‘Investment in backward integration will save forex on French fries’
According to him, with about N2 billion invested in its processing facility and a plan to expand its current capacity, Nigeria may save about $45 million or N14.1 billion being lost yearly to capital flight used for importing French fries.
Speaking during a tour of the facility in Lagos, recently, Hemnani explained that the firm is presently working on increasing the market presence of its products as well as the value-chain, adding that yam fries from the company are already being exported to the international markets.
“At the moment, our production capacity is not at the optimal level, but we believe there is a lot of room for improvement. Our target is to have a plant like this in many more places across Nigeria. So far we have invested close to N2 billion in this facility. We bring all the raw materials and process them in this factory. 100 per cent of our local materials are locally produced while our packaging is done locally for export market”, he added.
On his part, Acting Managing Director of Bank of Industry (BoI), Waheed Olagunju, stated that the bank is encouraging firms that are investing in commodity-based industrialisation as a means of adding value to the nation’s natural resource endowments.
“This is a diversified company into many areas. We have financed them in areas of iron and steel and we have now come to see what they can do in area of agro processing. They have an application with us, so our coming here is part of the appraisal process.
“The export potential is enormous and also the foreign exchange generation capacity is also quite substantial. These are some of the multiplier effects and developmental impacts we look at when we finance projects. It is obvious that along the value chain, vertically and horizontally, the developmental impacts are quite considerable. This is why the multiplier effect of investment in agriculture is the highest relative to other sectors.
“They have also showed us that there is a huge supply gap that needs to be met. They are also telling us that the price of chilly is quite high. Once they go out to ask for the right volumes they require, the farmers push up the prices and this means there is need for increase in supply in the area of primary production for pepper.
This is why I keep saying that the unemployment rate in Nigeria is artificial, because if more of us go into pepper production, plantain production as well as yams to mention a few, there are off-takers who are ready to pick up these things.
“What we are producing locally cannot meet the needs of processing firms for production on yearly basis. We are currently being told that we are not producing enough fruits in Nigeria that will sustain viable, commercial production of fruit juices in this country. This means there are a whole lot of demands to be met in terms of primary production. We need to roll up our sleeves and go back to the farms to produce a lot of these products to be processed for domestic and export markets”, he added.He however expressed optimism of enhancing linkages among firms for value-chain development.