… in talks with Gombe farmers on supply
A $20 million tomato-processing plant owned by Africa’s richest man, Aliko Dangote, is set to reopen this month following more than a year closure due to the unavailability of its most important raw material – fresh tomatoes.
The plant, located near Nigeria’s northern city of Kano, is aimed at substituting imports from China.
“The plant is starting back in February,” a person familiar with the matter told BusinessDay. “There are negotiations currently going on with the Gombe State government to enable farmers from the state supply the factory.”
Nigeria produces around 1.5 million tons of tomatoes a year of which about 900,000 tons rot before they get to the market due to poor roads and storage facilities, according to the Agriculture Ministry.
The top three states that produce tomatoes in Nigeria are Kaduna, Sokoto and Gombe, all in the northern part of the country, according to data from the Nigeria Agribusiness Group.
The Dangote tomato plant designed to produce 1,200 metric tons per day was built following a 2011 Central Bank of Nigeria (CBN) study that showed it was cheaper to process tomato paste locally than import from China.
Africa’s largest economy imports about 300,000 tons a year of tomato paste from China worth $360 million.
Dangote’s facility, when reopened, will produce more than 400,000 tons of paste annually, with most of its raw material coming from farmers in the Kadawa Valley in Kano State.
Farmers will receive a guaranteed price of about $700 per ton compared with an average of less than $350, according to estimates by the central bank, which helped organise the farmers and arrange credit from banks.
“We are going to work with the farmers, they can afford to produce more because there is a processing factory and they don’t have to suffer losses like they did before,” the managing director of the factory, Abdulkadir Kaita, said.
The plant operations were however suspended last year following an invasion by a common tomato pest Tuta Absoluta, a leaf-mining moth, which destroyed most tomato farms – a situation that has resulted in scarcity and higher prices for the commodity.
There are only two fresh tomato processing plants in Nigeria, the Dangote plant and another located in Gombe State, for a population of 180 million people for which tomatoes are part of the staple diet.
The logistics for supplying the plant with raw materials have also been a problem in the past but is being sorted out, sources tell BusinessDay.
The 1,200 tons a day plant needs about 40 trucks of fresh tomatoes each day as input with each truck handling 30 tons of produce.
Agriculture contributed 28.7 percent to Nigeria’s GDP in the third quarter of 2016, with growth in the sector driven by output in crop production, according to data from the National Bureau of Statistics (NBS).
“The government is giving priority to the agric sector now with a lot of commitment. With this, more educated people are going into agriculture and this has increased output,” Emmanuel Ijewere, co-coordinator of the Nigeria Agribusiness Group, said.
“The average age of a farmer in Nigeria was between 57 and 68 years, now it is down to around 52 – 54. This is because a number of younger people are coming into agric with new knowledge,” he said.
