Analysts call for caution on palm oil sanctions

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Analysts say Nigeria must be cautious on meting out sanctions on firms importing palm oil as local production cannot meet a surging demand.

Buhari recently directed the Central Bank of Nigeria (CBN) to blacklist companies importing or smuggling palm oil and other products into Nigeria, according to Central Bank Governor Godwin Emefiele.

Analysts say sanctions should be meted on firms smuggling the product into Nigeria, but not those importing it legally for factory use.

Palm oil importers have been restricted from accessing foreign exchange in the official market since 2016, but they can obtain FX from elsewhere to import. But the restriction from FX market has made importation of the product difficult, prompting people to resort to smuggling.

Nigeria produces 930,000 MT to 1.3 million MT, but demand is about 2.1 million MT, industry sources say.

Mogaji African Farmer, head of agriculture and agro-allied group, Lagos Chamber of Commerce and Industry, (LCCI) said such sanctions may do in consumer companies that depend heavily on palm oil for production.

“How will they survive?” he asked.

“We are heavy consumers and light producers. So, this policy that they want to do is a ‘no no’ for me. And if you also ask the experts it’s a ‘no no’ for them too,” he said.

“What will other companies that make soaps and detergents and vegetable palm oil do? What will happen to them?

“With climate change, are we sure that we will get the yields that we require and almost all the palm oil companies are complaining of labour. Even if there is land, there may be conflicts from the community,” he added.

He said it is critical to give importers one or two years before implementing the policy.

“Are they releasing long-term capital? Can they buy the … Read More...

FrieslandCampina WAMCO partners 2Scale to boost local milk production

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FrieslandCampina WAMCO and 2SCALE are partnering to deepen the inclusive model for local sourcing of fresh milk in Nigeria.

This is in line with FrieslandCampina WAMCO’s Dairy Development Programme (DDP), which improves the livelihood of smallholder dairy farmers, deepens the dairy market, creates employment and raises the volume of fresh milk from empowered dairy farmers.

Sigrid Kaag, the Netherlands minister for Foreign Trade and Development Cooperation, said given the consistent result FrieslandCampina WAMCO has recorded in local milk sourcing, Nigeria has the right partner to stimulate growth in the industry.

Kaag confirmed the progress of the dairy maker’s DDP and observed the integration of sustainability initiatives throughout the company’s operations during a visit to FrieslandCampina WAMCO Nigeria recently.

“I see FrieslandCampina WAMCO runs a stellar operation. You have changed the status quo in local milk sourcing and are playing a key role as a private sector partner in achieving the SDGs,” she said.

The minister witnessed the signing of the partnership extension agreement on the DDP between FrieslandCampina WAMCO, represented by Ben Langat, managing director, and International Fertilizer Development Center (IFDC) represented by Albin Hubscher, president and CEO.

The aim of the agreement is to sustainably transform and lead the local dairy sector in Nigeria by supporting the transition of local dairy farming into modern dairy farming and developing key structures required for a sustainable value chain.

While discussing the DDP, Langat said, “As industry leader, FrieslandCampina WAMCO has established best practice models for local milk sourcing to thrive. By signing this partnership agreement, we are demonstrating the need for partnerships in contributing to food security.”



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Why Nigerian firms must increase food productivity

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Nigeria needs to increase food productivity to contain growing population.

The country is 201 million people currently, making it most populous in Africa, and with 2.6 percent annual growth, it promises to surge further.

Food production is not growing at the same pace as yield per hectare remains low and production cost remains high.

“The only two ways of doubling food production are through investment and science,” Scott Angle, director, National Institute of Food and Agriculture in the United States and former CEO of International Fertilizer Development Center (IFDC), told BusinessDay recently in Washington DC, United States of America.

“You will need to move from small-scale subsistence agriculture to more commercial agriculture,” he said, while addressing Nigeria and Africa’s food production model.

Nigeria has seen investments in flour, poultry and rice, but key investments are still lacking in Nigeria’s flagship crops, frustrating manufacturers who use them as inputs. Cocoa players complain that there have not been major private investments in the last six to seven years.

