Dangote’s Nigeria Tomato Plant Resumes After Years Idling

LAGOS (Capital Markets in Africa) – A tomato-paste factory owned by Africa’s richest man, Aliko Dangote, resumed production in Nigeria’s northern state of Kano after staying idle for more than two years over a supply disruption partly caused by a price dispute with farmers.

The factory, with a capacity for 1,200 metric tons of tomato paste daily and targeted at meeting domestic demand, restarted production last week processing about 100 tons a day. It will ramp up output as tomato supply improves, according to Abdulkareem Kaita, the managing director of Dangote Farms Ltd, which owns the factory.

 “Our major challenge is the scarcity of the tomato,” Kaita said in an interview at the factory in Kadawa, outside the northern city of Kano. “The local tomato growers could not meet our production demand, we also could not agree with the farmers on the price of tomato per basket.”

Under a new deal with the farmers, the factory will buy tomatoes at prices pegged to what local markets are selling.

Dangote is also developing its own farms with a special tomato strain that could yield 60 tons per hectare, compared with the yield of 10 tons per hectare being recorded by the local farmers, Kaita said. The company plans to distribute the seedlings to growers to boost their output.

The plant, which started production in 2015, was to help Africa’s most populous nation cut paste imports of 300,000 tons a year from China by using an estimated 900,000 tons of tomatoes lost after harvest every year for lack of storage and processing facilities.

Dangote Farms is part of Aliko Dangote’s diversified group of businesses, of which cement manufacturing is the main one. The 61-year-old tycoon, who is currently building a vast $12 billion oil refinery close to the commercial hub of Lagos, is also invested in sugar and flour.

Source: Bloomberg Business News