The Nation Newspaper

Tag: Food

  • Food seasoning market on fire?

    Food seasoning market on fire?

    The drive for market leadership, greater brand equity, awareness and market share has pitted food seasoning brands against one another, with seasonings such as Maggi, Knorr and Royco employing every trick to winthe battle. The entry of a leading seasoning powder into the cube market may, however, set the market on fire, writes ADEDEJI ADEMIGBUJI.

    Food seasoning plays a very significant role in family bonding if the right brand  is used in preparing delicacies. A good meal makes the family to yearn for  mummy’s food. This is because with culinary expertise, especially when the right brand of seasoning that makes people salivate is used, the meal becomes something of an experience the family relishes.

    From the interpretation of some great television commercials, which though look real, some house wives have made their children to inhale the aroma emanating from  neighbour’s kitchens while some have even lost their husbands to other women’s pots. This scenario has for long been played up by makers of various food seasoning brands and have made them to understand consumers’ behavoural pattern to stay ahead of competition.

    Currently, Nigeria’s seasoning market parades great seasoning brands such as Maggi from the staple of Nestle Foods; Knorr and Royco, from the staple of Unilever. These brands are leaders in their various market segments. None of them can be pushed aside in terms of brand equity, sales,  consumer loyalty and quality market offerings.

    Food seasonings belong to the food and beverage sub-sector of the consumer market. BGL Research and Intelligence, one of the foremost investment banking companies in Africa, estimated that the seasoning sector is worth N14.7 trillion. It also estimated that the total national demand for various types of food condiments and seasonings at 5,475 tonnes per annum.

    A ValueFronteira’s Food Seasoning Report showed the market potentials maintaining a continuous growth with long list of brands produced locally and abroad competing for appreciable market share.

    However, as keenly competitive the cube seasoning market is, it has continued to attract new entrants while old brands are not relenting on offering innovative products to stay ahead of competitors.

    Before now, Doyin Group of Companies; Unilever Nigeria; Daily Need Nigeria Limited and Nestle Nigeria Plc were among players dominating the market. Then, Unilever’s Royco Seasoning Powder variants – one for stew and the other for soup, and the popular Maggi brand successfully caused a stir in the market. The entry of more brands, however, is unsettling dominant brands, while incursion of powder seasoning such as Onga seasoning powder with its variants has provided alternative for consumers. Yet the cube market has remained huge.

    While big corporate brands such as Unilever and Nestle appeared intimidated with the level of sophistication of the technology, which drives innovation, market followers such as Doyin Group of Companies, manufacturers of Doyin cubes and Daily Need, manufacturers of Suppy brand have made little inroad into the market which has other strong brand, Knorr, that has carved out a niche for itself in the seasoning market over the years. Knorr cubes, after it was bought over from Cadbury Nigeria by Unilever, has remained a force to be reckon with.

    Obviously, the brand is growing very fast beyond Unilever’s heartland of Europe, especially in Africa, Latin America, Middle East and Asia. In Nigeria, Knorr has been the taste benchmark for Unilever. Based on this, the conglomerate was committed to building on the premium credentials of Knorr. No wonder, the company said, in the past one year, it has invested in machines and a new savoury hall. This, according to the firm, ‘is to enable us to adequately supply the market and continue to give consumers premium quality cube they have come to associate with Unilever’.

    The game is becoming tougher and every brand is tightening its belt to avoid a catastrophic market share slide with the entry of one of the leading powder seasonings, Onga, into the cube market.  Onga had dominated the power seasoning market for 10 years and in the last two years Promasidor, owner of the brand, had gone to its Research and Development (R&D) department to create a Onga Cube. From the look of things, the leading cube brands seem prepared to welcome the power seasoning giant with a defensive marketing. Months before the unveiling of the Onga Cube, both Maggi and Knorr  deepened and engaged various activations to sustain their market share and build new mindshare. Market analysts, however, said  it is a reflection of fear despite the firms’ market leadership.

     

    Fear or market insight?

    On Monday, October 7, last year, Unilever  deepened its campaign for Knorr to sustain its brand equity and share-of-mind among consumers through its Knorr Taste Quest Season 2, a cooking TV show. The firm’s Brand Building Director, Mr. David Okeme, said the show was expanded to increase participation hence, the need to create additional regional auditions in Lagos, Calabar and Abuja.

    Three months after, it re-launched its Knorr Beef and Chicken cubes to deliver superior taste with a new package believed to be a winning concept with a compelling insight and proposition for its consumers.

     

    NESTLE Maggi

    On February 17, this year, Nestle Nigeria Plc upset the market with a strategic partnership with Nokia to build more mileage for the Maggi cube, using the mobile phone to connect with Maggi offering. While Nokia is one of the leading original equipment manufacturers (OEMs) in the mobile telecommunication market category, Maggi has also been touted as the market leader in the food seasoning market category.

