Ellah Lakes’ partnership in Enugu yields staple crop processing zone

Enugu State government and Ellah Lakes plc have reached an agreement for the expansion and development of the Ada Rice Company and plantation in Adani, Uzo-Uwani local government area into a staple crop processing zone (SCPZ).

The state entered the agreement through its Technical Committee on Privatisation and Commercialisation.

BusinessDay learnt that the landholding is currently 5,000 hectares, which is being doubled to 10,000 hectares. It would go from just rice at present, to include maize, soya bean and cassava, each of which would be cultivated on 2,000 hectares when the land is expanded to 10,000 hectares.

Ellah Lakes has also said that it will produce and process rice with the participation of over 200 indigenous farmers in the local out-grower programme. It will also develop a feed mill and ethanol processing plant on the site in Adani.

“There is a 5-ton per day mill already in place, and this will be expanded to 20 tons per day by mid-next year,” said Chuka Mordi, the company’s CEO in a phone interview.

“We are going to scale up the mill as we increase our production so as to do everything on site since it is a staple crop processing zone.”

The development is expected to create about 5,000 jobs over the next 24 months, and work is scheduled to begin immediately.

Once cassava cultivation starts, the ethanol plant is to follow in 12-18 months. The plant will have a processing capacity of 120,000 litres per day but starting with 50,000 litre per day, which would have been installed by the end of 2022.

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The soya and maize cultivation will be used to serve a feed mill, focused on bridging imports. However, Mordi explained that in the interim, cultivated crops would be sold as processing equipment are put in place.

“All staple crops to be produced will be processed on site,” he emphasised. “We are fully focused on becoming the largest agribusiness in Nigeria and Africa. Given the size of the space, and the gap in supply-demand, it is easily a billion dollar business and this plan is for import substitution.”

With over $5 billion of food imports yearly, Mordi estimates that with only a 10 percent share of that market, Ellah Lakes is eyeing a $500 million opportunity annually.

In a separate statement, Mordi described the new partnership as a “significant landmark for the company in fulfilling our strategic objective of diversifying our portfolio and production base, and we are very excited to be working with the Enugu State government.

“We are very pleased at this collaboration with the very progressive Government of Enugu State. For us, this is the beginning of a great journey to expand the industrial base of the state, and we look forward to a mutually beneficial, valuable and fruitful venture.”

He had also in an earlier interview with BusinessDay, highlighted the company’s plan to establish Staple Crop Processing Zones (SCPZ’s) in up to five states. He had explained that the SCPZ is an initiative of the Africa Development Bank (AfDB) to transform African Agriculture by focusing on 18 priority commodities across the five agro-ecological zones of Africa. The key priority of this initiative is an increase in primary production whilst developing allied agro-industries to absorb the additional production, add value to it, and produce and market high quality and nutritious food products to replace Africa’s over-dependence on imports and reduce our import bill. This generates something akin to a multiplier effect for industry and employment prospects at all stages of agricultural value chains.

“If we can successfully create up to five staple crop processing zones in Nigeria (ideally in up to five different states) in the next five years, I would view this as a successful outcome, as we would be creating employment, increasing IGR in states, and contributing to improving Nigeria’s current account balance in relation to food,” he said.