Olam to Expand Nigeria Rice-Milling Capacity by 50%

LAGOS (Capital Markets in Africa) — Olam International Ltd., one of the world’s largest food traders, will increase its rice-processing capacity in Nigeria by half as it moves to benefit from the country’s increasing investment in the food crop.

The company plans to build a second line at its factory in the northern Nigerian state of Nassarawa to provide an additional 120,000 tons of million capacity per annum by 2021, Ade Adefeko, vice president, corporate and government relations at Olam Nigeria said by phone in Lagos.

Singapore-based Olam, which started operations in the West African nation in 1989, currently has two plants in northern Nigeria with a combined milling capacity of 240,000 metric tons per annum. “Olam operates across the country as the biggest off-taker of paddy rice,” Adefeko said.

The investment comes amid intensified efforts by President Muhammadu Buhari’s government to encourage investment in agriculture and processing industries to help diversify the economy away from oil, which accounts for 90% of export earnings in Africa’s most populous country.

Agriculture is the biggest employer of labor, dominated by small-holder farmers. Olam is assisting more than 20,000 rice farmers in the nation to boost production by providing them inputs and training in modern farming techniques, Adefeko said.

The Central Bank of Nigeria said last week it will support more than one million farmers this year with 432 billion naira ($1.1 billion) loans to grow cash and food crops including rice, cocoa and maize.

Olam has 13,500 hectares of farmland in Nigeria out of which 4,421 hectares is cultivated for paddy rice and generating output of 4.5 to 5 tons per hectare. It hasn’t seen a significant impact of Covid-19 on its operations in Nigeria as the rural areas where its business is concentrated “are not much impacted at this time,” said Adefeko.

“The population density is low and the spread may be slow and can be contained faster and effectively.

Source: Bloomberg Business NEws