    Experts say the partnership between the two firms is meant to deepen the market of both brands. As a way of engaging its customers through first hand experience, consumers of both brands were treated to a special night of food and photography tagged: “Eat. Shoot.Repeat”. The event was organised to showcase Nokia’s flagship brands- Nokia Lumia 1520 and Lumia 1320. It was also a great platform for Maggi to penetrate the market of phone users, whose exponential growth, has placed Nigeria top in the global graph for phone users.

    Nestle’s, Business Manager, Culinary,  Guy Kellaway, said: “MAGGI, Nigeria’s leading cooking brand, is synonymous with good food. Good food means great memories, and of course, great stories, which is why we are creating and capturing good food-moments-the essence of the Maggi Brand. It was for this reason that Maggi was able to associate strongly with Nokia for this event.”

    Nestle again entered the Lagos market to give retailers and consumers a first look and taste of the new Maggi Chicken cube.  The move, according to Kellaway, was part of ongoing efforts of the firm’s brand managers to constantly improve Nestlé products and make them tastier, healthier, and affordable with better nutritional value.

     

    Promasidor’s Onga powder joins the Cube league

    With the buoyant cube seasoning market expanding yearly, Promasidor has taken a bold step to dare dominant brands from the staple of leading  companies by creating the cube form from its Ongaseasoning powder. Early this year, when Promasidor  launched the product, its Executive Director, Commercial, Mr. Kachi Onubogu, said: “After almost two years of insightful and innovative work by the Promasidor team, I am happy to welcome Onga Cube into the Promasidor Nigeria family of brands.”

    He remarked that the new OngaCube comes in singles of 4gm and in two variants. It is packaged with 50 cubes in a pouch and 24 pouches in a carton.

    To sell a new value-creation for consumers and still retain its powder market dominance, Onubogu said: “Onga in cubes is a completely different formulation from the existing Onga powder because we did a complete reformulation from scratch, paying particular attention to what the consumers want in an ideal brand of seasoning cube.”

    Onga is arguably the number one in the seasoning powder segment and it was introduced in 2004. The big players (and smaller brands) have launched variants of their brands, attesting to the fact that Promasidor did the right thing by pioneering the powdered segment of the seasoning market in Nigeria. However, they have hardly made any success in that category.

     

    Can Ongaupset Maggi, Knorr in cube category?

    The Managing Director/ Chief Executive of Promasidor, Chief Keith Richards, said the success of the Ongabrand in the powder form will be replicated in the cube market. He said this is evident considering the success of the company in other market offerings.

    Analysts believe that with Promasidor innovation in making average consumers have access to milk by bringing the first sachet milk into the country, the company could upset market leaders in the cube seasoning market. This is evident in Richard’s statement: “At Promasidor Nigeria Limited, we pride ourselves in pioneering cutting-edge innovative solutions to the delight of our consumers in terms of our product offerings. Twenty years ago, we set out to improve the lives of every Nigerian with the introduction of nutritious Cowbell milk in single serve sachets that made milk affordable to every Nigerian household.

    “Since then, we have continuously raised the bar of innovation with the introduction of Top Tea in round tea bags, Onga Seasoning in powdery form and flavoured milk drink: Cowbell Choco, Cowbell Strawberry, Cowbell Sweet Milk and Cowbell Coffee. This is a true testament to our vision of providing quality products and empowering the lives of Nigerians.”

    Meanwhile, as the competition intensifies, market observers are of the view that the entry of Onga into the cube market category will re-configure the market share of the leading brands and this might come with some consumers switching brands to experience the new entrant.

  • Food seasoning market on fire?

    Food seasoning market on fire?

    The drive for market leadership, greater brand equity, awareness and market share has pitted food seasoning brands against one another, with seasonings such as Maggi, Knorr and Royco employing every trick to winthe battle. The entry of a leading seasoning powder into the cube market may, however, set the market on fire, writes ADEDEJI ADEMIGBUJI.

    Food seasoning plays a very significant role in family bonding if the right brand is used in preparing delicacies. A good meal makes the family to yearn for  mummy’s food. This is because with culinary expertise, especially when the right brand of seasoning that makes people salivate is used, the meal becomes something of an experience the family relishes.

    From the interpretation of some great television commercials, which though look real, some house wives have made their children to inhale the aroma emanating from  neighbour’s kitchens while some have even lost their husbands to other women’s pots. This scenario has for long been played up by makers of various food seasoning brands and have made them to understand consumers’ behavoural pattern to stay ahead of competition.

    Currently, Nigeria’s seasoning market parades great seasoning brands such as Maggi from the staple of Nestle Foods; Knorr and Royco, from the staple of Unilever. These brands are leaders in their various market segments. None of them can be pushed aside in terms of brand equity, sales,  consumer loyalty and quality market offerings.

