Q. Do you consider agriculture as the backbone of Nigeria?
Yes I totally believe this because Nigeria has over 60 million farmers, a lot of arable land and yet we had ended up importing to cover all of our food needs. A few years ago Nigeria was a market leader in the world. We are trying to reverse the situation, if you can’t feed yourself then there’s a big problem. We have the land, we have the water resources, we have the climate, we have the farmers and we have the market. So nothing stops us from changing from a net importer of food to a major producer of foods such as rice, maize and sorghum. I strongly believe that Nigeria has the potential not only to feed itself but also to export food to other countries as well, especially Africa. That is why we in BUA group have the vision to see how we can tap into that potential and work with government to achieve it and produce food. That is why we take backward integration very very seriously,
Q. Is this why you sold other parts of your business?
Absolutely. Nigeria imports almost 95% of it’s sugar needs from countries such as Brazil, but we have the ability to produce sugar cane and process it locally. We have four refineries. I do not think Nigeria has the competitive advantage to produce wheat so that will probably continue to be imported. Nigeria is the largest importer of wheat from the USA. But in sugar we believe we have the advantage. In Lafiagi where we have 15 thousand hectares of plantation we are investing about 300 million dollars to develop the entire production cycle including electricity. We will be able to produce about 140,000 metric tonnes of sugar from the Lafiagi plantation. We will produce about 25 million liters of ethanol, around 5MW of electricity. The Pasanga plantation is the single largest sugar plantation in Nigeria, about 50 thousand hectares. Of course such investments lead to employment opportunities, tens of thousands of people directly or indirectly benefit from these. What we are trying to do is to seriously grow the sugar cane sector to achieve a more balanced market situation.
Q. How difficult is it to manage such a large company in the current socioeconomic situation of Nigeria?
Honestly, it is not easy. Abdul Samad is one of the strongest industrialists, he brings a lot of energy to everything. There is a shared belief in Nigeria, that there is huge potential in the country. He has the tenacity to be able to get things done. He has grown BUA from a small trading concern in 1988 to a major corporate conglomerate in the country. It has not been easy but we all share this vision and tenacity now.
Q. What about the partnership for rice?
This partnership we had already been confirmed and the pilot is in the first week of March (2017). Just to give you a bit of background. Nigeria consumes about 7 million tonnes of rice per annum and we are producing about 2 million tonnes. A typical farmer in Nigeria produces 2 tonnes per hectare and only during the rainy season. Single harvest per annum. What we are doing is to organize them. We give them improved seeds, fertilizers and chemicals and everything so they can increase their yields to 4-5 tonnes per hectare. We are also trying to get them to at least double harvest, both in the rainy and the dry season, with improved irrigation facilities. This will get them up to 8 or even 10 tonnes per hectare per annum. For example in Thailand they harvest rice three times a year and in some cases they are doing even 7 tonnes per hectare. So in total they are producing 20 tonnes per annum and in Nigeria we are still only doing two! We have the potential to improve production tenfold. Where we signed in Kano we have over 500,000 rice farmers. We are putting them in cooperatives with 20 farmers in each, with a chairman and a secretary and give them all the input. Whatever they produce we are ready to buy at the market price. BUA has the largest rice milling plant in Nigeria. We have 200,000 tonnes capacity and it is being upgraded, we are going to put yet another one soon. We are doing pilot projects in many states and hope to produce 1 million tonnes strictly for BUA as we have enough processing capacity to handle it. We are very excited about it. Nigeria spends 2 billion dollars a year on importing rice, we believe it has no business importing rice.
Q. What is next for Nigeria? What is the most important thing for the government to do?
We need to first and foremost changes perceptions. Nigerians typically assume that diversification only comes from the government but I don’t believe it is so. I think that in order to diversify the economy everyone has a role to play, especially the private sector. A lot of companies and a lot of my friends think Nigeria is in recession but in fact it is facing a paradigm shift; from an import dependant economy to local production. A lot of companies are dependant on imported raw materials. The smart companies are looking for ways to source their raw materials locally. I have seen one flour mill for example which is no using corn. I believe that is the way to go as a country. It is a collective effort. Yes, of course, government policy is very important but I believe the private sector has an even bigger role to play as far as economic diversification is concerned. That is why as a company our strategy is focused on local production, that is why we are investing heavily in sugar cane production, rice processing and the organization of farmers. That is why we are focusing on local mining and coal mining, to be able to move away from imported petroleum products, to source our energy locally. That is also why we are investing in things such as fertilizers. To be able to create that eco system where we will be able to produce everything from start to finish locally. And that is the way Nigeria will be able to fight its way out of recession. I believe spending your way out of recession is not the answer. We need to look inwards to find solutions either in agriculture or mining or whatever we need to do to produce locally and feed ourselves as a nation.