We have moral obligation to revive Nigeria’s textile sector -WACOT MD
Mr. Ujwalkanta Senapati, Managing Director of West African Cotton Company (WACOT) Ltd, has worked for over 10 years in eastern and southern Africa. In this interview with Daily Trust at the just concluded AgrikExpo and Conference in Abuja, he expresses co
Could you briefly tell us about WACOT’s operations in Nigeria?
WACOT is a company which was founded in Nigeria in 1997. We started the company to enter into the cotton value chain but it is no more cotton only now, we have diversified from cotton value chain to all agricultural commodities. Today, it’s one of the top agricultural companies in Nigeria and the journey has been fabulous over the last 20 years.
You recently inaugurated a rice mill in Kebbi State, have you started operations?
The idea is we set the momentum because we invested in rice at the time the country was not going through a very good situation. All of us know about the Nigerian currency depreciating, country not doing well, inflation rising and no foreign direct investment was coming into Nigeria but we had faith and when the economic downturn was there in Nigeria, we were the only company that invested with the mandate from President Muhammadu Buhari, saying that we should eat whatever we produce.
So, with that statement, the company invested money with the faith that agriculture would be the next saviour of this nation, and basically we had faith in the current government and we are getting support that was why we invested in the factory.
Typical factories that take about 24 months to complete in Nigeria, we completed this factory within 15 months. After Mr. President’s assurance towards agriculture, this factory was conceptualised and came into reality within his tenure.
We have put things into action and we have started producing and the rice is readily available for the market. So we are very happy to invest in the agricultural value chain.
What is your company’s relationship with local farmers in Kebbi State?
Typically, what we do in a rice factory means you have to secure your raw materials supply. What we try to do is to encourage farmers to grow more paddy or more rice and they can supply to our factories where we can process and we can supply to the Nigerian populace.
So, we try to support all the state’s rice growing farmers; we try to put them into cooperatives, we try to give them quality inputs which are seeds, fertilisers and chemicals. We train them on best agricultural practices through farmers’ business school and apart from that, we buy back the produce from the farmers. So they get assured of a market and they are very happy and able to grow more paddy.
In Kebbi, our factory can take almost 120,000 tonnes of paddy per annum and today through direct farmers’ production, we are getting about 20,000 tonnes, still a long way to go.
You are also into seed production, what kind of seeds do you have?
Typically in the agricultural sector, seed is a major challenge; if you have quality seed, then your production and productivity can go up by 15% to 20%.
So as pioneers of the agricultural sector in Nigeria, it is our moral duty to try and save the industry in the country. So we contact universities that have breeder seeds and the scientists that produce seeds. We take the breeder seeds and multiply those seeds under our technical supervision and try and make it into certified seeds and from there they go to the farmers.
We try and do the seeds for all the major crops in Nigeria and we feel this is the way to make Nigeria a food secure nation. That is why you see our inclination towards producing maize and paddy: these are the two crops which would be feeding the nation.
Apart from that, we try and produce seeds for cotton which is a cash crop for farmers. We produce sesame and soya bean seeds which are also cash crops for farmers.
Going forward, we would try and venture into vegetable seed production. After we do food crops and cash crops then we would venture into that. We feel it is our moral duty to supply good quality seed to the Nigerian farmers, that’s why we are into seeds business.
It’s more than five years now, we started in 2011. We have been supplying good quality seeds not only to our farmers, but also to other farmers in Nigeria.
When you started, you were mainly into cotton, what is happening to the industry? Are you still that involved with cotton?
Yes. What happen is, you can see the downturn in the textile industry in Nigeria.
In the 70s, Nigeria was booming with lots of textile factories, but over a period of time, I think we need to do more to make the Nigerian textile industry competitive in the global scenario which would take some time.
Over time, if this is not happening, it means we are not able to do the backward integration into cotton which provides the raw material for the textile industries.
Today, the total requirement of Nigeria’s textile industries is 15,000 tonnes to about 20,000 tonnes of cotton lint fibre per annum but the country produces far less now.
Once there is a vibrant economy, cotton can then get a boost and by what we have seen, as champions of cotton, we have started revitalising our programme. This year we have done about 14,000ha of cotton under the cotton revival policy.
We are known as a cotton company, so it is again our moral obligation to the country to revive the sector. We have done almost 10,000ha in Katsina State, about 2,500ha in Gombe State and about 1,500ha in Adamawa State.
After successfully executing this, we’ll be scaling up the 14,000ha to 30,000ha in 2018.
So we are championing the cotton revival in Nigeria. We would try and supply the local industry the raw material, if something is left over after, we don’t have any choice but to export it.
What are the challenges you face as a company?
You see, under this government, agriculture is much focused on and we are very happy about that. We are very happy with the way things are progressing, it would take some time as agriculture is a long term thing that cannot happen suddenly. But the journey has started, two years back. I think in another two-three years it would take us where we would see the benefit of the agriculture initiatives - what government is putting on the ground today.
The major challenge we face in WACOT today is that we are creating and stabilising the database; we don’t have a very good farmer database available in Nigeria.
We got the database from an association but we found that the database was 67% correct and 33% corrupted. Once we develop a very good database, then we’ll go at a faster pace.
The second challenge is not for WACOT but basically the farmers don’t get access to finance. We talk a lot of things, this year at WACOT itself we have taken a N5 billion credit exposure on farmers against all odds.
The general Nigerian farmers we know would definitely pay back, so I convinced my management that let us give N5 billion exposure. WACOT never took more than N300 million but this year we have taken N5 billion exposure.
I convinced the management, I know once they see that we are successful the journey is on.