Dangote Tomato Factory struggling to run profitably over insufficient berries: CEO

*Dangote Tomato factory struggles to get enough berries to boost production as it is processing just enough to remain operational

*Our production demand has not been met so far, and we need to increase the volume of supply from the farmers, says Abdulkarim Kaita, Managing Director of Dangote Tomato Factory

Alexander Davis | ConsumerConnect

Against the backdrop of the reported farmers’ inability to garner enough resources to boost acreage of tomato farms in the country, Dangote Tomato Processing Factory, in Kadawa, Kano State of Nigeria, Africa’s biggest tomato processing factory, is barely managing to operate profitably.

ConsumerConnect learnt that six years after the factory began production in Kano, Northern Nigeria, it has been unable to get adequate berries to crush for producing tomato paste.

Photo: IGD-Lagos

The 1,200-tonne a day plant, owned by Sani Dangote, the immediate younger brother to Alhaji Aliko Dangote, Africa’s richest man, is producing at 20 percent of capacity because farmers don’t have enough resources to boost acreage.

The factory was meant to reverse Nigeria’s dependence on imports of tomato paste from

China and increase local production, Bloomberg report said.

It was learnt by 2017, the tomato manufacturing company had to idle the plant after pests destroyed vast swathes of the crop in the region of the country.

Report indicates that it took another two years, and a resolution of a dispute over payment to farmers, for the factory to resume output.

Commenting on the recent development, Abdulkarim Kaita, Managing Director of Dangote Tomato Processing Factory, said: “We haven’t been able to process enough quantity of tomato to make our operations successful.

“At the moment, we are counting losses.”

The crisis at Dangote’s tomato plant is said to be emblematic of the challenges faced by many businesses in Africa’s biggest economy.

While tomato farming employs an estimated 200,000 people, banks balk at lending to farmers despite President Muhammadu Buhari’s focus on boosting local production, according to report.

Such policy missteps, entrenched corruption and ethnic tensions are discouraging investments needed to add jobs in a country that has one of the world’s highest unemployment rates.

Segun Ajayi-Kadir, Director-General of the Manufacturers Association of Nigeria (MAN), stated that a dearth of clear-cut and realistic plans is eroding the expected gains from the government’s efforts at boosting local production in agribusiness in the country

The Dangote plant has sought to help Africa’s most populous country cut 300,000 tonnes of tomato-paste imports from China.

That’s even as an estimated 900,000 tonnes of tomatoes are lost locally every year due to a lack of storage and processing facilities.

However, farmers have not been able to supply the factory with the volumes needed to run at capacity.

The Managing Director of Dangote Tomato Processing Factory also stated that the factory is currently processing about 300 metric tonnes of the fruit each day, the highest capacity it has achieved since 2015, but barely enough to keep the plant operational.

Yet, the company said it incurs the same overhead costs, including power operation, as if it were operating at its full capacity.

Tomato processors also cannot import the berries to make up for inconsistent local supply of the produce.

This is overseas purchases of the fruit are barred by the Central Bank of Nigeria (CBN), which does not provide Dollars to import these items into the country.

That policy, report noted, is also fuelling inflation, which accelerated to 22.28 May 2021, about a four-year high.

As tomato farmers cannot get enough credit to boost output as banks are reluctant to lend for agricultural activities.

Tillers have also been harangued by armed marauders, gunmen, bandits and kidnappers.

“The issue is that our production demand has not been met so far and we need to increase the volume of supply from the farmers,” Kaita disclosed.

More so, it was gathered that most of the tomato farmers live in remote villages, and that makes it difficult for vehicles reach them.

As part of efforts at improving the situation towards boosting the tomato crop, the tomato factory is helping farmers by providing them with improved seedlings and encouraging more people to cultivate the product, report said.

Kaita was as well quoted to have stressed that the move has helped to increase the number of farmers to 6,000 from 1,000 in the last harvest season, but supply still was just enough to meet 20 percent of the factory’s production capacity.

Each farmer can produce at least 40 metric tonnes a hectare.

Going forward, the Managing Director of the company has stated the firm is now planning to create farming clusters next harvest season and is relying on a proposal by the central bank to provide credit to farmers to boost output.

Kaita added: “We’re optimistic that the 1,200 metric tonne capacity production will be achieved because every season is a learning experience for us.”

Kindly Share This Story