    Food seasonings belong to the food and beverage sub-sector of the consumer market. BGL Research and Intelligence, one of the foremost investment banking companies in Africa, estimated that the seasoning sector is worth N14.7 trillion. It also estimated that the total national demand for various types of food condiments and seasonings at 5,475 tonnes per annum.

    A ValueFronteira’s Food Seasoning Report showed the market potentials maintaining a continuous growth with long list of brands produced locally and abroad competing for appreciable market share.

    However, as keenly competitive the cube seasoning market is, it has continued to attract new entrants while old brands are not relenting on offering innovative products to stay ahead of competitors.

    Before now, Doyin Group of Companies; Unilever Nigeria; Daily Need Nigeria Limited and Nestle Nigeria Plc were among players dominating the market. Then, Unilever’s Royco Seasoning Powder variants – one for stew and the other for soup, and the popular Maggi brand successfully caused a stir in the market. The entry of more brands, however, is unsettling dominant brands, while incursion of powder seasoning such as Onga seasoning powder with its variants has provided alternative for consumers. Yet the cube market has remained huge.

    While big corporate brands such as Unilever and Nestle appeared intimidated with the level of sophistication of the technology, which drives innovation, market followers such as Doyin Group of Companies, manufacturers of Doyin cubes and Daily Need, manufacturers of Suppy brand have made little inroad into the market which has other strong brand, Knorr, that has carved out a niche for itself in the seasoning market over the years. Knorr cubes, after it was bought over from Cadbury Nigeria by Unilever, has remained a force to be reckon with.

    Obviously, the brand is growing very fast beyond Unilever’s heartland of Europe, especially in Africa, Latin America, Middle East and Asia. In Nigeria, Knorr has been the taste benchmark for Unilever. Based on this, the conglomerate was committed to building on the premium credentials of Knorr. No wonder, the company said, in the past one year, it has invested in machines and a new savoury hall. This, according to the firm, ‘is to enable us to adequately supply the market and continue to give consumers premium quality cube they have come to associate with Unilever’.

    The game is becoming tougher and every brand is tightening its belt to avoid a catastrophic market share slide with the entry of one of the leading powder seasonings, Onga, into the cube market.  Onga had dominated the power seasoning market for 10 years and in the last two years Promasidor, owner of the brand, had gone to its Research and Development (R&D) department to create a Onga Cube. From the look of things, the leading cube brands seem prepared to welcome the power seasoning giant with a defensive marketing. Months before the unveiling of the Onga Cube, both Maggi and Knorr  deepened and engaged various activations to sustain their market share and build new mindshare. Market analysts, however, said  it is a reflection of fear despite the firms’ market leadership.

     

    Fear or market insight?

    On Monday, October 7, last year, Unilever  deepened its campaign for Knorr to sustain its brand equity and share-of-mind among consumers through its Knorr Taste Quest Season 2, a cooking TV show. The firm’s Brand Building Director, Mr. David Okeme, said the show was expanded to increase participation hence, the need to create additional regional auditions in Lagos, Calabar and Abuja.

    Three months after, it re-launched its Knorr Beef and Chicken cubes to deliver superior taste with a new package believed to be a winning concept with a compelling insight and proposition for its consumers.

     

    NESTLE Maggi

    On February 17, this year, Nestle Nigeria Plc upset the market with a strategic partnership with Nokia to build more mileage for the Maggi cube, using the mobile phone to connect with Maggi offering. While Nokia is one of the leading original equipment manufacturers (OEMs) in the mobile telecommunication market category, Maggi has also been touted as the market leader in the food seasoning market category.

    Experts say the partnership between the two firms is meant to deepen the market of both brands. As a way of engaging its customers through first hand experience, consumers of both brands were treated to a special night of food and photography tagged: “Eat. Shoot.Repeat”. The event was organised to showcase Nokia’s flagship brands- Nokia Lumia 1520 and Lumia 1320. It was also a great platform for Maggi to penetrate the market of phone users, whose exponential growth, has placed Nigeria top in the global graph for phone users.

    Nestle’s, Business Manager, Culinary,  Guy Kellaway, said: “MAGGI, Nigeria’s leading cooking brand, is synonymous with good food. Good food means great memories, and of course, great stories, which is why we are creating and capturing good food-moments-the essence of the Maggi Brand. It was for this reason that Maggi was able to associate strongly with Nokia for this event.”

    Nestle again entered the Lagos market to give retailers and consumers a first look and taste of the new Maggi Chicken cube.  The move, according to Kellaway, was part of ongoing efforts of the firm’s brand managers to constantly improve Nestlé products and make them tastier, healthier, and affordable with better nutritional value.

