The future of Dangote Tomato Processing Limited, a multi-billion-naira plant which is one of the subsidiaries of the business interest of African richest Man, Aliko Dangote, is currently in jeopardy, as a result of fierce competition from substandard foreign products, and cost of operation.
The nine years ago, Dangote Group established in Nigeria’s largest fresh tomato production hub in Kadawa, in the Northwest State of Kano, is at the moment rusting away, a development that is negatively impacting Nigeria`s quest for food self-sufficiency.
Tomato, and its derivative paste, are popular fruits/veggies, and one of the main ingredients in use in many Nigerian and international dishes, as well as in the beverage and pharmaceutical industries.
Nigeria is the second largest producer of tomatoes in Africa, and 14th globally, with an average yearly yield of 2.3 million metric tonnes, accounting for about 65% of all tomatoes produced in West Africa.
50% of fresh tomatoes produced yearly in Nigeria, are lost to post-harvest challenges, including poor supply chain management manifesting in inefficient storage facilities and poor transportation systems.
Latest NBS`s data indicates that Nigeria in 2024, expended over 360 million US dollars in the importation of tomato paste from China, United States, despite being one of the countries with high quality tomatoes in the world, which can be used for juice, ketchup, and, paste.
While responding to enquiry from BusinessDay, about the company, Abdulkarim Kaita, a former Managing Director of the company, attributed the current State of the company, to Government’s inaction that created access to importers of tomato paste into the country.
Read also: The reopening of Dangote’s tomato factory
Kaita confided that there is practically no way for the local industries, like Dangote, to compete with the tomato products coming from China in terms of price.
“For the past four years, Dangote Tomato has shut down. The company was sourcing local tomatoes to produce, but the high cost of energy, and the high cost of fresh tomatoes made it impossible for us to compete with the imported substandard ones coming from China.
“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 colours, and we are programmed to use 100% tomatoes and buy fresh tomatoes from the farmers who cannot compete. “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.
“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.”
“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.”
Kaita alleged failure by the implementing Agencies, noting that as the smuggling through the borders is increasing, the smugglers are making more money, which is the reason smuggling of tomato paste may never stop.
Currently, the national demand stands at three million metric tonnes, leading to reliance on imported tomato paste to bridge supply gap, and Nigeria at the moment ranks as the 13th largest importer of tomato paste in the world and third in Africa, importing over 1.3 million metric tonnes of the fruit and the paste yearly.
However, the country still depends solely on importation, as the demand far outweighs the supply, about over 1.3 million metric tonnes of the fruit and the paste are imported yearly into the country, which makes Nigeria the third largest importer of tomato paste in Africa.
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