Buhler has operated in Nigeria for over 50 years. As at 2015, the number of rice mills installed by the company was in the ‘single digits’, according to MANUEL MURRENHOFF, the company’s managing director.
In the last seven years, that number has grown more than five folds. In this interview with CALEB OJEWALE, he speaks about Nigeria’s agriculture potential and how it can spur industrial growth, solve the foreign exchange challenge, strengthen trade balance and importantly, boost food security.
He also speaks about the growing interest in certain local grains (as substitutes for wheat), local processing, value addition and export potentials that businesses can benefit from. Excerpts:
Your company, Buhler, has been in Nigeria for over 50 years, what has that experience been?
Buhler started not only in Nigeria, but traditionally, as a casting company. We were casting the rolls and later the roller stands for milling equipment. We later diversified globally into other businesses and we followed a similar path in Nigeria.
We started predominately with milling and other businesses that required further value-addition to flour, then later ventured into rice milling.
Later into consumer foods such as wafer and biscuit manufacturing, pasta, instant noodles which we know here most famously as Indomie, then breakfast cereals and other food items along the grain and food value chain.
In recent years, say 5-20years, there’s been a lot of talk about agriculture in Nigeria. What has changed for the company compared to the overall 50 years of being in the country?
Allow me to provide some context, and then I will directly answer your question. Nigeria has everything a country needs to be an effective agricultural nation.
Nigeria has the most arable land – between 40 to 50 percent of the whole Nigerian land mass is arable – in the whole of Africa. So Nigeria as a country is green.
This potential has been used in the past, but we lost track of it. In the 1960s Nigeria had developed itself into the second largest producer of cocoa and largest producer of palm oil.
One challenge that we have with cocoa is the same challenge we have with oil. We export in its raw form, and often not even cleaned properly
We all know what happened in the 70s and the 80s and all the subsequent years when Nigeria discovered a very lucrative source of funds called the black gold, which is crude oil.
With that, the attractiveness, comparatively of agriculture and agriculture processing went down.
So a lot of funds were actually pulled out of agriculture and out of Agro-processing and were flowing into the oil and gas industry up till now, but this is changing.
We saw this downturn of agricultural productivity and investments, from the 60s till five to ten years ago.
We see now as you mentioned correctly, right from the political environment, the shift is now going towards reawakening this agricultural power that Nigeria has; the Phoenix out of the ashes movement, and we see this most effectively in the rice industry.
With the ban on importation of rice, what the government did is to support local production of rice – farming and processing – and defending the local rice industry against cheaper rice being imported. With rice mills coming up across all of Nigeria, we are seeing a positive impact.
Food security is about infrastructure for grain storage, and right now in Nigeria, we do not have sufficient grain storage facilities
Also, I would love to see this positive impact transferred to other local grains such as Maize, Sorghum, Millets, Soya, Ground nuts. For example, maize and sorghum production is not industrialised, so all the processing there is on subsistent levels happening in the rural areas.
I believe there’s much more potential to improve the productivity of these commodities to help Nigeria’s growing population.
What are your thoughts on how we can leverage technology to ramp up productivity and make food not only more available but also cheaper?
Food security means having the right food at the right time, affordable, and safe. Right now, Nigeria is too dependent on imports; all the pasta, noodles, and bread we eat are made from wheat that is imported. We have very little locally grown wheat at this moment.
When you look at the foreign exchange consumption, after petrol, Wheat is the second biggest forex consumer and this has negative impact on the trade balance, value of the naira, and cost of food.
To address this, I believe we need a holistic approach. We can look at other countries in Africa that have similar circumstances where we can learn from. One part of this is policymaking which is where the Nigerian government has to step in, and the other is about infrastructure.
Food security is about infrastructure for grain storage, and right now in Nigeria, we do not have sufficient grain storage facilities. In some other countries, they have a lot of grain aggregation centres to dry, clean and safely store grain for a very long time, even up to a year. And of course, with that, you won’t have food insecurity and you can feed this grain into the processing Industries during the seasons and not only after the harvest season.
This is an area where public-private partnerships are needed and I believe that Nigeria, together with the African Development Bank (AfDB) is already doing something in this regard through the Special Agro-Industrial Processing Zones (SAPZ).
Buhler is a strategic technology partner for this initiative where the government helps to build the infrastructure for the SAPZs, and then it attracts investors to invest further into downstream processing, along the agro-value chain within these zones. Seven of these are being planned across Nigeria already.
Focusing on rice which your company has been involved in, how much radical growth has happened in that sector in terms of equipment demand since 2015 when Nigeria made local rice production a thing?
