Battle royale between two cement-making giants

By Ralph Tathagata

The frosty relationship between the Dangote Group and the BUA Group appears not to be disappearing any time soon, as the duo of Aliko Dangote, Founder of Dangote Group and Abdulsamad Rabiu, Chairman of BUA Group put on their boxing gloves once again.

Mr. Rabiu has an estimated fortune of $8.2 billion and his company, BUA Cement PLC, owns 20 percent of the domestic market share for cement. Mr. Dangote’s wealth, on the other hand, is estimated at $14.2 billion, and he owns Dangote Cement PLC, which is the largest cement producer in Nigeria with 69 percent of the market share.

Recently, Mr. Rabiu caused a ripple in the Nigerian cement market by crashing cement price from N5500 to about N3500. Before announcing the price crash, the BUA Cement boss had a meeting with President Bola Ahmed Tinubu mentioning that the 40 percent price reduction was part of his company’s contribution in support of the Federal Government‘s efforts to stabilise the prices of essential commodities in the country.

It would also be recalled that in June 2020, BUA Cement got a restraining order against Dangote Cement after the police invaded its three sites in Obu Okpella, Edo State. At that time, Mr. Rabiu alleged that Mr. Dangote had engineered the entire disruption.

What’s more? This clash of the titans transcends the cement category to sugar as well. Basically, the BUA chairman deals in cement and sugar. However, the competition for the market shares of these essential products usually have him engage in a running battle with the Dangote Group boss who, like Rabiu, is also from Kano State.

Speculations are rife in the Nigerian social media space that the rift between Dangote and BUA is brewing again. While some are still trying to figure the kernel of their kerfuffle, others know that it cannot be far from the usual cat-and-dog sort of business relationship.

In the most recent battle, Dangote Industries Limited (DIL), which is also the producers of Dangote Sugar and Dangote Cement, has written to warn against linking the firm to any form of economic sabotage. It gave the warning following claims, suggesting that the company is being probed for an alleged illegal foreign exchange deals and money laundering.

In a statement, DIL described the allegation as “spurious and a rehash of a similar report peddled out of malice by a competitor (BUA Group) masquerading as a concerned Nigerian in 2016.”

The statement, signed by the management of DIL, re-emphasised that foreign exchange for its numerous projects were sourced strictly from Interbank Foreign Exchange market in compliance with the CBN approvals. It pointed out that, “Letters of Credit” were established for the construction of the various operational plants and for the purchase of heavy equipment and spares required for the take-off of the Dangote Cement plants.”

Explaining its forex dealings further, the DIL said: “All FX purchased in respect of our African Projects expansion were fully utilised for what they were meant for. The projects for which the FX was utilised are visible for everyone to see. It is on record that some of these projects were commissioned by Nigerian top-ranking government officials and in attendance were Chief Executives of various banks, Captains of Industries and the Presidents of the host countries supported by their Senior Government Officials.”

The company further stated that funds invested in its expansion project across African countries are legitimate capital investments in those countries and the repatriation of FX in sum of $576 million so far has helped to boost foreign Exchange earnings in Nigeria and stabilise the FX Market.

The Dangote Group also noted that all the payments made in respect of its various African Projects can be further verified, having been audited over the years by its auditors, Messrs Deloitte & Touche and KPMG in course of their statutory audits. It added that, specifically, CBN gave DIL approvals between 2010 to 2018 to purchase FX totaling $3.755billion from the Interbank market for the funding of its various African Projects out of which the group has utilised only 47.70 percent of the approvals in the total sum of N1.791billion.

It would also be recalled that the closest rival of Dangote, BUA, once accused DIL of orchestrating an economic sabotage on Nigeria, and gave reasons why he (Mr. Dangote) must be stopped before it is too late. In a letter dated December 4, 2017 and published in the Nation and other national dailies, signed by Mr. Rabiu titled: “A Cry for Help: Wanton Abuse of Power by a Serving Minister Geared Towards Sabotaging Operations of BUA Cement”, he alleged that Dangote had a “sinister plot” which extended from the cement to the sugar industry and mines. He accused Dangote of attempting to shut down his planned sugar refinery in Port Harcourt to keep sugar prices high and maintain his monopoly over the commodity.

Also, in a much later Premium Times report titled “Inside the Dangote, BUA sugar war” April 9, 2021, Mr. Dangote said in a letter jointly signed with Flour Mills of Nigeria Plc, a fellow maker of the product, that BUA failed to invest substantively in local production or comply with its undertakings under its BIP. They accused BUA at the time of only importing and refining raw sugar and sabotaging the backward integration policy the National Sugar Development Council (NSDC), whilst claiming to be investing in developing sugar plantations in order to qualify for quotas to import raw sugar.

The BUA Group responded by saying that its company takes serious exception to the claims by its two major competitors that it aimed to circumvent the BIP of the sugar industry. BUA claimed that it had invested billions of naira and was almost nearing completion of the BUA Port Harcourt export-focused refinery.

From cement to sugar, two major products that Nigerians cannot do without, it has been a running battle between Dangote and BUA. Whether this protracted battle royale will ever come to an end, is yet to be seen.


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