This will translate to 36,000 tons of milled rice annually at its peak, and will be sold through Olam’s distributors and dealers across Nigeria, where it already has a presence, the company said in a statement yesterday, December 6, 2011.
Commenting on the new project, Rajeev Raina, President of Olam’s rice business, said “Globally, land under rice cultivation has remained stagnant around 150 million ha over the last 30 years. With the growth in population not being accompanied by an increase in the area under cultivation, we have seen a lot of pressure in respect of global rice supplies, with growing countries either banning exports altogether or increasing the support prices of farmers, thereby increasing the selling price of milled rice in the international market.”
He added that while helping the importing countries in their import substitution efforts, Olam’s investment in rice farming and processing in select markets, “would also help us to selectively get integrated in the value-chain, by participating in attractive and higher margin profit pools upstream in rice farming”.
The company’s investment in rice farming in Nigeria comes at a time when the Nigerian government has pledged to raise rice production in the country – said to be among the world’s largest consumers of rice. Nigeria consumes about 5.5 million tons of rice each year, of which 1.9 million tons are imported.
According to Olam, planting will start during the April-June period, its last quarter for 2012 on a 6,000 hectare farm in Nasarawa, one of Nigeria’s main rice growing belts. It says the facility will begin to generate revenue in 2013, and will be fully operational by 2016.
By Edmund Smith-Asante