(Sundiata Post) — Nigeria’s Federal Government through the Central Bank of Nigeria (CBN) provided money running into billions of naira to Dangote Tomato, Erisco Foods, Vegefresh Group and Savannah Group to enable them process fresh tomatoes into triple concentrate, but none of them is currently doing so.
Erisco Foods took N2 billion in two tranches; others got between N1 billion and N10 billion in different tranches, industry sources say.
Dangote’s Tomato plant in Kano has been under lock and key for more than 15 months now due to issues ranging from off-taker disagreements to irregular supply of fresh fruits by farmers. It is the only company with the capacity to process fresh tomatoes into triple concentrates, but its inactivity is perpetuating the party of triple concentrate importation and smuggling into Nigeria.
Before the Federal Governments Tomato Policy came on stream last August, some players had convinced the government that they had the capacity to produce triple concentrate locally to stop the $170 million concentrate importation market.
This prompted the government to impose a levy of $1,500 on a ton of triple concentrate imported from China, USA and other parts of the world, including a 50 percent tariff, to protect the industry.
But one year down the line, those in the tomato value chain are all importing triple concentrate because it is not produced locally and the government is unwilling to implement the policy due to this reason.
Government is also reluctant to remove the 25 percent import duty policy for greenhouse equipment to zero percent as contained in the policy paper.
Currently, the factories of those importing triple concentrate for onward processing such as Savannah Foods, Vegefresh, Manto Tomato Processing Plant (in Gombe), Spring Field Agro, Erisco Foods and Perfect Integrated Foods, are either shut down or processing skeletally due to the unsustainable price of tomato.
The price of a kg of tomato is N80 to N500, depending on the source. This means that a ton of fresh tomatoes sells for between N80, 000 ($262) and N500, 000 ($1,639).
Processors need four tons of fresh tomatoes to produce a ton of concentrate, meaning that they spend N320,000 ($1,049) and N2 million ($6,557) to produce one ton.
On the maximum, processors need to pay between $100 to $200 per ton of fresh tomatoes to be competitive. These were not factored into the policy document.
The consequence of this is that there are fresh tomatoes everywhere but no company to buy.
“This season alone our members have lost N10 billion due to poor market and lack of guaranteed off takers. The open market cannot mop up all the harvest,” said Sani Danladi Yadakwari, national general secretary, Tomato Growers Association of Nigeria (Togan).
Yadakwari said tomato paste packers are conspiring with Chinese tomato paste manufacturers to distribute substandard products to unsuspecting Nigerian consumers.
“We have about 120 metric tonnes (MT) of concentrate since March, but nobody is buying,” said Abdulkarim Kaita, managing director, Dangote Tomato Processing Factory in a response to BusinessDay questions.
“Ours is 100 percent tomato, but imported concentrate, which is only 30 percent processed tomatoes with starch and preservatives, is cheaper when compared to the locally processed 100 percent fresh tomatoes concentrates,” Kaita said.
“The tariffs are supposed to protect local paste and concentrate manufacturers in the country but it is not effective.”
Prince Samuel, chairman and managing director, Vegefresh Group, told BusinessDay that the cost of fresh tomatoes for processing is very high.
“We are not globally competitive in food production in a way that allows the processors take fresh produce and process to sell at international competitive prices. The issue is not about tariffs but how do we produce and be globally competitive. We need policy consistency and not policy somersaults. It takes between three to five years to see a policy effect, but sometimes we changes policies from time to time,” Samuel said.qe
To help salvage the situation, Nnamdi Nnodebe, managing director of Sonia Foods Limited, said: “Provide seedlings to farmers to cultivate the specie of tomatoes more suitable for the production of concentrate and improve tons per hectare of the local farmer.”
(BusinessDay)qeeee