BUA VS DANGOTE : THREE DECADES OF RIVALRY GOING AWRY
BUA VS DANGOTE
THREE DECADES OF RIVALRY GOING AWRY
The Kane and Abel Trilogy is the story of two men, who met
only once, but it changed their lives forever. The trilogy consisted of three
books:
Kane and Abel, The prodigal Daughter and Shall
We Tell the President.
They had only one thing in common. William Lowell Kane and Abel Rosnovski, one the son of a Boston millionaire, the other a penniless Polish immigrant The two men were born on the same day on opposite sides of the world, their paths destined to cross only once in their ruthless struggle to build a fortune.
Kane and Abel is a marvelous
story, spanning sixty years of two powerful men linked by an all-consuming
hatred, brought together by fate to save and finally destroy each other.
Aliko Dangote was
born into a wealthy family on 10 April 1957 in Kano, Nigeria.
He is best known as the founder, chairman, and CEO of the
Dangote Group, the largest industrial conglomerate in West Africa.
The Dangote Group was established as a small trading firm in
1977, the same year Dangote relocated to Lagos to expand the company. Dangote
received a ₦500,000 loan from his uncle to begin trading in commodities,
including bagged cement as well as agricultural goods like rice and sugar. In
the 1990s, he approached the Central Bank of Nigeria with the idea that it
would be less expensive for the bank to allow his transport company to manage
their fleet of staff buses, a proposal that was also approved.
Abdul Samad Rabiu
was born and raised in Kano in the north-western part of Nigeria.
His late father, Khalifah Isyaku Rabiu, was one of Nigeria's
foremost industrialists in the 1970s and 1980s. Abdul Samad is the founder and
chairman of BUA Group, a Nigerian conglomerate concentrating on manufacturing,
infrastructure and agriculture. He is also the chairman of the Nigerian Bank of
Industry (BOI)
Abdul Samad Rabiu established BUA International Limited in
1988 for the sole purpose of commodity trading. The company imported rice,
edible oil, flour, and iron and steel.[11]
In 1990, the government, which owned Delta Steel Company,
contracted with BUA to supply its raw materials in exchange for finished
products. This provided a much-needed windfall for the young company. BUA
expanded further into steel, producing billets, importing iron ore, and
constructing multiple rolling mills in Nigeria.
Years later, BUA acquired Nigerian Oil Mills Limited, the
largest edible oil processing company in Nigeria. In 2005 BUA started two
flour-milling plants, in Lagos and in Kano. By 2008, BUA had broken an
eight-year monopoly in the Nigerian sugar industry by commissioning the second
largest sugar refinery in sub-Saharan Africa. In 2009 the company went on to
acquire a controlling stake in a publicly listed Cement Company in Northern Nigeria
and began to construct a $900 million cement plant in Edo State, completing it
in early 2015.
Unlike Forsythe’s main characters, Aliko and Samad come from
two prominent families in Kano city.
The long-running feud between the two foremost Nigeria’s industries
filled media headlines recently with each company accusing the other of
sabotage, leading to calls for stronger rules and better enforcement against
anti-competition behaviour by businesses.
Dangote Industries Limited (DIL) and BUA Group, two of
Nigeria’s leading conglomerates, have reignited their over three decades old
war for market control.
The feud began in 2017 when Dangote Group accused BUA of
operating an unauthorized cement plant in Edo State, while BUA countered that
Dangote was trying to monopolize the cement industry.
The latest allegations from Dangote Group accuse BUA of
orchestrating a malicious campaign in the media by disguising as a concerned
citizen
Dangote ad BUA Group have a long history of rivalry between
them, as both companies had in the past been involved in running battles for
market control in different sectors of the economy ranging from sugar, salt,
cement, and fertilizer, among others.
BUA Group has accused Dangote of trying to stifle its major
rival and being scared of Abdulsamad Rabiu and BUA Group
Dangote Group has accused BUA of orchestrating a malicious
campaign in the media by disguising as a concerned citizen
BUA Group has responded to these allegations by reflecting
on the group’s age long history of hostilities, difficulties, and alleged hindrances
from the Dangote Group.
BUA Group has reaffirmed its commitment to innovation,
integrity, and inclusiveness, saying the company’s history is marked by hard
work, not entitlement.
DIL management explained that the same false report back “in
2016 was now being given a fresh false slant by one Ahmed Fahad purporting it
to be a new petition directed to the attention of President Bola Ahmed Tinubu
and Mr. Jim Obazee, the Special Investigator probing the CBN, and subsequently
different blogs and social media platforms have been carrying variants of this
arrant falsehood to the detriment of our corporate reputation.”
The statement said “attempt by the authors of this
misleading allegation to give it a fresh life in the media is baffling as the
two newspapers that were misguided into publishing it as advertorial then
(2016) have since publicly apologised to the Management of Dangote Industries
Limited in writing as well as retracted the advertorial in its entirety in
their respective publications.
In response to Dangote’s allegations, BUA Group issued a
comprehensive statement on Friday, November 3, 2023, reflecting on the group’s age
long history of hostilities, difficulties, and alleged hindrances from the
Dangote Group.
