Dangote rice as new face of industry

Managing Director of Dangote Rice Limited Mr. Robert Coleman speaks about an industry that is booming while the sector is generally in doldrums.

The ground breaking for Dangote Rice mill was done in Jigawa State recently. Why did the Dangote Group go into rice production?

Dangote Group signed a Memorandum of Understanding with the federal government under the immediate past government. We agreed to produce process and market one million tons of rice in the country. Presently, Nigeria consumes around 8 million tons of rice per annum made up of both local and foreign rice. So, Dangote Rice has since 2014 tried to develop our rice production in the North and middle belt regions. We are looking at growing two crops a year, producing from our own commercial farms, although this is looking quite challenging because obtaining large tracts of suitable farmland is difficult due to the huge rural population and massive social issues caused with relocating people. To negotiate to get our own land will take a lot of time so our focus right now is the local farmers organized into an efficient rice out-grower schemes.

Dangote’s initial focus is in the main rice growing states of Jigawa, Kano, Niger, Zamfara, Kebbi, Sokoto and Nasarawa in our first phase. In each of these states we are putting in place a large fully integrated mill with drying, hulling, parboiling machinery with silos capable of storing 6 months of paddy including their own power plants. Last year Dangote Rice purchased six large mills with capacity to process 160 tons of paddy per day. For raw material we are focusing on the out-growers, the local farmers to feed these mills 100 per cent. To supply these mills we will need to grow 150,000 hectares of land of rice twice a year.

So, in one year we will need 300,000 hectares of rice cultivated annually. The average size farm in Northern Nigeria is about half a hectare, so we are dealing with 300,000 farmers and their families that work with them. One man and family can look after a hectare. What we are doing is that our out-growers are supplied with high quality seeds sourced from Brazil (genetic potential of about 10 to 11 tons per hectare) with good suitable fertilizer and good quality agro chemicals, irrigation water and bags and a guaranteed off take agreement at market related prices.

We also give our farmers good agriculture practice training or GAP. We also give basic business skills such as how to open bank account, savings and manage a small business. These efforts are beginning to yield results. In the North, initially we saw yields of an average of two tons a season per hectare and we believe this can be doubled or tripled within a year by teaching them things that they are already aware of but yet to put them market demand for rice over the next five years.

What is the cost of the project?

It will be well in excess of $1 billion when everything is running. We are also into tomato paste, soya beans project, all in excess of over $3.5 billion on completion. We also have youth empowerment program currently running in Kogi, Kaduna, Ondo, Oyo states and tomato paste project in Katsina State. We are buying three tomato paste plants; the first is in Katsina while we are looking for land for the remaining two. We cannot outsource our tomatoes and we will have to grow them by ourselves. We will need a lot of irrigation.

How much stipend is paid to each young farmer?

The stipend we are paying to each young farmer is enough to feed and house them and move them to farm. In Kogi State, we have 50 youths working on 50 hectares and we still have to bring in people during the harvest to help out.

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How do you materials?

for the raw

We managed to get seeds imported from Brazil, quality high yielding seeds with fertilizer and other chemicals. Herbicides come from prominent companies in Nigeria.

How do you power these projects?

Jigawa project for instance has power plant sufficient to power all the equipment for irrigation and plant as well as for office use.

What is the target employment?

Dangote Rice will indirectly and directly employ a lot of people. So far, we have got 150,000 hectares of land being cultivated and indirectly, creating jobs for 300,000 farmers. Each of our Rice mills is expected to employ between 400 to 600 people. This is aside from office staff, logistics. In all, we are looking at up to 350,000 employed people in Dangote Rice by 2019.

At what price do we expect Dangote rice to be selling in the market?

I cannot tell now but we will sell at market price. We cannot grow for a loss because we are a profit driven company. My role as the head of the company is to create opportunity for profit. What is important now for our country is to have self-sufficiency in rice and other basic food products and have import substitution and I believe Dangote is creating the major thrust of this recent agricultural revolution in Nigeria.

Are you extending the paste project to other states?

tomato

Nigeria consumes 300,000 to 400,000 tons of tomato paste annually and most of it is imported. So, we are putting three projects together and we hope from each of these projects we get 50,000 and 60,000 tons of tomato paste. Roughly we should be producing one third of what Nigeria consumes per year under our first phase.