Dangote, BUA rivalry heats up in media war

ONOME AMUGE

The long-standing rivalry between two of Nigeria’s biggest conglomerates, Dangote Industries Limited (DIL) and BUA Group, intensified in recent times as the two companies vie for market control in a range of sectors including sugar, salt, and cement in Africa’s largest economy.

Abdul Samad Rabiu (BUA) and Aliko Dangote (DIL), the chairmen of their respective conglomerates, both come from influential families in Kano State. They are also among the wealthiest individuals in Nigeria, with Dangote worth $14.2 billion and Rabiu worth $7.6 billion, according to the Forbes list of Nigerian billionaires for 2023.

Both Rabiu and Dangote are widely regarded as astute industrialists and champions of economic growth in Nigeria. However, their rivalry has intensified beyond the bounds of healthy competition, as they struggle for control of the industrial sector, particularly the sugar and cement industries.

Market data shows that Dangote Cement has a dominant market share of over 60 percent in the Nigerian cement industry, while BUA Cement has a share of around 20 percent. These market shares demonstrate the considerable market influence and competition between the two companies.

The competition in the sugar industry is similarly intense, with Dangote Sugar Refinery accounting for over 70 percent of the Nigerian sugar market, while BUA Sugar has a market share of around 20 percent.

Despite the market share percentages suggesting that Dangote is dominant, BUA’s rapid growth and management’s strategic approach have enabled it to compete fiercely with Dangote, gaining more market share and popularity among consumers. BUA’s cement price cuts have also helped the company gain popularity and market share at the expense of Dangote, whose cement products, market surveys show, are more expensive.

Industry analysts have described the price cuts and subsequent media attacks as a potential time bomb, further intensifying the rivalry between DIL and BUA. 

Dangote Industries Limited accused BUA Group of mounting a smear campaign in the media under the guise of being a concerned citizen, but BUA Group has refuted the claim, pointing to how it has overlooked its rival’s attempts to put it out of business in the past.

Dangote, in a seven-page statement titled: “Economic Sabotage: Our Stand”, published in the media on November 2, dismissed claims of its investigation for alleged illegal foreign exchange deals and money laundering worth $3.4 billion. The company described the report as a rehash of a similar report published in 2016 by a rival that had masqueraded as a concerned Nigerian.

The statement reads in part: “The attention of the management of Dangote Industries Limited has been drawn to an unfounded allegation making the rounds in some online media, suggesting that the Company is being probed over alleged illegal foreign exchange laundering running to $3.4bn allegedly perpetrated by the Central Bank of Nigeria under the leadership of Mr. Godwin Emefiele over the years.

“As an organisation, it is not in our custom to respond to any spurious allegation. Still, since it is a rehash of a similar report peddled out of malice by a competitor masquerading as a concerned Nigerian in 2016, we are constrained to provide context to this issue.”

Dangote  pointed out that the allegations of illegal foreign exchange deals and money laundering were turned down by credible traditional and online media outlets until the claims were featured as a paid advertorial in two Nigerian newspapers, BusinessDay and Leadership, in 2016. The advertorial, which was published under the name of David Osa Ighalo from Edo State, accused Dangote Cement of economic sabotage.

DIL noted that the publication in BusinessDay and Leadership newspapers, published on March 16, 2016, claimed that funds were moved from the company in question to other Dangote companies outside Nigeria.

The statement alleged that nearly $3 billion had been taken out of Nigeria via these means, thus encouraging money laundering and round-tripping. Dangote noted that Ahmed Fahad recently gave the accusations a new false slant by presenting them as a new petition addressed to President Bola Ahmed Tinubu and Jim Obazee, the special investigator probing the CBN.

In response to Dangote’s statement, BUA issued its own seven-page rebuttal. The rebuttal described how it has resisted DIL’s activities for 32 years, as the two organisations competed for control in their respective market segments.

BUA’s rebuttal partly read, “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.

“In August 1991, a young BUA was doing its commodities trading business just as Nigeria faced a scarcity of sugar. As sugar was scarce, BUA was lucky to be one of the few with any stock for sale, and we stood prepared to supply the nation’s needs as best as our stock could. It was during this period Aliko Dangote approached us to purchase sugar. 

“If only we knew he was setting the first of many traps in our business history. 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.”

BUA added that, in its efforts to open a sugar refinery, it leased the land of Usman Dantata (Aliko Dangote’s uncle) at the Tincan Island port. The company secured the NPA’s approval and paid all necessary fees, but Dangote had the land revoked by then-President Olusegun Obasanjo and given to him instead.

According to BUA, Dangote attempted to use every possible tactic to delay and hinder its cement and sugar projects. These tactics included: causing delays in acquiring the necessary licences, blocking access to funds, and preventing the construction of required infrastructure. These actions, BUA explained, were designed to give Dangote an unfair advantage over its competitors and prevent BUA from competing in the cement and sugar markets.

BUA’s advertorial concluded by stating thus: “For over 32 years, we have been cast as the antagonists in a narrative woven with malice. We have not just survived; we have thrived, expanding our operations and contributing to Nigeria’s economy without resorting to subterfuge.

“To Mr. Dangote and the Dangote Group, we say: Let us build, not belittle. Let us cultivate, not conquer. While we may share the marketplace, we need not share malice.

“In closing, we at BUA remain committed to our ethos of innovation, integrity, and inclusiveness. Our history is not one of being handed anything on a silver platter. We will continue to serve our beloved country and its people with the diligence and honour they deserve. Our past, present, and future activities are rooted in the prosperity of Nigeria, undeterred by the winds of unfounded criticism. We remain focused on building and developing Nigeria.”

The rivalry between Dangote and BUA is likely to continue for the foreseeable future, given the intense competition and allegations made by both sides, according to people familiar with the tiff. 

Analysts have noted that while the allegations against both companies have not been proven in court, they highlight the conflict between the two groups and their political connections.

A similar public dispute between Dangote and BUA occurred in April 2021 over the sugar industry, which was resolved through mediation by former Kano State governor, Abdullahi Ganduje, who met with both parties in Abuja.

The latest dispute between Dangote and BUA is difficult to predict, and there are concerns that the rivalry could have a negative impact on the Nigerian economy. Rather than competing in a healthy way to foster the country’s industrial sector, the two companies are focused on dominating the other, which may have negative impact on the Nigerian economy, particularly the commodities market where duopoly has created a problem of limited options for the consumers, say multiple analyst sources who have been following the happenings.