inside the Usama Palace, a temporary building erected for the coronation ceremony.
Edo state governor-elect; Mr Godwin Obaseki here, Alhaji Aliko Dangote, APC National Chairman; Chief John Odigie Oyegun, Vice President Yemi Osinbajo and governor Adams Oshiomhole, Ooni of Ife, and other dignitaries -have arrived Benin Kingdom to join the people of Edo State celebrate the coronation of new Oba Eheneden Erediauwa.
See photos below…