     

    Promasidor’s Onga powder joins the Cube league

    With the buoyant cube seasoning market expanding yearly, Promasidor has taken a bold step to dare dominant brands from the staple of leading  companies by creating the cube form from its Ongaseasoning powder. Early this year, when Promasidor  launched the product, its Executive Director, Commercial, Mr. Kachi Onubogu, said: “After almost two years of insightful and innovative work by the Promasidor team, I am happy to welcome Onga Cube into the Promasidor Nigeria family of brands.”

    He remarked that the new OngaCube comes in singles of 4gm and in two variants. It is packaged with 50 cubes in a pouch and 24 pouches in a carton.

    To sell a new value-creation for consumers and still retain its powder market dominance, Onubogu said: “Onga in cubes is a completely different formulation from the existing Onga powder because we did a complete reformulation from scratch, paying particular attention to what the consumers want in an ideal brand of seasoning cube.”

    Onga is arguably the number one in the seasoning powder segment and it was introduced in 2004. The big players (and smaller brands) have launched variants of their brands, attesting to the fact that Promasidor did the right thing by pioneering the powdered segment of the seasoning market in Nigeria. However, they have hardly made any success in that category.

     

    Can Ongaupset Maggi, Knorr in cube category?

    The Managing Director/ Chief Executive of Promasidor, Chief Keith Richards, said the success of the Ongabrand in the powder form will be replicated in the cube market. He said this is evident considering the success of the company in other market offerings.

    Analysts believe that with Promasidor innovation in making average consumers have access to milk by bringing the first sachet milk into the country, the company could upset market leaders in the cube seasoning market. This is evident in Richard’s statement: “At Promasidor Nigeria Limited, we pride ourselves in pioneering cutting-edge innovative solutions to the delight of our consumers in terms of our product offerings. Twenty years ago, we set out to improve the lives of every Nigerian with the introduction of nutritious Cowbell milk in single serve sachets that made milk affordable to every Nigerian household.

    “Since then, we have continuously raised the bar of innovation with the introduction of Top Tea in round tea bags, Onga Seasoning in powdery form and flavoured milk drink: Cowbell Choco, Cowbell Strawberry, Cowbell Sweet Milk and Cowbell Coffee. This is a true testament to our vision of providing quality products and empowering the lives of Nigerians.”

    Meanwhile, as the competition intensifies, market observers are of the view that the entry of Onga into the cube market category will re-configure the market share of the leading brands and this might come with some consumers switching brands to experience the new entrant.

     

     

  • Resolving Africa’s food crisis

    Resolving Africa’s food crisis

    Experts and stakeholders gathered at the University of Nigeria, Nsukka (UNN) to proffer solution to Africa’s food crisis, reports OLADELE OGE (Mass Comm.).

    How can Africa achieve food sustainability and feed its populace? James Ogbonna, a professor of Crop Science at the University of Nigeria, Nsukka (UNN), believes the continent could make that mark by adopting crop biotechnologyto improve food production.

    Ogbonna spoke at an international conference on food security and biotechnology organised by the African Biosafety Network of Expertise (ABNE) in collaboration with the UNN, University of Groningen in Netherlands, Ehcloret University in Kenya, and University of Oragonding in Burkina Faso.

    The lecture examined the benefits and constraints in agricultural productivity in Africa.

    The lecture focused on improving awareness on food security and how to educate the African citizens on the use of technology to increase food production. Prof Ogbonna spoke on Adoption of crop biotechnology as a food security option: Benefits and constraints.

    He said scientists had made several efforts in recent time to consolidate the gains of biotechnology to ensure adequate production of food and energy drinks, saying: “Biotechnology has been tested to have capacity to increase productivity by fortifying crops with necessary minerals and vitamins that will enhance nutritional needs of people.”

    He dismissed as rumour the fears that crops produced from biotechnology are nutrient-deficient, saying such claim had not been scientifically proved. He told the participants to rely on research and not on misleading information from people he described as illiterate.

    Ogbonna outlined some of the benefits of the technology, urging more awareness on food programme and security in Africa. Through this, he said, Africa would be equipped to combat unexpected diseases and prevent death that may arise from wrong information.

    The Enugu State Commissioner for Environment, Dr Nnemeka Chukwuone, urged the participants to uphold new method of ensuring safety of locally-produced beverages, noting that there had been crisis in the nation’s agricultural extension.

    The commissioner appealed to the Federal Government to promote quality research through adequate funding of higher institutions to address problems plaguing the country’s agricultural sector.

    Dr Nnemeka said agricultural extension practice was being gradually phased out, stressing that farmers had misplaced their responsibility in producing quality food for the citizens.

    Earlier, the Local Organising Committee (LOC) chairman, Dr Aja Nwachukwu, said efforts were being made to contain the threats and the challenges of low production of food in Nigeria. He urged elaborate research and training to achieve the aim.

