THE Standards Organisation of Nigeria has given you the MANCAP certificate, what does that mean for your company?
It means we should continue producing our product (Venus Cassava Starch) according to the SON standard, it means we are working in compliance with the standard as specified in the NIS which is brought to bear by SON, that’s what it means for us.
What is your new target for your company following this MANCAP certificate?
What this standard adds to us is an additional challenge that so far so good, but because we aim to be the best in starch production in Nigeria, we have to continue to produce good quality that consumers will appreciate, both in the food industry and other industries that use cassava starch. So it means additional impetus for my team and for us also to continue in our efforts to put Nigerian products in the global map, that is the kind of challenge that we are getting from the MAMCAP certificate.
What is your capacity in starch production?
Right now, we are running on a 25 tons per day cassava starch production, which utilizes between 120 and 150 tons daily of cassava tubers in the production. That is our capacity and if you look at that in terms of money on yearly basis, it will add about N2 billion to the Gross Domestic Product of the country.
About three months ago, we started an expansion programme which is just a mirror image of our current capacity, it is slightly bigger, (a 30 tons per day cassava starch factory) which is directly opposite the current one, and that will take our total capacity in the next two months to 50 tons per day, that will also add maybe about N3 billion to the GDP. In total, from October, this company will be adding close to N5 billion yearly to GDP of Nigeria. That is what we are aiming at, probably because cassava starch production is still at infancy in Nigeria, there are still bigger opportunities in years to come for further expansion to that business.
What are those things you would want government to put in place to enhance cassava starch production?
We are in Ogun State right now. I want the Ogun State government to make cassava plantation around this factory such that we can have commercial cassava cultivation between the local governments that surround this factory because on a daily basics, this factory would be consuming close to 250 tons of cassava tubers every day, and 250 tons is an equivalent of between eight and nine trailers of cassava tubers, that is massive, and even buying at N20,000 per ton at that price, that means this company will be paying N5 million daily to farmers. It is a lot of money, and if you do that for years, you will definitely see that there would be a big transformation in the economy of farmers.
So, one of the things I want Government to do is to use our factory as a nucleus of commercial cassava cultivation around us here. It reduces logistics cost; rather moving cassava from Oyo, Osun, Ondo, Kwara, we can get enough around us here.
Secondly, cassava starch processing factories are rural factories, and in rural areas of Nigeria, there is a lots of infrastructural deficit, especially this factory we are in now now, we don’t have power supply.We are expecting government to assist, we are ready to pay for power but it should be available. Currently, what we do is that we have generators, we use three to four trailers of diesel every month which costs us between N14 million and N20 million monthly. It completely erodes profit, so we also need electricity to run the factory.
We can also talk of rural roads and others, but those two mentioned earlier for me are major cost drivers and can make us more competitive and also generate a lot of employment for the teeming masses of Ogun citizens.
The Federal Government probably will still need to do something for us, we have been asking for import adjustment tax on imported starch that comes into Nigeria, what we are asking government to do is to slagn import duty on imported starch or cassava products imported into the country from 5-10 per cent to 6 per cent, that will make the landing cost of imported starch a little bit higher than what it is now. The landing cost now is about N140,000 to N150,000 per ton, no local cassava starch producer can sell at that price, it is not possible. But if import duty is increased, they would be selling between N200,000 and N210,000 per ton, and that the price that we also sell our locally processed cassava starch, in terms of quality, we are even better than the imported starch but the only disadvantage is the cost of imported starch is lower than that of the locally produced, and it’s because our orders are open, import duty is very low and people come and dump a lot of starch and cassava products in Nigeria.
What is your staff strength and are you planning expansion?
Currently we are 150 direct staff that work in this company and 120 indirect staff, but beyond that, we work with about 300 farmers who are out growers, so in general I can say we impact close to 550 people directly, so with the second factory the number will double, so in two to three months time, the staff strength of this company will directly increase to 300, indirect workers will increase to 240, then our farmers will increase to about 500 or 1000, that will be our strength in the next few months.