Dangote goes into dairy farming to ensure food security, cut importation cost, create jobs

Aliko Dangote, President, Dangote Group, has been striving ceaselessly conceiving projects that would enable Nigeria save valuable hard currencies on importation, ensure food security and create jobs. From rice to sugar and to tomato, Dangote is now moving into dairy farming and production. Dangote had once pointed out that by 2020, the Nigerian population would […]

Aliko Dangote, President, Dangote Group, has been striving ceaselessly conceiving projects that would enable Nigeria save valuable hard currencies on importation, ensure food security and create jobs. From rice to sugar and to tomato, Dangote is now moving into dairy farming and production.

Dangote had once pointed out that by 2020, the Nigerian population would have risen to between 207 million and 210 million and feared that the people could well go hungry if they didn’t make efforts to grow and process their own foods.

It has been with such a thought that the industrialist has committed himself to large-scale farming and production of food items that would not only serve the consumption needs of the Nigerian people, it would also create jobs for hundreds of thousands of the citizens, as well as save the country loads of valuable hard currencies used in importing food items. “We have been in talks with the Central Bank of Nigeria (CBN) on ways we can add value to our local produce,” he said.

Already, the Dangote Group has invested extensively in rice, sugar and tomato farming, milling and refining. Late May 2017, the Dangote Group disclosed it was invested $10 billion in rice cultivation to boost self-sufficiency in consumption. The Group has over 150,000 hectares of rice projects across Taraba, Edo, Jigawa, Nasarawa, Kogi, Sokoto, Kwara, Kano, Kebbi, Adamawa and Niger states.

Similarly, Dangote has sugar farm projects worth over a billion dollars covering 150,000 hectares in Kogi, Adamawa, Kebbi, Jigawa, Sokoto, Taraba and Kwara states. In Kano State, the Group has built a $20 million tomato processing factory to help stop importation of tomato concentrate from China. The factory can produce 1,200 metric tons of tomato paste per day. Nigeria has been importing about 300,000 tons of tomato paste a year worth $360 million from China.

While consolidating on rice, sugar and tomato farming, Dangote is moving into dairy farming and production as he seeks more ways of ensuring Nigerians don’t go hungry as the population explodes, and equally importantly, of ensuring importation cost is reduced drastically.

The philanthropist once told some students of the Executive Master of Business Administration class of the Lagos Business School who visited the Dangote Petrochemical Refinery that 98 per cent of all dairy products consumed in Nigeria was imported. To him, that was abnormal, saying the country was at the risk of hunger in the next few years if the mass food importation was not checked.

“This is why Dangote Group has planned to develop dairy plants and develop home-grown milk production to reduce importation. We have marked massive dairy production for the next three years. We cannot solve all Nigeria’s problems, but, at least, we can embrace and add value to areas where we have comparative advantage,” he said.

The Dangote dairy initiative will be taking off in 2018, starting with a plan to breed 50,000 cows to produce 500 million litres of milk a year from 2019. The Group Executive Director, Dangote Group, Mr. Edwin Devakumar, said that the company would be investing $800m in dairy production in the next three years.

Research has shown that Nigeria spends about $1.3bn annually on the importation of dairy products. Dangote’s investment and intervention is, therefore, expected to address the situation by providing local production to reduce import cost. With time, it is expected the company would even be exporting to generate foreign exchange for Nigeria.

According to World Health Organisation’s (WHO) estimates, Nigeria needs about 1.5bn litres of milk annually. The United States Department of Agriculture also put Nigeria’s “insufficient” milk import at $225m per year, while pointing out that the country’s dairy market has a potential in excess of $3bn. Dangote is hoping to key into that market to exploit the potential.

Dangote’s initiative would be quite some refreshing news to the Minister of Agriculture, Chief Audu Ogbeh, who once expressed concern that cattle in Saudi Arabia and Brazil produce much more milk than what is produced in Nigeria. The Nigerian cow produces a litre of milk daily, while the Brazilian and Saudi Arabian cow produces an average of 30 litres daily.

Foraminifera Market Research Limited (FMRL) disclosed online that data from the Federal Office of Statistics, the CBN and the Food and Agriculture Organisation indicates that the average Nigerian gets less than two kilogrammes of beef from cattle per year, and that milk production has been nose-diving in the country since 1994.

It regretted that though Nigeria is the largest producer of cow milk in West Africa and the third in Africa, it is a net importer of the product. It emphasised that in order to increase the percentage of the livestock sector and local milk production in Nigeria, therefore, massive investment was required in the dairy industry to meet up with the 1.4bn litres estimated national milk requirement.

“Presently, the local production of milk is less than 1 per cent of the total annual demand that has been estimated at 1.45bn litres, making the total milk consumption in Nigeria less than 10 litres per head, whereas the global average is about 40 litres per head. In other parts of Africa, it is 28 litres per head.

“It has been estimated that about 500,000 cows, and between 300,000 and 400,000 hectares of land are required to meet the national demand of the country,” Foraminifera stated, adding that the recent attempted ban on imported powdered milk in order to encourage local production in Nigeria should be seen as a wake-up call for savvy investors to take advantage of small- scale milk production in the country and tap into the largely import-dependent dairy industry in Nigeria.

Dangote must have been listening to the wake-up call and is poised to take advantage of the possibilities in the industry. But he is not known to do things in half-measures, so rather than engage in it on a small-scale, Nigerians can expect the Dangote Group to be a big player in the dairy industry from the medium to long term