Tomato paste brands’ war heightens as local manufacturers caution

Tomato paste brands

Though the tomato paste industry in Nigeria has witnessed steady growth in spite of influx of foreign imports, a situation some experts linked to government incentives to encourage local  production. However, local manufacturers believe the market competition may soon be scuttled as a result of the restriction placed on importation of concentrates. In this report, DAVID AUDU takes a look at the determination of local manufacturers to remain relevant in spite challenging competitive environment.


A visit to any market or shop in Nigeria will reveal dozens of tomato paste brands, some produced locally while majority are imported. Analysts simply described the paste market as lucrative and healthy with enough room for local and foreign products to compete.

But, when the government of President Mohammadu Buhari early into the administration decided to restrict the importation oftriple concentrate, a major raw material in the production of tomato paste, stakeholders though welcomed the policy, which they described as good effort to encourage backward integration by indigenous tomato producer, they are however of the opinion that the decision will tilt the competition in favour of imported products. They based their argument on the facts that though Nigeria produces large quantities of tomatoes, the quality is low and therefore local manufactures still need the imported input to enable them competes with imported tomato pastes.

 One of the major issues which local manufacturers highlighted and want government to look into borders on the need to allow them to continue to import concentrates at minimum interest rate pending when the local industries will develop full capacity to manufacture the concentrates locally, which some say are already doing. For members of the Union of Tomato Manufacturers of Nigeria, government still needs to protect local tomato industries in order to encourage backward integration, saying that there are specific sectors that will need time and incentives to develop.

The restriction policy as it affect concentrates they say will adversely affect local manufacturers as they might not have the capacity to manufacture triple concentrate and compete favourably with imported ones.

According to analysts, the policy when viewed from the side of the federal government and the dilemma of indigenous tomato paste manufacturers dates back to the previous government when the then Central Bank of Nigeria Governor, Mallam Sanusi Lamido Sanusi wanted to address the issue of continued importation of tomato pastes. Specifically, when it was discovered in 2014, that about N16 billion was being spent annually on the importation of tomato paste into the country, Sanusi reasoned that something needed to be done. This led to the setting up of the National Tomato Technical Working Group, NTTWG, and while addressing the inauguration of the group then, Sanusi, said there was a huge deficit in the supply of tomato required in the country, leading to a huge annual import bill on tomato paste to the tune of about N16 billion.

The report then noted that the development was due to high demand for tomato in the country, which unfortunately, the farmers could not meet as a result of poor storage methods. As at that time, “the demand for tomato was currently estimated at 2.3 million metric tons per annum, while the output was 1.8 million metric tons due to lack of good storage facilities and poor developed marketing channels, resulting in up to 50 per cent of the tomato produce being lost”.

However, with a desire to plug financial loop holes and also to create enabling environment for local production of some food items Nigeria perceived as having a competitive edge, the present government decided to withdraw foreign exchange on some items, and unfortunately triple concentrate falls within the category. Analysts however believe that though the policy was not totally bad in itself, but that an inclusive stakeholder input would have helped government better understand the adverse effect of the policy on local tomato manufactures. National Mirror investigation indicate that differences in climate, soil composition and species of tomato is against Nigerian manufacturers getting the required output of concentrate if manufactured locally, noting that Nigerian soil does not support high yielding tomato species.

Experts in tomato production also explained that it will cost more to process the concentrate locally than importing them, more so, when they are in competition with imported products. Speaking to National Mirror recently, the Managing Director of Sonia Foods Industries Limited, Mr. Nnamdi Nnodebe, said the new policy is a disincentive to local manufacturers of tomato pastes. Nnodebe, who claimed he had invested over N8 billion with over 224 direct workers and several indirect ones in his tomato paste factory at Asese, Ogun State, said the present situation in the economy demands that governments at all levels assist local manufacturers by ensuring they have easy access to forex and single-digit loans.

 Nnodebe, who also spoke on behalf of the Union of Tomato Paste Manufacturers in Nigeria in Lagos recently, appealed for more time to further invest in backward integration in the country. “As a group we are committed to the growth of the Nigerian economy and also wish to boost the GDP of the nation through the production and exportation of tomato paste. We will be pleased if the government can avail us more to time to allow for backward integration just like it applies to some other sectors of the country.

He said members of the tomato union have begun the process of backward integration in some parts of the country but support for the process is critical to its success, and pleaded with the government to provide adequate support in terms of easy access to arable land, low interest loans, irrigation facility, technical and also infrastructural support. “In the long run, we intend to establish a triple concentrate factory using locally harvested product, which would fill up the huge shortage of about 150,000 MT in the Nigeria tomato concentrate paste market,” He said in line with his own company’s expansion drive and commitment to value, they intend to vertically integrate backwards.

“We are in the process of building an ultra-modern factory and farms in Zamfara state that would have the capacity of producing the tomato concentrate. Our estimate is that the said production would commence and be completed within 36 months from February 2016”, Nnodebe said.

Also, another factory owner, Sanjeev Kapoor, also lamented that the new policy restricting the import of goods including tomato concentrate means running out of raw materials in few months. “I will have to shut the factory when my concentrate runs out and put 440 people out of a job,” says Mr Kapoor. Also, the local vendors who supply him with cartons, labels, salt and chemicals will also lose out. “For years now we have been begging the government to ban tomato pastes in retail packs. This will help the economy, because if I cannot compete with those imported products, I may not survive,” he also said.