A lot has happened. I think it’s a positive example that Nigeria can and should be proud of. This is an example where many other local commodities should also follow. We as a company and as a technology provider have seen and are still seeing a lot of demand for rice milling and processing equipment; from Silo storage, cleaning, drying, as well parboiling and then the rice milling and bagging.
However, holistically, Nigeria has to make sure that on the production side we keep up the investments. All the rice mills cannot operate if we don’t have Paddy, which is the raw material to feed them. So we have to keep this balance through investments into the processing as well as into the paddy production itself.
As a company, how many rice mills have you installed since 2015 and what was the number before then?
Before 2015, it must have been in the single digits. After 2015 up till now in 2022, it is in the higher double digits, so we saw a lot going on there, and we are still seeing a lot of growth. I believe we do not have over-saturation yet. The market can still absorb more investments into rice processing and production.
Can we say the number of mills doubled or tripled or quadrupled?
More than fivefold.
Your company is involved in Lagos state’s Imota rice mill. Is there any latest on it that you can share, how is it going, and is it getting ready for delivery?
The stakes are very high now and there are a lot of parties involved to get this wonderful 32-ton-per-hour rice mill up and running. It will be one of the biggest rice mills in Sub-Saharan Africa. It is a landmark project and fundamental for Lagos, which is the biggest consumer of rice in Nigeria. It will be a crucial factor in ensuring food security here in the southwest, and we are pushing together with the government and the various contractors so that we can commission the plant this year.
What component of it did you provide?
We provided the whole rice mill. Basically from intake, pre-cleaning, storage, and parboiling up to the rice mill and bagging area was all provided through Buhler.
When we talk about local rice in Nigeria, there’s always this talk about quality in the context of mostly short grains. People complain that local rice for instance, doesn’t do well in making Jollof or Fried rice. This makes many people still prefer the foreign rice because of the aesthetics it offers. Is there a role for technology in solving some of these concerns by the consumers?
First, it begins on the field and which variety you grow. I will give you an example from India where there is the Basmati rice. It is very long and has a very high length-to-width ratio, and that’s also what attracts consumers; very long rice, and of course, it is aromatic. You have different varieties with different shapes and different sizes.
Here we mostly grow the FARO 44. The varieties that are present here can also produce longer grain, but I believe that is not the most crucial part because we have brands in the market, which have the desired sizes and properties that you need to make good Jollof rice.
One thing where technology on the processing side can help, is in a key parameter, which is called ‘Brokens’. When you process rice, the rice may break, and when it breaks, normally you separate the broken and you can sell them at a cheaper price. In your bag of rice, you only accept a certain percentage of broken grains otherwise the Jollof rice will not turn out that nice. So that’s very important.
If you have the right machines and the right process, you can reduce the number of broken grains generated in the process of whitening rice and that is where then you can increase the product quality.
It is very important for a healthy milling industry that quality plays a role because the consumer requires quality. This also helps the whole industry to live up to higher standards and produce better rice and using better technology.
Away from rice, looking at other grains, where are you seeing increasing demand for machinery and what is driving it?
We see two growth factors. One is in further value addition to wheat flour to see what can be made out of it in turning it into ready-to-eat products or those that you be prepared at home, such as pasta, noodles, biscuits, cookies, crackers and such products.
If we want to turn Nigeria into the great country that it can and will be, we have to start producing and processing across the whole agro-value chain in Nigeria
We see a lot of demand that has been existing but we are now seeing a switch where instead of wheat, processors want to use flour from local grains such Rice, Maize Sorghum, Soya, Beans, and Millets because that will reduce our Forex exposure. One of the hottest I see now is maize because it is very versatile.
There is also a lot of demand for Maize grains for example in the breakfast cereal industry for cornflakes, extruded snacks like cheese balls and all other snacks that are being sold in the go-slow (traffic), for example.
Then there is also demand for Brewer’s grains because the breweries are also using local grains like sorghum, maize, rice and to a certain extent cassava to brew instead of using imported malted barley. Here you also have a big demand for high-quality maize grains.
Maize is very versatile for direct consumption, for further value addition in consumer foods and in the grain industry. That’s where I see a lot of interests and to a certain extent also sorghum.
I believe Sorghum has a huge potential for export because when we look at the image it has in Nigeria, it is seen as the poor man’s food (or given to babies as pap).
But if you go to the U.S. or other western countries, when you want to buy sorghum flour, it is branded as ‘the most nutritious superfood from faraway’. You buy it for five pounds per 500 grams. It is extremely expensive and it is highly nutritious.
So you see how consumer perception can completely shift the game. While here in Nigeria it is considered a low-quality food, abroad where people are very health conscious and they also have the extra funds to invest in what they call a superfood, sorghum has a big advantage.
