‘How to promote food processing as mega-revenue earning industry’

By Femi Adekoya with agency report   |   22 January 2015   |   6:10 pm  

AMIDST concerns overby dwindling revenue profile of the country from unstable global oil prices, the stakeholders in the food processing industry, yesterday, expressed belief that the sector has the capacity to become Nigeria’s highest revenue earner if strategically supported and exploited.

    Already, the Federal Government, through the Minister of Industry, Trade and Investment has marked out 13 national strategic export products meant to replace the petroleum products, as a strategic move towards economic diversification.

  Indeed, the processing sector had identified poor access to technology and funds as major factors inhibiting the growth of agro-processing sector in the country.

   Hitherto, stakeholders in the cocoa, cassava and other agro-allied sector had raised concerns on the continuous loss of jobs and potential earnings arising from export of raw agricultural produce to developed countries.

   Precisely, Aganga listed the 13 National Strategic Export Products (NSEP) in three categories to include agroindustrial- palm oil, cocoa, cashew, sugar and rice); mining related- cement, iron ore/metals, auto parts/cars, aluminium and oil and gas, industrial products- petroleum products, fertilizer/urea, petrochemical and methanol.

   Chief Executive Officer, Spectra Foods Ltd, Chief Duro Kuteyi, said yesterday in Lagos that the food processing business could replace oil in Nigeria.

  Kuteyi, who is also the South-West Chairman of the Nigerian Association of Small Scale Industrialists (NASSI), said this in an interview with the News Agency of Nigeria (NAN).

   He urged the Federal Government to monitor the activities of the development banks and the research institutes, in order to appraise the extent of the government’s efforts in supporting local food processors.

   “Food processing in Nigeria is a viable business but there were too many challenges plaguing the sub-sector from lack of funds, market share, and also electricity supply.

   “With adequate government support, we believe that the number of food processors in the country would have been doubled by the end of this year.

   “The increase in the volume of the middle-class is causing the tastes and eating styles of Nigerians to change into a more convenient way of eating and they are also becoming more health-conscious.

   “When you go to the malls today, people prefer to pick pre-packaged or pre-cooked food items, due to their busy schedules, while some even opt for home delivery. There is a lot of wastage of farm produce due to lack of adequate storage facilities, and this costs the nation billions of naira. Processing can help to reduce the level of wastage, so I dare to say that food processing is the new oil.

   “The government should also endeavour to monitor the activities of the research institutes like the Federal Institute of Industrial Research, Oshodi (FIIRO), where there are countless research results on food and industrial items.

  

 “Also, for the development banks like the Bank of Industry, where so many intervention funds have been channelled to, the government should ensure proper monitoring of such funds, so that it can be accessed by the people who truly need them,” he said.

   Similarly, Edo State Commissioner ‎for Agriculture and Natural Resources, Abdul Oroh, in a chat with The Guardian, noted that the oil palm sector has the capability of replacing crude oil exportation in the country.

   “As we speak, a tonne of crude palm oil is $700 and the value of crude oil is about $46. We need to develop our agro-processing sector and this is an opportunity for us.

   “I see opportunities in all of these. You cannot have challenges without opportunities. If we do not have enough money to import rice and other commodities what do we do? We still have to produce something for our country and for ourselves. We need to do more for the industries, agro business, and agriculture as a whole. We need to develop a whole lot of focus to drive agriculture and industrialisation. We should also develop the market so that if we have anything to sell, we can get people to buy”, he added.

   Kuteyi also said that most of the packaged processed food items on Nigerian shelves are imported, which spells doom for the economy, should the trend of massive importation continue.

  He said that given all necessary support, local manufacturers and food processors would be able to meet up with the standards of food packaging as most of them were already certified by the regulatory bodies.

   Kuteyi said that millions of jobs could be created in the food processing value chain.

   NAN reports that the changes in the tastes of the average Nigerian have brought about an increase in the demand for processing and packaging products.

     On their part, the Bank of industry (BoI) and the Federal Institute of Industrial Research, Oshodi (FIIRO) recently expressed readiness to review strategies to deepen relationships that would aid the realization of their mandates.

   Indeed, the agencies noted that, despite the huge deposit of natural resources in the country, there is a need to develop homegrown solutions to address the gaps in the country’s industrialization drive.

    With research already conducted in key areas where the nation has competitive and comparative advantage, BoI and FIIRO have concluded plans to review intervention strategies that would drive agro-processing in line with their mandates.

    The move is expected to include interventions that would aid the country’s transformation from farming to developing small-scale enterprises, food processing and industrialised agro-industries.

    A German Engineering Association, VDMA, recently stated that Nigerian imports of food processing and packaging technology between 2010 and 2012, have increased from 198 million Euros to 275 million Euros, an increase of 39 per cent.

   In the same period, imports of agricultural machinery and equipment went up from 46 million Euros to 62 million Euros.

   According to the PCI Film, a consulting firm, the Nigeria’s packaging industry has been growing at the rate of 12 per cent annually in the last five years.

   The growth may be linked to the increasing demand for packaged food and cosmetic items.

 



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