    The co-ordinator of the seminar, Prof Jerry Ugwuanyi, explained that part of the aim of the lecture was also to address food contamination. He urged the participants to spread the message of biotechnology to rebuild the capability of Africa to achieve food security.

    He hinted that useful information gathered from research and biotechnology conferences would be recommended to African government and other relevant agencies working to ensure safety of foods and human lives.

    Responding to question on the quality of the imported food, Mrs Rosline Gidado, one of the facilitators, said a concrete plan was underway to strengthen the campaign in rural communities to ensure throughout counseling.

     

  • How food manufacturing can boost growth, by PCCI

    The  food manufacturing  industry can drive economic growth and job creation to new heights if  supported, a fomer President, Port Harcourt Chamber of Commerce and Industry, Dr Hyde  Ochia,  has said.

    According to him, a robust  food manufacturing can contain inflation, support industry and services, and enhance employment opportunities.

    He said food processing has assumed greater significance in view of increasing activities promoted   through the Agricultural Transformation Agenga (ATA).

    The rise in food processing, he   said, ensured a lower pressure on  employment schemes.

    He said the food processing Industry will indirectly support development of agriculture growth and  farmers.

    He noted, however, that food processing industry is badly affected due to poor availability of power. Growth of industry, according to him, is not coming due to scarcity, hence power availability to improve, which will help over all to all round development of the industry.

    On the development of food processing industries, he said multi-pronged strategies should  be  taken to reduce wastage of produced goods.

    Ochia said food manufacturing, represent technologies and solutions to needs in food security, human health, economic development and environmental sustain-ability.

    With tremendous investment in  farming across the country, Ochia   said  there  was a need  to  improve  food processing to reduce wastage.

    Significant opportunities, he  noted, exist for companies in the food-processing sector.

    He called for more work to be done to meet the nation’s food demands as well as achieve the national policy driven to boost agriculture output.

    He called on the government to  provide an enabling environment through prudent policies and regulations for the private sector to thrive.

  • Ebola: Govt urged to ban food import

    To prevent the spread of Ebola through farm produce, the Federal Government has been advised to ban the importation of certain foods.

    According to Prof Tola Atinmo, immediate past chairman, Federation of African Nutrition Societies, agricultural and health watchdogs must keep an eye on poultry to  prevent contaminants in dairy products that can create an environment  for Ebola to prosper.

    He said adultrated food could contain poisonous substances which may render it injurious to health.

    To ensure that the disease is not spread through bush meat, he said  meat should come from regulated, government-inspected slaughter facilities.

    He urged food retailers and  growers to move to ease consumer concerns over the safety of their products.

    Fruit and vegetables should be produced on farms that are managed by safety conscious growers, Atinmo said.

    He said the country of origin tests must be conducted by the National Agency for Food and Drug Administration and Control (NAFDAC) and  other agencies to find cases of misleading origin claims.

    Atinmo said tests and investigations must be done to trace documents and analyse the accuracy of  food samples.

    He stressed the need to ascertain   whether people were receiving accurate information on the origin of their food and where the results are good for consumers and businesses.

    According to him, it is vital that consumers are provided with a true picture as to where the food they buy comes from.

    Ebola is a severe, often-fatal disease in humans and non-human primates (monkeys, gorillas, and chimpanzees) that has appeared sporadically since its initial emergence in 1976.

  • ‘Why we need a food map’

    ‘Why we need a food map’

    The Deputy Director and Head, General Management Division, Agricultural and Rural Management Institute (ARMTI), Dr. Ademola  Adeyemo, said  the  nation  needs  a  food map to  help identify food clusters across the country.

    Adeyemo said a  food map would  not only help identify plus points in terms of crop strength, production, processing, but also help the government  in ensuring the desired interventions to expand the food export market.

    To boost  food production, he said the government needs  to  devise new schemes to provide last- mile delivery to farmers, which include farm-to-shelf schemes  such  as  setting up mobile processing vans which could reach out to farmers. It also includes setting up small food processing units, providing business incubation, training and a processing centre at village level so that farmers’ produce is processed and reach markets.

    Outlining other  priorities for the  government, he  called  for  measures  to  boost food processing; mitigate post-harvest fruit and vegetable losses;drive and accelerate food processing industries’ growth; deregulate and simplify governmental systems.

    He  suggested  that  more  efforts  be made  to   promote  industry-government education linkages, favourable tax regime, rejuvenate mega food park schemes, cold chain development, growth-oriented regulatory environment, and reforms, to take on inflationary challenges to the  economy.

    Given the inflationary pressure on perishables , he  asked   that  supply chain management needs to be improved.

    He also emphasised on connecting directly with farmers to bridge the gap between wholesale and retail prices.

    Meanwhile, the  President, Association of Small  Business Owners  of Nigeria(ASBON),Dr Femi Egbesola   has called  on the  government to take steps to   incentivise the   private sector to invest   in agricultural infrastructure.

