17 July 2017

Nigeria: Dangote to Replicate Cement Revolution in Rice, Sugar Production

Photo: The Guardian
Dangote flour.

Lagos — The President of Dangote Group of Companies, Alhaji Aliko Dangote, has revealed that the focal point of the company is to replicate the revolution it brought about in cement production into agriculture particularly rice and sugar.

Dangote, who stated this in Jalingo recently when he paid a courtesy call on the governor, said his company is keen about revolutionising rice and sugar processing in the country the same way it achieved 45 million tonnes of cement within 10 years and hoping to hit 80 million tonnes in the next two years.

Dangote has already bought a total of 150,000 hectares in Edo, Jigawa, Kebbi, Kwara, and Niger states, all within Nigeria for commercial production of rice to support the country's Agricultural Transformation Agenda (ATA) launched in 2011. Through the transformation agenda, Nigeria hopes to attain food sufficiency and become a net exporter of rice within the next four years.

Years ago, Nigeria was among the top rice producers until an aversion for home-grown rice sets in. This has turned Nigeria to the second largest importer of rice in the world, buying at least five million metric tons per year from exporting countries like China and Thailand. Yet, Nigeria's fertile land and rich agro-climatic conditions could easily produce rice to feed the entire country and generate surplus for the region

Rice remains an integral part of the average Nigerian's diet. As such, there is no surprise that the country import is heavy on this food crop. The Federal Government's estimates show demand at 6.3 million metric tons per year (mmt/y) while domestic supply is estimated at 2.3 mmt.

Dangote's investment on rice farming has the capacity to create at least 8,000 new jobs and significantly reduce the price of locally produced rice.

Maintaining that he was in the state to show his company's seriousness in terms of agriculture, he equally added that he came to Taraba to ensure the Lau Sugar project becomes a reality.

"Our coming to Taraba is to show our seriousness as a company in terms of agriculture and to ensure that the Lau sugar project becomes a reality. We intend to do what we did in cement when we started from zero to 45 million tonnes within ten years and to 80 million in the next two years. That is the trajectory we are looking"

He revealed that his company would take delivery of 10 rice processing machines each of which has the capacity to process 16 tonnes of rice per hour thereby totalling one million tonnes.

Dangote, who presented the sum of N50 million to the governor as donation to the victims of the Mambilla crisis, further stated that his commitment is to create jobs saying he's looking forward to creating hundreds of thousands of jobs through agriculture stressing that agriculture holds the key to job creation.

"Agriculture is key to job creation. In cement, a billion dollars investment cannot create more than 15,000 jobs but such investment in agriculture would create hundreds of thousands of job,"

He, however, assured the people of the state that he's not investing in the state to just enrich his pocket but also to empower the people of the community through its corporate social responsibility as well as create wealth among the people of the state.

Taraba State Governor, Darius Ishaku, expressed optimism that the state has the potential to produce the local requirement for rice and sugar as well as for exports.

Ishaku eulogised Dangote for always living by every word he speaks and assured him that he is determined to do everything possible to ensure the success of his project in the state just as he promised to personally supervise the project.

To express his administration's commitment to ensuring the success of the project, he presented the site plan of the project to Dangote, just as he promised that he would provide the necessary infrastructure to fast track the project including the completion of Kona-Lau road which he promised to complete before the middle of next year.

He equally noted that he is determined to turn the state around from a civil service state to an industrial hub, saying the state would soon commence the export of tea and coffee, including Beniseed and soya beans.

Also, in an interview, the executive director of Dangote's industries, Edwin Devakumar said that the conglomerate plans to increase its production of sugar to 1.5 million metric tons a year by 2020 from 100,000 tons now and is seeking to add one million tons of rice, saying the company also plans to have 50,000 cattle producing 500 million liters of milk a year by 2019.

Dangote, whose cement unit is Nigeria's biggest listed company, has been investing in agriculture as the country's government seeks to diversify away from oil, which accounts for 90 percent of the nation's export earnings and the bulk of revenue. The economy, which plunged into its first recession in a quarter-century last year amid falling crude prices, is forecast by the World Bank to expand by 1.2 percent this year.

Devakumar said that the company established Dangote Rice Limited and will list the unit on the Nigerian Stock Exchange (NSE) at the appropriate time.

He added that Dangote plans to cultivate 350,000 hectares or 864,850 acres of land for sugar cane and add 200,000 hectares for rice.

Devakumar said the company will finance the projects through internal resources or equity funding and loans from banks and export-credit agencies, saying "The funds will be used mainly to procure farm-development equipment as well as sugar and rice mills."

According to him, Dangote is at the planning stage to invest in other agricultural projects including production of soybean, oil palm, palm kernel and corn, according to the executive director. It will support rice cultivation by supplying high-yield seeds, pesticides and fertilisers to contract farmers.

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