Aliko Dangote’s 1,200-tonne a day plant is producing at 20% of capacity because farmers don’t have enough resources to boost acreage. The factory was meant to reverse Nigeria’s dependence on imports of tomato paste from China and increase local production. But by 2017, the company had to idle the plant after pests destroyed vast swathes of the crop. It took another two years — and a resolution of a dispute over payment to farmers — for the factory to resume output.
“We haven’t been able to process enough quantity of tomato to make our operations successful,” said Abdulkarim Kaita, MD of the Dangote Tomato Processing Plant. “At the moment, we are counting losses.” The crisis at Dangote’s tomato plant is emblematic of the challenges faced by many businesses in Africa’s biggest economy. While tomato farming employs about 200,000 people, banks balk at lending to farmers despite President Muhammadu Buhari’s focus on boosting local production.
To boost the crop, the factory is providing farmers with improved seedlings and encouraging more people to cultivate the product. The move has helped increase the number of farmers to 6,000 from 1,000 in the last harvest season, but supply still was just enough to meet 20% of the factory’s capacity, Kaita said.
Each farmer can produce at least 40 tonnes per hectare. The company is planning to create farming clusters next harvest season and is relying on a proposal by the central bank to provide credit to farmers to boost output.
SOURCE: BUSINESS DAY