    All efforts are required, he  added,   should  be done through   technology interventions, training of stakeholders to produce the world class processed food products. The output, according to him, should be able to meet the global standards.

    Egbesola   urged government  to  strengthen the  Agricultural   Research  Council of Nigeria  to   carry out cutting edge research; provide for a framework for constantly updated curricula to research  institutions, assist and provide a linkage to regional institutions in their activities.

    He   said  strong linkages need  to  be built to transfer the technologies developed in isolation at different research organisations to their targeted beneficiaries and that  the industry should share the responsibility of product innovations by offering “value for money proposition” and design customised products to be readily accepted by  consumers.

     

  • Imo disburses N270m to boost food production

    Imo State government has begun the disbursement of N270 million grants to the departments of agriculture across the 27 local governments, to boost food production.

    The Chairman of the Local Government Service Commission, Mr. Mathew Nworgu, a lawyer, who spoke with reporters in Owerri, said the  Integrated Agric Farm Programme was conceived to revive agric departments and attain food security, especially in the rural communities.

    He said under the programme, each of the 27 councils would receive N10 million, which would be managed by the heads of the agric departments for livestock and crop production, adding that the project recorded over 90 per cent success after the first evaluation.

    Nworgu said: “We’ve just concluded a monitoring tour of the local governments to evaluate the success of the programme. It has recorded over 98.9 per cent success. The agric departments are alive with activities. The poultry and piggery departments are thriving. We are satisfied with their output.

    “When the governor announced the plan to disburse the money, we  moved in to ensure it was not diverted or wasted. We made sure that it was managed by the heads of the agric departments. Today it is a success, it will boost food production.”

  • Can food processing zones do the trick?

    Can food processing zones do the trick?

    To promote agriculture, the Federal Government has established the Staple Crops Processing Zones (SCPZ) to provide the critical infrastructure to boost production, improve market access and attract private sector investment in agribusiness. But  experts are not impressed; they doubt the sincerity of the scheme. DANIEL ESSIET reports.

    IN  the past, the Federal Government announced several mega projects, which promised to drive job creation and technology development. The Minister of Agriculture and Rural Development, Dr Akinwumi Adesina, said in designing such projects, the government expects the primary beneficiaries to be the more than 10 million small farmers who make a living growing diverse crops and raising animals. These farmers, he explained, are also believed to be part of the value chain that maintains food production and thousands of jobless youths.

    He said while agricultural growth will provide the base for increasing incomes for about 100 million rural persons that live below the poverty line, additional measures are required to make this growth inclusive.

    Achieving this has involved many steps, which include tackling infrastructure, which threatens the agribusiness sector. This step is to encourage agricultural development and increase incomes for farmers.

    To further boost efforts in that direction, the government has established Staple Crops Processing Zones (SCPZs). SCPZ is a vast zone where there is commercial production of food, which is expected to attract the private sector to set up food processing plant that would process agric products into finished items.

    The minister said the SCPZs are designed to boost agricultural productivity, improve farmers’ linkages with agro-processors, and scale up resilience to current and future climate variability. Six staple crop processing zones are established in Kogi, Kano, Rivers, Niger, Enugu and Anambra states.

    The sites are designed to be multi-crop processing zones, located near high agricultural production areas with cluster of agro-processing activities. The zones would help to process the raw foods produced by farmers into finished foods and other economic products that would benefit the area.

    The successful implementation of the SCPZs is estimated to generate revenues of between N660 billion and N1.4 trillion per year to the economy and create estimated 250,000 jobs.

    The direct beneficiaries include farmers, workers in the SCPZ processing areas, small and medium businesses.

    According to the United Nations Industrial Development Organization (UNIDO), the first phase of the Staple Crop Processing Zones (SCPZs), will gulp estimated $1,063.1 billion.

    In partnership with the Federal Ministry of Agriculture and Rural Development, UNIDO has developed master plans for establishing the zones. So far, the zones have already attracted investments totaling $350 million from different financial institutions.

    The World Bank has committed over $100 million to develop sustainable institutions and infrastructure in the zones, while the African Development Bank has committed over $152 million to make available low interest loans to the government, specifically for the development of infrastructure within the zones.

    The International Fund for Agricultural Development has also pledged $70 million to build capacity of small farmers to ensure inclusiveness and equitable wealth creation in the zones.

    UNIDO representative in Nigeria, Dr. Chukwuma Ezedinma, said the funds would cover specialised and support facilities, including external infrastructure, such as road connectivity, highway strengthening, rail connectivity, air and seaport connectivity, power linkages and external water supply linkages.

    He said the six staple crop processing zones are estimated to cost $1,063.1 billion. The breakdown is as follows: Niger State ($181.4 million); Kano State ($151.1 million); Anambra State ($186.6 million); Rivers State ($79.6 million); Kogi State ($314.7 million); and Enugu State ($149.7 million).

