The Dangote business that has been suffering in its 9 years of operation

The Dangote Tomato Processing business is currently faced with the challenge of the cost of operation, and competition from substandard foreign products.

• Dangote Tomato Processing business facing challenges of high operational costs and competition from substandard foreign products.
• Concerns raised about government negligence leading to the deteriorating state of the plant and allowing importers to flood the market with substandard products.
• Price and poverty are major factors influencing the market, causing difficulties for local operations to stay competitive.

The 9-year-old business owned by Africa’s richest Man, Aliko Dangote, and a subsidiary of the larger Dangote Group, is at the moment having a detrimental effect on Nigeria’s goal of becoming self-sufficient in food, owing to its deteriorating state, as reported by Business Day.

Abdulkarim Kaita, a former managing director of the firm, who spoke to BusinessDay revealed that the tomato processing plant’s present state stems from government negligence, which allowed tomato paste importers to enter the nation.

“The ones coming from China are not 100% tomato, they put all sorts of things like starch, flour, and just, maybe 10% of tomato and add colors, and we are programmed to use 100% tomatoes and buy fresh tomatoes from the farmers who cannot compete,” he stated

“Prices are changing daily in the Nigerian market and you have to move that price or you run out of business. How can we compete with that? There is no one who can invest locally and be able to compete with these smuggled tomatoes because they are so cheap,” he added.

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The former manager also disclosed how pricing factored into the plant’s fall-off.

“And the other thing is that because of poverty, price is a great factor, not quality. People just buy what they can only afford to eat. It became almost impossible to run our operations that was why we had to shut down,” he said.

“But for them, they believe that the people that were given waivers for concentrates have been reduced, because quite a number of these big companies are cutting backward integration.”

The former manager also pointed out that the implementing agencies were unsuccessful given that the smugglers continue to profit from the increased illicit trade, which is why tomato paste smuggling may never end.

Nigeria currently ranks as the 13th largest tomato paste importer in the world and third in Africa, importing over 1.3 million metric tonnes of the fruit and paste annually, as seen in the BusinessDay report.

This is because the country’s demand is currently three million metric tonnes, which forces it to rely on imported tomato paste to fill the supply gap.

A report by Tomatoesnews, in 2021, revealed that six years after it commenced operations, the Dangote, tomato processing facility has barely turned a profit due to its inability to get enough tomatoes to pound.

Given the lack of supplies, farmers at the time were only producing 20% of the 1,200-tonnes per day plant’s capability.

The goal of the facility was to boost domestic production and lessen Nigeria’s reliance on Chinese imports of tomato paste.

However, by 2017, bugs had decimated large portions of the crop, forcing the business to shut down the operation.

It took two more years for the plant to start producing again, as well as for a disagreement over farmer payments to be settled.

A more recent report by PremiumTimes butressed this point, stating; “Due to protracted difficulties in sourcing the feedstock, manufacturing activities at the facility have been stalled for years.”

The factory’s intended goal was to gain from farmers 900,000 tons of tomatoes wasted each year after harvest, so that importing 300,000 tonnes of processed tomatoes from China may be avoided in the pursuit of national self-sufficiency.