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Product cover image for Should Dangote Farming Exit the Tomato Paste Market?

Should Dangote Farming Exit the Tomato Paste Market?

Veena Keshav Pailwar

Product #:W33570
Supplier:Ivey
Discipline:Economics & Public Policy, General Management
Setting:Nigeria, 2021
Details:Case (PDF) • 6 pages • 2024-01-17

Subjects:

Economics

Industries:

Fabrication and manufacturing

Geography:

AfricaNigeria
Your Price:$9.71

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In July 2021, a major supply-side crisis in Nigeria forced the Dangote Tomato Processing Co. Limited plant of Dangote Farming to operate at just 20 per cent of its production capacity. Since its inception in 2016, the plant was shut down several times due to a shortage of fresh tomatoes of the required quality. Although the Nigerian government supported Dangote Farming by pursuing pro-tomato and pro-tomato-paste policies, it was unable to operate its processing plant at full capacity, reduce per-unit cost, and improve profitability. Due to various constraints, several tomato processing plants had exited the Nigerian market in the past several years. In view of persistent supply-side problems and tough competition from low-priced Chinese tomato paste, Dangote Farming needed to decide about the continuity of its tomato processing plant in the Nigerian market. If it decided to remain in the market, then it needed to devise strategies that could make the plant competitive and profitable.

Learning Objectives

This case is suitable for students of postgraduate management programs which include courses such as business environment and strategy with topics such as the international trade environment and survival strategies. After reviewing the case and participating in the class discussion, students will be able to do the following:

  • Comprehend the microeconomic environment of a company.
  • Understand a company’s policy environment.
  • Understand arguments for and against protectionist trade policies.
  • Generate strategies to improve productivity and profitability in a highly competitive environment.
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Case Study: Should Dangote Farming Exit the Tomato Paste Market? (English version) | Ivey Publishing