As part of efforts to boost local production and indigenization, as well as industry diversification, Dangote Group, owned by Africa’s richest man, Aliko Dangote, has opened a tomato-processing factory near Nigeria’s northern city of Kano to compete with China’s imports for the local market.
Managing Director of Dangote Farms Ltd, which runs the plant, Abdulkareem Kaita, said on Tuesday that the factory has a target of 1,200 metric tons per day, and has fully started operations as at yesterday.
Abdulkareem Kaita explained that the factory would work with the local farmers, as they can afford to produce more because there’s a processing factory and they no longer have to suffer losses like they did before.
The plant that will produce 1,200 metric tons per day was built following a 2011 Central Bank of Nigeria study that showed it was cheaper to process tomato paste locally than import from China, the source of about 300,000 tons a year, worth $360 million.
Ministry of Agriculture statistics reveal that the country produces 1.5 million tons of tomatoes annually, of which about 900,000 tons rot away.
Farmers will receive a guaranteed price of about $700 per ton compared to an average of less than $350 now, according to estimates by the Central Bank, which helped organize the farmers and arrange credit from banks.
The Dangote Group owns businesses including cement plants, flour mills, fruit canning plants, palm oil refineries, salt and oil assets.
Nigeria is the 14th largest producer of tomatoes in the world and the largest producer of tomatoes in sub-Saharan Africa.
Ironically, it is the eighth largest importer of tomato paste in the world after Iraq and Japan. The tomato paste industry in Nigeria has been able to grow due to importation from mostly China and Italy.