“Nigeria’s cocoa average yield per hectare is among the lowest in the world and this is due to old age of most cocoa plantations,” said Anna Muyiwa, plant biotechnologist, Cocoa Research Institute of Nigeria (CAN),

“We need to rehabilitate our old cocoa trees in all cocoa producing states. A completely rehabilitated cocoa plantation of proven clone will produce as much as 2.5 tons per hectare,” Muyiwa said, stressing the need to develop more hybrid varieties.

Wheat is hugely imported by flour millers whereas cassava is not turned into starch locally owing to poor equipment.

Nigeria is one of the least mechanised farming countries in the world with the country’s tractor density put at 0.27 hp/ hectare which is far below the Food and Agriculture Organisation (FAO) recommended tractor density … Read More...

Brewers face tough times as Nigerian economy sways

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Brewers in Nigeria are facing tough times as the Nigerian economy continues to see sluggish growth amid shrinking consumer wallets.

The industry fared poorly in terms of profits accruable in the first quarter of 2019.

A contributory factor is the decline recorded in sales caused by the shrinking consumer disposable income and economic sluggishness.

“Is it not when you feed well that you will drink beer?” Ike Ibeabuchi, a manufacturer and analyst, asked.

“People are cutting their spending and embracing the value brands,” he added.

Value brands are cheap brands such as Trophy, 33 Export, Life, More, Star Lite, Goldberg and Hero.

The more expensive premium brands are innovating ways of getting young people, including engaging in entertainment and offering free gifts and trips.

According to the Q1 financial results released by Nigerian Breweries, revenue increased marginally by 3 percent, moving to N91.3 billion from the N88.4 billion recorded in the corresponding period of 2018. Its cost of sales moved up 7 percent, from N44.9 billion to N48.2 billion in 2019 while its profit after tax dropped by 21 percent from N10.1 billion in 2018 to N8.01 billion in 2019.

The negative trend was also experienced in Guinness as the company’s revenue dropped by 4 percent to N33.6 billion in 2019, from N34.9 billion in the Q1 of 2018. Its cost of sales dropped marginally by 3 percent to N22.5 billion, having been N23.3 billion in the corresponding period of 2018. The company’s profit experienced a huge decline by 43 percent, dropping from N2.9 billion recorded in 2018 to N1.6 billion in 2019.

International breweries which joined the league of industry giants in 2017, recording a 35 percent upward movement in its revenue from N25.9 billion in 2018 to N35.09 billion in 2019. Its cost … Read More...

Nigerian pharmaceutical industry: Big steps, setbacks, prospects

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Nigeria’s drug makers have made big steps in recent times.

In 2018, an Anambra State-based drug maker, Juhel Nigeria, unveiled a new Oxytocin injection for pregnant women, the first of its kind in Africa.

Juhel’s injection, unveiled in Lagos in May, was manufactured in collaboration with the United States Pharmacopeia (USP). It has the capacity to reduce after-birth bleeding and maternal deaths, estimated at 58, 000 each year. The drug was hitherto imported outside Africa but is now locally manufactured in Awka, Anambra State, Ifeanyi Okoye, CEO of Juhel Nigeria Limited, said.

“We have the capacity to produce enough Oxytocin that will serve the rest of sub-Saharan Africa,” Okoye said.

Fidson Healthcare is a stand-out performer that no one can afford to ignore in the pharmaceutical space. The drug maker has an ultra-modern plant in Ogun State that matches what is seen in India, Brazil and the United States—countries well-known for drug manufacture.

The new manufacturing facility is one of the five facilities shortlisted for World Health Organisation (WHO) certification in Nigeria. It is an ultra-modern facility with high-tech machinery for manufacturing pharmaceutical products, in compliance with global standards and WHO certification. It is equipped with six production lines – tablets, capsules, liquids, cream and ointments, dry powder and intravenous fluids to meet the needs of the Nigerian and West African markets.

It once partnered United States firms, Immune Therapeutics, GB Pharma and American Hospitals & Resort (AHAR), for the marketing and distribution of Lodonal, a patent-protected product that is indicated for the management of patients with immune-compromising diseases.

Fidson today is owned by foreign investors to the tune of 25 percent.

It has pumped between N20 and N25 billion into its facilities in Lagos and Ogun states, said Fidelis Akhagboso Ayebae, founder and chief … Read More...