    Already, private sector investors have been secured for the Alape, Badeggi and the Bunkure zones and they are Cargill USA, Nigeria Flour Mills, and Dangote Group.

    Of the 14 SCPZs selected for development in the country, six are to take off in the first phase. There are Bunkure in (Kano State) for rice, tomato and sorghum; Agbadu-Alape (Kogi State) for cassava; Badeggi (Niger State) for rice; Ketu (Lagos State) for aquaculture; Omor (Anambra State) and Adani (Enugu State) for rice and Okorolo (Rivers State) for fisheries and aquaculture.

    Alape SCPZ in Kogi will focus on the production of starch and sweeteners. It is expected to produce 62,000 tonnes of starch, 5,000 tonnes of sweeteners, 720,000 tonnes of cassava root and create income impact of about 90 million dollars to the economy of Kogi State.

    Stakeholders’ view

    For experts, it is a very good thing the SCPZs are being implemented but they noted that their prospects for success are as great as their chances for massive failure.

    Speaking  with The Nation, the  Programme Coordinator, Farmers Development  Union (FADU), Mr. Victor  Olowe,  said there are fears the  projects will go  the  way  of other  white  elephant projects if  the  government is not able to create a distinctive conducive ‘localised’ business environment for implementation and management of the SCPZs.

    While there are high hopes on paper, Olowe’s concern is that most of the zones lack critical services and incentives to help them take off successfully within the scheduled timelines.

    He said the critical services that will enable the clusters work effectively include uninterrupted supply of electricity and good roads constructed in zones. This, according   to him, would reduce losses of products on transit and reduce cost of transportation faced by farmers supplying the raw materials to the plants. These are almost nonexistent in some of the zones.

    Without access to land, key inputs such as fertilizer, seeds and loans, by the vast majority of small scale farmers who own one or two acres on average, serious commercial activity will become virtually impossible.

    He lamented that the zones lack basic rural infrastructure to bring produce to towns or to store them, which make trading difficult. Without connecting the rural areas to larger infrastructure and small holders’ produce for better access to input by farmers, attracting large investment to the zones will be difficult, he added.

    While supporting clustering of smallholders and investment in specific value chains, he expressed concern that if basic interventions for small farmers are not prioritized over trade facilitation and large infrastructure, corridors may end up helping mostly large companies.

    Like  the  Growth Enhancement Support (GES), he  is  concerned  farmers within  the  zones  would be  deprived  of  funding to  access  machinery and parts as well as modern inputs at affordable rates to improve their farming. Such inputs will include fertilizers, insecticides, other pesticides or chemicals, implements/medium term machinery.

    The other issue is how the government will implement the SCPZs to be effective and not end up as the farm settlement schemes, industrial estates among others. He raised doubt that the SCPZs will be  implemented  in  such  a  way to ensure synergy and maximize social and economic benefits  with other existing programmes under the Agricultural Transformation Agenda.

    In  his  contribution, World  Bank  consultant, Prof. Peter Okuneye, said  the  programme  was  a good one  as it  was meant   to increase production capacity and reduce post-harvest losses. According  to him, the  policy would enhance food security, create jobs and stimulate rural agro-industrialisation, only  that  the    poor  state of the nation’s infrastructure  would not let it work.

    He  explained  that  the  deteriorating infrastructure for the marketing and movement of produce, such as roads and telecommunications, as well as overall production capacity (including lack of fuel, electricity and input manufacturing industries), will  lead to high cost of  production  across the  zones.

    He  said  nothing  has  been  done  to improve  investment  on  the state’s roads, bridges and multi-modal transportation systems let alone supporting public transit systems across the state.

    He  said  one  reason  the  programme may fail  is  that  government  may not able  to improve the  transportation  of produce and inputs to and from markets for  small-scale rural farmers, particularly in remote areas, as well as major industries.

    Currently, Nigeria  is   characterised by poor   post-production and marketing infrastructure, he said. For instance, the  nation lacks  good commercial grain handling and storage system. He said  inadequate storage facilities in rural areas, coupled with poor handling and poor post-harvest technologies, have caused exceptionally high post-harvest losses, particularly for many resource-poor rural farmers. Essential public sector post-production and marketing infrastructure across the country, he  added,   has been deteriorating because of lack of public investment.

    In addition, the collapse of the rural economy made it unviable for these services to be performed by private sector stakeholders

    To succeed, the World  Bank  consultant, said the  government will have to address multiple hurdles in the context of limited human resources, corruption, political pressures, shifting priorities, and inadequate infrastructure.

    He said the government should   therefore make its plans as targeted and explicit as possible. They can concentrate investment on a value chain (all economic activity, from inputs to market associated with a crop), on a “breadbasket” region positioned for large productivity increases, or on an infrastructure corridor.

