TBY talks to Paul M. Gbededo, Managing Director of Flour Mills of Nigeria (FMN), on the steps being taken in various fields to support the government's diversification ambitions and to provide Nigeria with its food needs.

Paul M. Gbededo
Paul M. Gbededo graduated from Loughborough University of Technology in the UK, and has occupied a series of senior positions in a multitude of FMN companies. Positions include Plant Manager/Director at Golden Fertilizer and GM/Director of Golden Pasta and later Golden Penny Rice.

What role do you play in supporting the government's goal of diversification?

You have to position your company in such a way to be able to withstand whatever shock it gets from the macroeconomic environment. If you say that you are only in processing and your processing is based on imports, then what if you do not have access to foreign exchange? You look at other sources and look inwards to how you can sustain your processing by substituting imports with what is available locally. You can also diversify in another form by looking downstream. In our specific case, you bring in wheat and mill raw material into flour. Then, the flour can be converted into pasta, noodles, biscuits, and confectionaries. Rather than being a producer of intermediate products you can go downstream into other industries. That will help develop an industry and manufacturing system that can withstand the shocks and challenges.

Which crops hold the greatest potential for FMN for the next few years?

We have chosen five Nigerian crops where we believe that Nigeria has a competitive advantage. Nigeria produces about 30-40 million metric tons of cassava annually, and we consume a good percentage of that locally. We are the biggest producers of high-quality cassava flour in Nigeria with a 5,000ha cassava farm located in Shao, Kwara state, which forms the nucleus of the supply chain to our processing plant. Our next investment could be to convert that cassava into starch. Looking at maize, we have the largest mechanized maize farm in the country, located in Niger state, and this is a 10,000ha farm. Each year, we cultivate 4,000-5,000ha of which 2,000-3,000ha is corn, the rest of the balance being soybean. The third crop is soya bean, which is useful in two ways; you extract soya bean oil and what is left is called soya bean cake, which is used in producing poultry feed. The fourth is palm oil and we have a 4,500ha palm oil estate in Edo State, which is producing crude palm oil. We have just acquired another 20,000ha of land from Edo State government to expand this estate. The last area is sugar, and we produce sugar cane on our farms to feed the sugar refinery. Today, the sugar production from within Nigeria is less than 5% of the country's needs and that is why the National Sugar Master Plan came into existence in 2012, with a provision for backward integration that by the year 2020, when Nigeria will be at least 70% self-sufficient in sugar production. Our own sugar estate started three years ago and will be fully developed over the next four years. Sugarcane in Nigeria requires significant expenditure on irrigation, land development, and other supporting infrastructure.

What are the main concerns of the manufacturing industry in the country?

The last time that the Manufacturing Association of Nigeria met with the Vice President we discussed issues such as multiple taxation We have many agencies and their functions tend to overlap; therefore, we want government to look into that. We also discussed the ECOWAS treaty and the European EPA. Some protection is required, even for the ECOWAS sub region where there are some items and industries that are already protected. The government should ensure that we do not just open our borders and allow cheap products into our country that can be manufactured here. We also discussed the issue of foreign exchange, which is the key issue of today. We discussed that we should prioritize and protect the manufacturing industries because many industries are closing down due to a lack of foreign exchange. What the government can do to promote exports is another issue that we discussed. At FMN we export Nigerian crops to Vietnam and offal pellets to Europe.

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