The huge potential of the cassava value chain has been further keyed into by Union Dicon plc with the company signing a share subscription agreement to finalise the purchase of Ere Egwa farms, representing an additional 2,000 hectares of cassava farmland.
The company has now completed the First phase of its transformation strategy to become a fully integrated Agro Industrial National champion, it says in a statement.
In addition to this agreement, Union Dicon plc has also disclosed the signing of an agreement to acquire an additional 15,000 Hectares of land in Ebonyi state for the cultivation and processing of Cassava, to Starch.
The value addition in generating starch as BusinessDay earlier reported, can yield as much as N10 trillion based on projections by the Nigeria Cassava Growers Association (NCGA).
“This is a sign of the trust we have in Union Dicon Salt Plc, to participate in the Agricultural Industrialisation of Ebonyi State,” said Bernard Odoh, Secretary to the State Government (SSG) of Ebonyi State, in recognition of the company’s massive investment in cassava cultivation in the state.
On his part, Chuka Mordi, CEO of Union Dicon Salt Plc, remarked; “The Governor of Ebonyi State, David Umahi was crucial in concluding this transaction, and his visionary outlook for the development of his state, has driven this process. We believe that the 15,000 Hectares, added to our existing operations, will enable us develop the leading Cassava and Starch operation in West Africa.”
The transaction, the company asserts, will ensure security of feedstock supply, as UDS Plc establishes its Cassava processing facilities in Ebonyi, Edo and Delta State. It will also fulfill its management’s commitment to become cash flow positive before the end of 2016.
Union Dicon Salt Plc which operates in the Nigerian Consumer Goods Sector, has been diversifying into the Agro Industrial Sector, with an initial concentration of Cassava, and Starch processing.
The company has also finalised agreement with GEA Westfalia of Germany to build the largest industrial starch processing facility in Nigeria.
“Cassava has some major industrial products among which are ethanol, industrial starch, cassava flour, glucose syrup, sweetener etc. These products are also raw materials to numerous industrial items with limitless domestic and export market potential. This means cassava can trigger a massive industrial revolution in Nigeria to the extent that every Nigerian village will have viable cassava industries,” says Nigeria Cassava Growers Association (NCGA).
NCGA also suggests that, “If 5 million hectares is devoted to the production of industrial cassava from the over 84 million hectares arable land available in Nigeria, and we are able to reap 40 MT of cassava from an hectare of farmland, it implies that we will have 200,000,000 MT per year. The above 200 million MT of raw cassava can be milled into 50 million MT of industrial starch. At present, industrial starch sells for over N200, 000 per ton which means we can generate 10 trillion Naira yearly from cassava,” NCGA projects.
Union Dicon’s foray into the cassava cultivation industry on a large scale, sets the pace for many companies to emulate in tapping into the endless opportunities available in the cassava value chain.
With its present projections, the NCGA believes Nigeria can have a more balanced trade with China as the world’s second largest economy has huge market potential for Nigerian cassava.
“As against the current cassava chips, which is nothing but dewatered cassava reminiscent of crude oil which Nigeria exports only to buy back as refined oil in the spirit of slave mentality, we should at this time ensure that the complete value is added to the cassava to make ethanol, industrial starch etc right here in Nigeria. This will also guarantee that the Job opportunities in cassava processing are not exported with the chips,” says NCGA.
CALEB OJEWALE
