• Sunday, July 14, 2024
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BusinessDay

Moving for 100% local content in manufactured foods

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DUFIL Prima Foods Plc, a major player in the Nigeria culinary landscape, has embarked on strategic backward integration to ensure 100percent local content in most of the products being produced by the company. This has led to investments worth billions of naira in the Nigerian economy in the last 10 years. These include the establishment of a seasoning plant, flourmills, palm oil refinery and the establishment of a oil palm tree plantation under the Edo State Government Agribusiness Revolution Scheme.

In its effort to boost the local production of palm oil, DUFIL has acquired and signed a memorandum of understanding with the Edo State government for 60,000hectares of land for cultivation of palm trees which will help in boosting the local production for palm oil, thereby increasing the supply of palm oil within the country. DUFIL is at the fulcrum of revolutionary transformation of the palm oil industry in Nigeria.

A quick look at the palm oil sector in Nigeria reveals that palm oil is the main vegetable oil produced in Nigeria and Nigeria was then the world’s leading producer and exporter of palm oil in the 60’s. However, Nigeria has lost its dominant position in the international trade since the 1980s and is currently the fifth largest producer, far behind Indonesia and Malaysia (51percent and 34percent of the world production in 2013/14) (USDA, 2014). Its output indeed represented only 1.57percent of the world production in 2013/14 (USDA, 2014). As regards to palm oil production in Africa, however, Nigeria’s production is estimated at 55percent of the African output making it the largest producer of palm oil in Africa.

While Malaysia and Indonesia productions have drastically increased over the 1990-2010 period, it has barely been the case for Nigeria, mainly because of its reliance on traditional production methods coupled with major infrastructural challenges being faced in the country, out-dated technology and out-dated production knowledge.

The food grade industrial output of palm oil does not match local consumption. Indeed, the national demand for palm oil has grown faster than the domestic supply. Production deficit as at 2014 is well over 900,000 tonnes per annum. Consequently, Nigeria imports palm oil to satisfy the local demand. However, Nigeria has a potential to increase its production through the application of improved processing methods, creation of incentives for manufacturers in the food industry sector to embark on backward integration by investing in palm plantation and thereby producing their demand of palm oil locally, while also exporting to other countries.

Due to the constant shortage of palm oil for both domestic consumption and industrial usage, major companies like DUFIL and PZ Wilmar are investing heavily in the cultivation of palm tree plantations that will revolutionise the palm oil industry in Nigeria. A combination of these and the efforts being made by Dufil will help Federal Government transformation agenda to achieve its 300,000 hectares for Agribusiness in Palm oil sector

Over the last 50 years Nigerians have witnessed the dismal development of the palm oil industry. These grave concerns of snail-paced development has aggressively made DUFIL to propel its strategic initiatives to enter into the vegetable oil segment with the objective to provide healthy and best quality palm oil and make it available at every retail point in Nigeria which will eventually benefit the economy and bring relief to millions of Nigerians who deserve the best quality of palm oil at affordable prices.

DUFIL’s initiative has provided thousands of Nigerians employment, moving the vegetable oil towards forces determining free markets which is a symbol of globalisation, revolutionise the Nigerian economy, rationalise food markets and strengthen the Naira against foreign exchanges thereby providing enormous economic benefits to millions of Nigerians.

The primary objective of DUFIL’s entering into the vegetable oil market is to reduce the supply shortage in the country with world-class quality at affordable prices for millions of Nigerians to benefit. DUFIL has invested billions of Naira with a world-class facility and committed itself to the development of the palm oil industry and lifts the base of the pyramid by directly aiding the lifestyle improvement of Nigerians.

Efficiencies achieved by Dufil have been directly passed on to the ultimate consumer, which is evident in the consumer markets for vegetable oil in every part of Nigeria. DUFIL’s entry into the vegetable oil market has radically created a reduction in consumer prices by more than 10percent over the last 12 months coupled with unmatched quality with international standards thereby providing direct benefit to millions of Nigerians. This reduction in price has come at a time when Nigerians are reeling with high inflationary pressure with a devaluing Naira.

No one has ever thought that processed healthy vegetable oil would be sold in sachets to meet the common man’s purchasing power, but that is happening right now. Healthy oil is no longer an exclusive reserve for the rich due to DUFIL’s efforts in establishing a free market for vegetable oil.

Dufil’s vision is to make Nigeria as hub of West Africa for supply of palm oil. It’s entry in the palm oil sector has no doubt revolutionised the sector and reduced hoarding and price control by few players who intends to monopolise the sector at the detriments of Nigerians and the economy. In a couple of years when the plantations become fully matured, local production and availability will improve tremendously.

It is important to appreciate NEPZA and the vision of Ministry of Trade and Investment to provide good incentives for industrialisation of the country. The government believes in encouraging those industries, which are committing great resources into the expansion of non-oil sector of the economy by way of policies and infrastructural supports, particularly with the current government drive for revenue in the non-oil sector. Federal government should promote consistent policies that will encourage more players to go into the agribusiness sector. Major constraints are the availability of land and other farm inputs. These are areas where governments, both at the federal and state levels can assist prospective investors.

SAMUEL ADETOLA