We should also be looking for what can also be exported from Nigeria to balance out the trade balance and to generate forex, which can further be reinvested into the country.
At independence, Nigeria was a leader in Cocoa production but now we are not yet we spend a lot importing derivatives of cocoa. How much processing equipment do you presently provide in Nigeria and more importantly, how can Nigeria become a leader in producing quality chocolate and other cocoa by-products on account of technology?
We have a bit more than a handful of Cocoa processors in Nigeria and we have supplied equipment for roughly half of the cocoa processors in the country.
One challenge that we have with cocoa is the same challenge we have with oil. We export in its raw form, and often not even cleaned properly.
It’s just exported to for example, Ghana, Ivory Coast, and even Cameroon where they have the facility to clean the cocoa and produce or process further into cocoa butter, cocoa liquor and cocoa powder. That on a larger scale is still missing in Nigeria.
Because we don’t have this processing infrastructure, the easiest way to make a quick buck is to export it, but it will not create jobs, will not lower the dependency on imports and finished products and therefore will not improve the trade balance.
What we have to do is ensure what is produced on the farms is processed in Nigeria, thereby creating jobs that will improve the GDP per capita.
This will then help people to spend more money, which will fuel the economy. It will help people to get trained. It will help people to get jobs and not lured to engage in illegal activities. These are possible when we produce in Nigeria for Nigerians.
Exporting the raw material and then importing the finished goods might be a way to deal with things in the short run. In the long run, it will only hurt and keep Nigeria as it is at moment.
But if we want to turn Nigeria into the great country that it can and will be, we have to start producing and processing across the whole agro-value chain in Nigeria.
Cocoa has a wonderful example of that because it is grown here, and there is a big off-taker market with roughly 220 million people. There is so much potential but right now all these products are imported, and this is what we want to change together with our partners.
Is it safe to say you provide equipment that can process every type of food? What do you do and what do you not do?
We are mostly active around grain processing and its derivatives. When you look at grain or oil seeds, we provide equipment to mill them but do not stop there.
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We provide equipment that can turn them into further value-added products like pasta, animal feeds and we turn them also into ready-to-eat foods, like chocolate, biscuits, wafers, crackers, cookies.
The easy way to say what Buhler is doing and what it is not doing is; if it’s grainy free-flowing product, there is a high chance that we provide equipment to process it. But we are not into liquid processing.
Even though we provide equipment for breweries and malting, these are in the grain cleaning and preparation area, and also storage. Before grains go into the brewing and fermentation tanks, they have to be cleaned, stored and then milled, which is where Buhler plays.
Can you give a broad view of your footprints in Nigeria across industries and sectors that your equipment and technologies power?
I will come from a global level and then zoom in on Nigeria. When we look at it globally, we are now at seven billion people. Every day, two billion people come in contact with food or eat food that is processed from Buhler machines.
I should also emphasize Buhler is not only in the food and grain sector. We are into advanced materials such as mobility and surface coating.
For example, here you’re looking out the window in this conference room. All these windows are tinted with special U.V protection, and there is a high chance that these treatments and coating was done on Buhler machines.
We are also very big in ink processing equipment. Every day, one million people come in contact with our solutions that are incorporated in cars, in mobile phones, in cosmetics, in ink that is used to print. So that’s basically how many lives we touch every day.
In Nigeria, the chances are very high that today you already ate some food item or product that was processed in Buhler machines. The chicken that you eat, there is a high chance it is fed from Buhler machines, same for the fish that you consume.
We are also talking about the crackers, the biscuits that you eat and can even buy in the go-slow (traffic). I always say whatever you can buy in the go-slow, it is a market for Nigeria because that is how the distribution is actually managed.
For me as an employee in Buhler we know we are not only here for business and figures. We are here to improve the livelihood of Nigerians by providing them access to affordable, safe and sufficient food.
The bigger we grow here, the bigger our food goes to lower the dependency to import food items, and the more affordable the food for the everyday Nigerian.
Any other thoughts you’d like to add?
We have a commitment to support Nigeria, investors and entrepreneurs to master the switch from a wheat-based industry towards using local resources and grains like maize, sorghum, millets, soya, beans and nuts.
This is why we have committed ourselves, invested and currently building the Grain Processing Innovation Centre in Kano.
This is an R&D facility where we are building a collaboration ecosystem that will focus on how much value we can get out and add to the local grains.
We are inviting our partners and customers to collaborate with us in this facility, not only in Nigeria but for the whole of Sub-Saharan Africa.
As of next year, this will be an R&D testing facility for milling of local grains. I believe it will be the collaboration and development hub that Nigeria needs and we are inviting everybody to participate.