BUA Group reaffirmed its commitment to innovation,
integrity, and inclusiveness, saying the company’s history is marked by hard
work, not entitlement.
BUA Group expressed dismay at what it perceives as baseless
blackmail and described Dangote’s allegations as cheap attempts at blackmail
leveled against BUA by Aliko Dangote in a recent 7-page editorial following
months of sponsored campaigns of calumny against them using third-party
platforms.
BUA Group also stated that the antecedents of Dangote Plc in
trying to outmuscle competition are not in doubt, and various cases abound
within and outside the cement industry.
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.
In its response, BUA Group noted “It’s with a profound sense
of responsibility and a heavy heart that we address the claims and very cheap
attempts at blackmail levelled against BUA by Aliko Dangote in a recent 7-page
editorial following months of sponsored campaigns of calumny against us using
third-party platforms. To put things in perspective, it’s imperative to revisit
history—a history not of rivalry but of resilience; not of enmity, but of
endurance.
The company went as far back as 30 years ago narrating tales
of purported underhand dealings by Dangote to snuff life out of the business.
The company claimed it started with the presentation of dud cheque by their
rival. “He gave us a Societe Generale Bank of Nigeria Cheque, which bounced
upon presentation to the bank. Unbeknown to us, this was a ruse that would lead
to a court-sanctioned freeze of our assets orchestrated by Dangote.
For three agonising months, our accounts were garnisheed,
warehouses shuttered, and our spirit tested. Yet, from the ashes of deceit, BUA
survived
It went downhill from there. The company accused the Dangote
attempting to scuttle its plans for a sugar refinery in Lagos through those
with political power.
BUA also accused Dangote of trying to run it out of the
cement business after being issued licence by the Yar’adua government. “Our
application to dock the floating terminal in Lagos met with resistance. We then
decided to berth the ship at the terminal we owned in Port Harcourt. Despite
this, we faced considerable pushback and it took the decisive intervention of
late President Yar Adua, who directed that the Minister of Transport and the
Chairman of NPA honour our right to contribute to the nation’s growth.
“Upon hearing of what had happened, we reached out to Tanimu
Yakubu, the then Chief Economic Adviser, who acted with the urgency that the
situation demanded. His call to the Comptroller General of Immigration was a
lifeline, and our expatriate team was brought back from the Emirates aircraft
and not deported. The aftermath was swift action by the President, who ensured
that such a misuse of power would not go unchecked. Deputy Comptroller General
Brown, caught in a tangle of undue influence, admitted what he did to the
Minister, and he was later dismissed.
As expected these accusations and counter accusations have
drawn considerable attention but with both companies publishing dirt about each
other, it remains to be seen how this would enhance their individual esteem in
the public’s eye.
This points to Nigeria’s need for stronger anti-competition
rules. The very nature of capitalism lends itself to anti-competition
behaviour, this is why governments ensure market rules engender fair
competition.
The growth of large-scale firms along with technological
advances in industrial and agricultural production, improvements in
transportation and communication networks and deflationary circles undermine
weaker firms and encouraged corporation consolidations that attain greater
economies of scale and scope.
These conditions are
gradually becoming prevalent in Nigeria as firms like Dangote Industries, BUA
Group among others are increasingly play pivotal roles in the economies of
Nigeria and other African countries.
The Federal Competition and Consumer Protection Act 2018
(the Act) is the main anti-competition law in Nigeria. The Act establishes the
Federal Competition and Consumer Protection Commission (FCCPC) as the
regulatory body. The FCCPC has far-reaching powers including the power to enter
and search premises, summon and examine witnesses, call for and examine
documents, and do such other things as it considers necessary for the effective
performance of its functions.
The Act further empowers the commission to check abuse by a
company with a dominant position in a market.
A company is said to abuse its dominant position where it
charges an excessive price; refuses to give a competitor access to an essential
facility when it is economically feasible to do so; and engages in an
exclusionary act unless it can show that the technological efficiency and other
pro-competitive gains outweighs the anti-competitive effect.
The punishment for contravention is a fine not less than 10
percent of its turnover in the preceding business year or such higher
percentage as the court may determine under the circumstances of the particular
case..
A critical examination of the claims and counterclaims by both
BUA and Dangote indicate efforts to influence government officials to give aid
or undermine a rival.
In other words, there is no way you can operate in these
industries without selling your soul to politicians since they hold the powers
to advance or cut you off.
As these two men fight, they are sending the wrong messages
to the world on some of the critical sectors. How fast a president or a
minister could pick your call is what really matters, and not the ideas you are
bringing to the market.
Competition encourages individual businesses to innovate and
find ways to work more efficiently resulting in gains like lower prices, better
quality products and services and more choice for consumers. This rarely leads
to the emergence of stupendous wealth amid mind-boggling penury.
For competition to stay healthy, it is the responsibility of governments to enforce rules that will make businesses behave in an acceptable way towards competitors and suppliers
Government must, as a matter of urgency, exert its regulatory
authority, with high neutrality, before the two brothers destroy each other and
their high-employing businesses.
The government has to intervene lest the three-decade old
rivalry really goes awry.
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