Amidst outages, Aba-based firm leverages gas to keep the lights on

In Aba, South Eastern Nigeria’s commercial capital, industries face daunting challenges, including raw material shortages, an underdeveloped road network, and inadequate power supply. But food processing firm, Von Food and Farms Ltd, is leveraging gas to keep its factories running.

Kingsley Orji, managing director of Von Food and Farms Ltd located in Osisioma, Aba processes cassava tubers into cassava starch flour for both industrial and food grades. Industrial grades are used by packaging industries and the food grades are those that apply directly to food production.

Orji, who said he also runs Von Bridgeland Nigeria Ltd into corrugated roofing sheets, told BusinessDay that power was primary requirement for his companies and hundred others in Aba. They all relied on diesel until prices started to climb and generation from the grid continued to falter. Gas began to look attractive.

“We were running on diesel but that became very expensive as diesel prices rose and power supply became more unstable,” said Orji. “Amidst the challenges of sourcing raw materials and undeveloped state of the road network, we decided to generate our own power.”

The challenges with operating a food processing plant in Aba according to Orji are enormous. For several months last year, the farmer-header crisis escalated, which resulted shrinking the volume of cassava supplied, a major raw material in the production process.

“We couldn’t even process up to 30 tonnes of cassava in a month on average because of non-accessibility to raw materials. Most of the farmers were not able to access their farms due to farmer-herder crisis,” he said.

Von Food and Farms Ltd cassava processing plant has an installed capacity of 50 tonnes output every eight hours but could produce between 120 – 150 tonnes of processed cassava every month on average due to operating challenges. But in 2020, things got so bad, that its output in five months, was what it normally did in one month.

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Against this backdrop, Orji said when he learned of the possibility of utilising gas as alternative fuel to cut down the cost of running his operations, it was cheering news.

In the third year of operating the 1.7MW gas plant delivered by Clarke Energy, the entrepreneur said the company saw significant cost savings, “more than half of what we spend on diesel have been saved and best of all it is cleaner and has even cut our maintenance cost,” he said.

Clarke Energy delivered the end to end power plant solution including its designs, technical drawings, engines, commissioning, and currently provides maintenance of the equipment. The company gets natural gas supply from the NNPC pipelines that pass through the area.

Yiannis Tsantilas, the managing director of Clarke Energy in Nigeria, said, “The 1.7 megawatts power plant solution commissioned in 2018 represented Clarke Energy’s first and foremost achievement in the South East of Nigeria and was not possible without the robust relationship between both organisations. The Von team, led by a man of foresight and impeccable integrity, identified the need to develop the cassava value chain, including processing into semi-finished and finished products that are affordable and export-ready. As well as creating wealth for farmers and improving the regional economy”.

“Most of the industries in Aba are seeking to apply local content, “that is why we went into food processing. At the micro-level, our operation helps the subsistence farmers to earn revenue through bulk purchases of their produce,” Orji said.

In the past, cassava production saw a revolution where many people benefited from cultivating cassava through government-funded programmes. Orji said such initiatives need to return to help local firms.

“Furthermore, businesses in Aba are also faced with the challenge of multiple taxations levied by the state, and local governments apart from the statutory taxes, company income tax, education tax, and VAT already established. This is one area the government can look into to support industries,” he said.