Sonia Foods flays hike in tariff on tomato concentrate

Sonia Foods Limited has criticised the Federal Government’s new tomato policy, which raised duty on concentrate from five to 50 percent and imposed additional levy of $1,500 on each metric ton of tomato concentrate imported into the country.

Sonia Foods, owned by Nnamdi Nnodebe, says it is improper to impose a high levy on imported concentrate when no company is fully producing it in the country at the moment. The company canvasses five percent duty and five percent Value Added Tax (VAT) on concentrate.

The tomato processor says what the Federal Government should have done is to first 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.

In a statement sent to Real Sector Watch, the company states that time is not yet ripe for hike in the duty of concentrate, as local producers of the commodity are not operational owing to lack of suitable fruits.

The company says it has invested $15 million in the last seven years with an installed capacity of 30,000 MT, creating over 1,000 direct and indirect jobs, adding that one of its goals in the short term is to pursue backward integration to process concentrate, having reached an understanding with equipment suppliers and technical partners in this area.

“The major constraint is the supply of raw materials. We are also looking into how to assist the growers to increase their yield so that when we take off, our machines will be rolling in continuous production,” the company says.

The tomato maker states that the hike in tariff may be a precursor to granting quotas to some firms to import concentrate under the guise of filling the huge local gap, stressing that should there be any such quota, it must be given to local tomato makers who use concentrate as a raw material.

Sonia Foods states that the impact of the hike will be shifted to the consumers who may now have to pay higher.

The company says the impact of the hike in tariff will be job losses, increase in the retail price of tomato paste, idle industries and machinery as well as loan defaults.

“We note with regret that throughout the entire process leading to this policy, we were not invited to any meeting and our input not sought as stakeholders that have invested massively in the sub-sector,” the company states.

However, government’s new tomato policy has been hailed by some key players in the industry.

In a recent interview with Real Sector Watch, Eric Umeofia, chairman of Erisco Foods Limited, said the policy would steer tomato revolution in the country. Umeofia told this newspaper that he was producing tomato concentrate locally.

After months of closure due to lack of fresh tomatoes, Dangote Tomato in Kano has now reopened and is engaging local farmers, Real Sector Watch has learnt.

ODINAKA ANUDU