Will Nigeria Become Self-Sufficient in Wheat Production? Exclusive Interview with Flour Mills of Nigeria GMD

Interview with Paul M. Gbededo, Vice Chairman of Flour Mills of Nigeria Plc.

What are the challenges of Nigerian agriculture? What needs to be done and what would you like enterprises to look at and to focus on?

You have to look at agriculture in the context of Nigeria. Agriculture only thrives if the foundation is properly laid. What do I mean? First of all you have to think of the strategies and the policies of government as it relates to agriculture. Are these policies long-term or short term policies? Are they inclusive policies? Are they enforceable policies? Will these policies prove to be consistent over time? I think that is very critical to agriculture especially in Nigeria. You also need to look at the infrastructure that is supporting agriculture. You can recall, with nostalgia, that in the 30’s, 40’s, 50’s and the 60’s that Nigeria grew in agriculture. We used to have the pyramids of ground nuts in the north. We used to know the kuka and palm oil business back then and we were the leading producers of kuka in Nigeria as well as the leading producers of palm oil. What was responsible for such growth and such a position of strength for Nigeria in the world could only be because a proper foundation was laid and there was proper infrastructure, rail infrastructure, road infrastructure, and irrigation infrastructure. It is very import that you have infrastructure to support agriculture. It is only then that agriculture can thrive. If you depend mainly on rail-fed agriculture your results will be limited. Today we have irrigation supporting agriculture and we have the rail supporting agriculture as well as the roads supporting agriculture and we are still producing but the post-harvest losses are very high in the country probably because we do not have roads that lead to the farms to transport the produce and so on. The second thing is the yield in agriculture. Today the yield in agriculture is very poor because we do not have the correct seeds in the country. We do not have the proper culture for fertilizer in the country. We do not have the correct timing for planting and harvesting. These are the things that are very important if agriculture is to be successful. The third thing is funding for agriculture. There is no way to use commercial credit funding for agriculture. If you use commercial credit funding you will find yourself out of agriculture very quickly with big losses. Government needs to find a way of supporting agriculture with proper funding that will help the out growers and even the investors that come into agriculture. Fourth we have the human capital development. Who are the agro-engineers? Who are the agricultural economists? Where are the extension workers? We need to build that capacity for human development so that we don’t just have agriculture but we also have agro-processing with people supporting these areas. We need to continue to add value in agriculture. For so many years Nigeria has depended on just exporting agro-produce. Nigeria should continue to think about how to add value and create wealth in agriculture. I think those are the key elements and we have taken that on board. The fact is that, as a company, we look at the policies of government and work with them to craft the proper policies. One good example of that is the policy on sugar. We have the national sugar master plan. It was a policy that was very inclusive. Those who are in the sugar business were engaged by the Nigerian sugar development council and the minister of trade and investment. They engaged with those who are in the sector and we came up with a master plan. The master plan strategy is to ensure that Nigeria becomes at least 70% self-sufficient till the year 2020. That is working provided that government sticks to the rules and continue to make sure that the policies are implemented and enforceable because if you have a policy and people are flouting the policy it becomes an issue. It encourages the others in the same space. Once it is enforceable I think it will be the key to ensure that it becomes a success. That is why we are investing in the sugar sector. We are also investing in other value chains. We look at the crops that are relevant to Nigeria and the crops that without Nigeria have a comparative advantage. For instance, we are big investors in the cassava value chain. Nigeria produces a lot of cassava. Approximately 30 to 40 million metric tons of cassava per annum but we eat it up. Since it is a crop we in Nigeria have an advantage. We feel that investing in that space is very important. Not just investing in the cultivation of cassava but also the processing of cassava and adding value and using the produce from there as our supply chain in the country. We also invest in palms. We have about 5,000 hectares of palm real estate and we just acquired another 20,000 hectares to be developed. We don’t just produce palm fruits and extract crude palm oil from the fruits. We also have a vegetable oil refinery where we convert the crude palm oil into vegetable oil that is used in kitchens. That is very important to us. We look at the entire value chain. We also deal with corn. We have one of the biggest corn farms in the country. We have a farm in Kaboji. It is approximately 10,000 hectares and we produce at least 4,000 hectares of corn annually. We use the corn from there for animal feed. We have the biggest animal feed mills in the country and we provide raw material to poultry industries and aqua feed for the fish industries. You can see that we are fully involved in the agro-ally space. The strategy is to ensure that we protect our supply chain to support our food business and continue to concentrate on ensuring food security for Nigeria and creating wealth and value for the country.

As wheat millers we want to support the farmers by supplying them with the correct type of seed. We want to support the farmers by providing them with agronomic technology.

We know that your main area is wheat milling. Could you tell us about the technology you use and how this protects the environment? What are you using to ensure efficiency of production?

For over 50 years we have been in the wheat milling business and in that time we have imported wheat from various countries to produce the raw material for various industries. For instance, the flour that we produce from wheat we supply to the bakery industry. We also supply flour to the biscuit industry. We supply flour to the pasta and noodle industries and we supply flour to the confectionary industry which is very important. The value chain of wheat is huge in this country. The last statistics show that Nigeria is importing over 4 million metric tons of wheat annually. But you know it’s not sustainable the way we are today because you have to depend on foreign exchange to bring wheat to Nigeria. So the question that the government is asking is why we can’t produce wheat in the country. Is it that our weather cannot sustain wheat production? So research industries have been trying to see what they can do to have a wheat seed variety that will be able to grow in Nigeria. They have come up with at least two varieties, the Atila variety and then the Norman variety that have been proved to be able to grow in Nigeria. That is what we are supporting and happily the president launched wheat production November 2015 and we are very supportive of it. As wheat millers we want to support the farmers by supplying them with the correct type of seed. We want to support the farmers by providing them with agronomic technology. We want to support the farmers by ensuring that we sign off-tick agreements with the out growers and ensure that whatever is produced in Nigeria; we mop it up and use it in our wheat milling. It will take time. It won’t be one or two years. But over time as we continue to put effort into wheat cultivation we will definitely see that Nigeria will get to the point where it can boast that it is at least 10%, 20%, 50% if not 100% self-sufficient in wheat production. That is my dream and as a company we will do everything possible to continue to support that value chain to ensure that we have import substitution and we are less dependent on foreign exchange.

Would you like to talk about your commitment to Nigeria and its society?

We support our host communities wherever we operate because FMN Plc. is such a large group. We don’t just operate in Lagos state. We are in Oyo state, we are in Edo state, we are in Kano state and we are in Kaduna state. So we are spread all over. Our investments are all over the country therefore we make sure that we give something back to all our host communities, especially in Niga state. Here in Lagos state, especially where we are in Apapa we work very closely with the Lagos state government and the Apapa local government and the Surulere local government to ensure that our presence is felt and that our partnerships are a win-win. For instance; we support education and it is very close to our hearts. We want people to be educated. We support education all the way from primary school through to high school and ensure that the students are in a good environment to be able to assimilate their education properly. We also give back in terms of healthcare. We are known in Apapa for always organizing health checks and especially eye tests. We do free eye tests and that has proven to be very useful in ensuring that we are a good corporate citizen. We even care for the roads. We ensure that we contribute to the rehabilitation of all the roads that lead from our factories outside of Apapa and ensure that they are safe to drive on. In our other host communities we support them with water. We sink boreholes and ensure that people have access to good water and we also ensure that we have a good community relationship with them. We make sure that we create jobs for the people and we make sure that we support their wellbeing and lift their economy. We want a win-win partnership with our host communities.

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