‘CBN’s forex restriction has increased our production capacity from 5 to 25%’

Eric Umeofia is chief executive officer of Erisco Foods Limited. Umeofia tells JOSEPHINE OKOJIE, in this interview, that the foreign exchange restriction policy of the Central Bank of Nigeria (CBN) has raised his firm’s production capacity from five to 25 percent. He regrets that Africa’s largest economy has no tomato processing plant, but adds that the company is now taking a bold step by commencing the process of building a processing plant in the country.

Can you tell us about Erisco Foods Limited?

Erisco Foods Limited is an indigenous agro-processing organisation with offices in the United Arab Emirates and Angola. The goal of the company is to feed the nation.

Why are there no tomatoes processing plant in the country?

It is very expensive to build a tomato processing plant. We need the support of the government so that we can build tomato processing plants. That is what is being done in China.  If China and India can feed themselves, then Nigeria should also be able to feed itself.  Nigeria needs a minimum of ten tomato processing plants to absorb what is in Nigeria. China has 100 tomato processing plants.  We also need improved farming. The federal government is more supportive now than before. All the concentrates used in the production of tomato pastes in the country are being imported. Tomato paste is the extraction of the water out of fresh tomato produce through the process of heating to have concentrates which can be preserved for another two years. Nigeria currently has no tomato processing plant in the country.  China, where most of the concentrates we use in Nigeria are being imported from, has only one farming season, while Nigeria has two farming seasons. Yet, there is no single tomato processing plant in the country. Some individuals have been holding the country to ransom because of their own personal interests. It is cheaper to import tomato paste into the country than process it in Nigeria.  Most of the tomato pastes imported into the country cannot be allowed for consumption in those countries because they are of low quality. Nigerians should stop aiding foreigners to defraud our people and the nation at large. The government before now did not do anything to stop them.  Now the new government is putting policies in place that will help local tomato industries and smallholders farmers.  Erisco Foods is now building a processing plant in Jigawa and Sokoto.

What is your position on the CBN forex restriction policy on manufacturers of tomato pastes in the country?  

I am totally in support of the CBN forex restriction policy. Any indigenous company that is not in support of CBN forex policy does not want the progress of the country. The cabals in the tomato sector are still doing everything possible to ensure that they frustrate the policy of the CBN, because they are after their own personal gains and not that of the country. Most of the companies have abandoned the backward integration policy of the government so that they can still be importing tomato pastes into the country. Though the CBN policy is tough on companies importing tomato concentrates now, but in the long run, everything will be for the benefit of the entire country.  It will force the manufacturers of tomato pastes in the country to adopt the backward integration policy and embark on large-scale tomato farming. Raw materials imported from overseas have 85 percent of the jobs in the countries where they are being imported from, with only 15 percent coming into the country through processing of the raw materials. But with backward integration, 100 percent of the jobs would be created in the country. We need to sacrifice now for the benefit of tomorrow. I believe the new government is going in the right direction. Before now the government was just talking without any practical action. The CBN forex restriction policy has increased our production capacity from five percent to 25 percent.

How can the government address the problems in the tomato value chain?

About 70 percent of tomatoes are wasted due to poor storage system and bad road networks. Our smallholder tomato farmers are not being supported. They farm their produce but most get spoilt on the farmlands because there are no off-takers. The government needs to support the agro processing firms and put in place policies to protect these firms. We need to improve our market materials for the transportation of tomatoes. We need plastic crates with which to transport tomatoes from North to South because plastic crates absorb the pressures on the roads and reduce the percentage of spoilage than the raffia basket.

The government is talking about diversification. How can agriculture play a leading role in this process?

The country needs to diversify through agriculture, which must be taken very seriously by the government. For any country to grow, the government must give the manufacturing sector serious attention and put in place right policies so that the sector can grow.  Without action, Nigeria will not achieve anything. The CBN is putting the right policy in place now by protecting local firms. We need to promote made-in-Nigeria goods. Nigeria should be the one exporting tomato pastes, crude palm oil and vegetable oil to other countries because of its abundant resources and not the other way round. We also need technology and modern machineries to diversify our agricultural sector because without improved machineries Nigeria cannot diversify its agriculture. Every individual also has a role to play, not only the government. Nigerians have to start patronising locally made goods and not foreign goods.            

How is Erico Foods supporting the federal government backward integration policy?

Erisco right now is working with Jigawa and Sokoto state governments. Farmers in Nigeria are currently farming five to seven metric tonnes per hectare, but Erisco is planning to start farming 27 metric tonnes per hectare. Erico Foods has large farmlands for tomatoes. However, our intention is not to own the farm but to provide every tool needed by farmers– from seedlings to modern farm equipment. In order to create jobs, we group farmers into clusters to farm and later we buy all the produce from them. It is only in Nigeria that farmers are poor. In other countries of the world, farmers are very rich. All Erisco needs now is the support of the government. We have about $250 million plans going on right now in the northern Nigeria.