    He said close collaboration between the government and the private sector will enable strong year-on-year growth in an otherwise stagnant agricultural sector.

    To carry out an agricultural development strategy, he  said  government officials must work with farmers and the private sector across departments, from the central ministry to extension workers.

    The evidence suggests that agricultural development programmes also require the active engagement of the private  sector because they typically have access to capital and organisational know-how.

    According to him,  several issues are hampering the  initiation of a solid positive growth path for agriculture. He  said  Nigeria  needs a structural paradigm shift and  transformation towards sustainable agricultural production based on in-depth structural and broad policy changes.

    To  make the  zones  work, he   said  there  is need to support rural traders, develop and catalyse local supply chains, creating effective demand for the produce of smallholder farmers. The  establishment of rural centres and agri-dealers is essential. Including input and output markets, production services, and transporters, among others, is vital.

  • Price hike inimical to food security, says consultant

    INCREASED food prices will have negative impact on food security, an expert, Prof Abel  Ogunwale has  said.

    Speaking with The Nation, Ogunwale, a consultant to the  World Bank, said the  prices  of   commodities, especially those  grown  in the North, were experiencing spikes and could remain higher if there were no increase in local production following insecurity.

    He said markets are sensitive to price fluctuations and there are  impacts on household income and food consumption across the country.

    He  explained  that  acute price hike adds to inflationary pressures and  that poor consumers could spend even higher share of their limited income on food.

    In most  cases,  households of employees in urban areas are most affected by price increases.

    The main income source of paid employees, service sector and industrial livelihood groups is non-agricultural wage, which accounts for over 80 per cent of income.

    Apart from paid employees, he   noted  more low-income households are also affected in both rural and urban areas.

    When floods are taken into account, low-income groups and agricultural income-dependent livelihoods are worst hit, with the highest increase of under-nourishment among sharecroppers.

    However, Ogunwale  said  increasing purchasing power was essential to the undernourished to obtain access to food.

    Meanwhile, the Nigerian Institute of Social and Economic Research, Ibadan, has raised the alarm over the rising food prices, blaming the loss of 40 per cent of the nation’s total food production on farmers’ lack of storage facility.

    At the institute’s monthly seminar series held in Ibadan, Head, Productive Sector Group, Economic Policy Research Department (NISER), Dr. Timothy Oni, who delivered a paper titled: ‘Reducing food crop losses through post-harvest management in Nigeria’, said availability and accessibility of most food crops in Nigeria was being threatened, leading to an astronomical rise in food prices. He warned that if not quickly checked by the Federal Government, increase in population and dwindling land resources could lead to adverse impact on food security and economic development.

    He said: “It is necessary to reduce food crop losses in order to combat hunger, raise income and create employment along food supply chain and thus tame poverty in Nigeria.

    “Post-harvest losses due to inefficient harvesting, processing and storage techniques ranged between 20 and 40 per cent of the total food production in Nigeria. Rural areas typically have poor transportation, poor water supply, poor source of energy and poor marketing facilities. All these, coupled with predominance of poor farm implements and rudimentary post-harvest technology, worsen the problem of post-harvest food losses.”

    Oni added that despite the Federal Government’s effort in addressing some issues responsible for the loss, post-harvest food losses were still substantial while food imports bills have been rising in order to meet the shortfall in food availability.

  • Group laments decline in food manufacturing

    Group laments decline in food manufacturing

    THE Association of  Micro Entrepreneurs of Nigeria (AMEN)  has decried the decline in food manufacturing, urging the government to reverse the situation.

    Its President, Prince Saviour Iche,  said Nigeria used to be attractive  to multinational companies seeking to reduce production costs, but because of poor infrastructure, costs have gone up.

    According to him,  food manufacturers are grappling with some problems. He listed these as increased wages, cost of doing business and a weak currency, noted that these have forced multinational companies to rethink their strategy to remain competitive.

    For firms that are not in a position to move up the cost/quality curve, an attractive option, he  suggested, is to shift their operations to other parts of West Africa where production costs are still a fraction of what obtains in the country.

    He said beacause local and multinationals were facing competition, some of them had to  relocate.

    He said the government should     create a high value-adding manufacturing industry, as opposed to its traditional low-cost, low value-added ecosystem.

    In doing so, he said, the focus had been on indigenous innovation – creative production that is less reliant on foreign capabilities.

    He called on the  government to create an industrial corridor by   investing in vital support infrastructure, such as power plants, water facilities and transport infrastructure.

    “This means that local  manufacturers need to be prepared for increasing competition in higher value manufacturing and consider some options when looking to offshore operations,” he added.

    He noted that  the economy  needs to expand its industry base to cover new products and transform relationships between research, skills, training and industry.

    At the micro level, he  said companies were creating a workforce, which needs to begin through schools, universities and even into organisations.