Photo caption: A cross section of participants at the national stakeholders’ meeting organised by Cassava: Adding Value for Africa Project Phase II, in Abeokuta, Nigeria.
The Project
Coordinator, Cassava Transformation Project at the International Institute of
Tropical Agriculture (IITA), Dr Richardson Okechukwu has said that the domestic
demand for cassava in Nigeria is expected to hit 8.5 billion dollars by the
year 2020.
The expert in
cassava production who spoke during a national stakeholders’ meeting organised
by Cassava: Adding Value for Africa Project Phase II, in Abeokuta, Nigeria,
noted that there has been significant increase in import substitution and
export opportunities for a range of cassava end products such as flour,
pellets, starch, sweeteners and ethanol, adding that industrial use of cassava
is expected to grow by five times.
According to him, “There has been sizable import substitution and export opportunities
for a range of cassava end products like flour, pellets, starch, sweeteners,
ethanol, and snacks. More
investors are coming into Nigeria to establish large cassava processing
factories. More Chinese are coming into the industry and they are buying cassava
roots in larges scales, particularly in the middle belt areas of Nigeria where
there are few processors. So there is going to be increase in demand of cassava
roots. Domestic cassava demand is expected to reach $8.5bn by
2020 andIndustrial use of cassava expected to grow by
five times.”
In her
keynote address entitled ‘Profitability and Growth of Cassava Business in
Nigeria,’ a former Managing Director of UAC Foods Mrs Folusho Olaniyan, said
that Nigeria accounts for about 21 percent of the total global cassava
production, adding there is a need to open up the cassava industry in the
country for real dynamic growth.
According to
her, “Nigeria is the world’s largest producer of cassava at an estimated 54
million tonnes in 2013, accounting for 21 percent of the total global
production. To open up the cassava industry for real dynamic
growth, local and international companies need more awareness on financial
benefits of using cassava-based raw materials in snacks and biscuits
production, beverage, seasoning, and pharmaceutical industries.”
She pointed
out that Nigeria has suffered serious naira devaluation which has affected its
economy; however SMEs in the cassava starch value chain will not be affected
unfavourably, since the fall in naira has made imported starch uncompetitive.
“Based on the
assumption that the lowest selling starch house sells starch at N145, 000 per
tonne while, highest sells at approximately N169, 000 per tonne. Net profit for
lowest selling house is seven percent while net profit for higher selling
starch houses is capped at 15 percent. With the drop in the value of the naira,
a rare and reasonable opportunity has opened up for starch manufacturers to
increase their profit margins now that imported starch price may become
uncompetitive.”
Highlighting
the need to strengthen smallholder farmers’ participation in the cassava
industry, she said that smallholder farmer groups will have the opportunity to
attract investors if they operate transparent farming models that are
measurable.
“Investors
are required to restructure smallholder farmer groups to operate like
profitable business ventures that will have the ability to attract funding and
partners within and outside Nigeria.”
Rounding off
her address at the stakeholders’ meeting, Olaniyan, however recommended
thatfarmers and SMEs in the cassava value chains should look inwards and
discover cost saving measures, and alternative selling channels which will
lower their cost production and improve profitability.
In his
remarks, a representative from MATNA Foods, Olumida Adaralewa said that raw
material, power, seasonal fluctuation, and pricing have been a major challenge
to cassava processors. He decried the unchanged importation of flour which has
continued to stifle local production. He however pointed that mechanisation is
key to boosting cassava production, hence the need to put structures in place
to achieve that.
Similarly,
the Managing Director of Oamasal Nigeria Limited, Mr Femi Salami pointed out
that there is a need to sustain the cassava policy stipulated by the Federal
Government’s Cassava Transformation Agenda. He however pleaded that funds
should be made accessible to farmers and processors.
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