Dangote Group, owned by Africa’s richest man Aliko Dangote, opened a tomato-processing factory near Nigeria’s northern city of Kano aimed at vying for the local market with imports from China.
“We have fully started operations today and the target is 1,200 metric tons per day,” Abdulkareem Kaita, managing director of Dangote Farms Ltd., which runs the plant, said Tuesday in interview. “We are going to work with the farmers, they can afford to produce more because there’s a processing factory and they don’t 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. Yet the country produces 1.5 million tons of tomatoes annually of which about 900,000 tons rot, according to the Agriculture Ministry.
Dangote’s facility will produce more than 400,000 tons of paste annually, with most of its raw material coming from farmers in the Kadawa Valley in Kano state. 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.