Paul Andrew: Why We Are Investing US$45 Million In Potatoes

Olusegun Paul Andrew is chairman of the Advisory Board of the African Wealth Report (AWR) and African Wealth Briefing. He is also chairman, Luxury World Africa Group- a wealth and luxury think-tank based in Geneva.  But he has new project. In this interview with MoneyIssues, he speaks about his plan for a US$80 million potato project in Nigeria.

I work for BlackPace in the Netherlands and Switzerland. BlackPace is an investment firm. What it has done is to partner with a local brand called Vicampro Group. Vicampro currently owns 7,500 hectares of land in Manchok, Southern Kaduna and Vom in Jos.  The Jos potato farm is 800 hectares fully and privately owned by Vicampro Group and they have planted 220 hectares potatoes and they are increasing that. In Manchok, 6,500 hectare potato farm is being developed as well. We also have a processing plant to be set up in Manchok which is going to be on 5 hectares of land. The processing plant is industrial and is going to be the largest in sub-Saharan Africa with a capacity to produce close to 40 to 60,000 tons per annum of French fries and potato flakes.

The plants will handle local consumption in Nigeria and also export to neighbouring countries as well as other countries within the Sub-Saharan region.

We have arranged the investment plan, and the total cost to put the facility in place is 35million Euros (about 45 million US dollars) which is already signed. The plant is being manufactured by Kiremko. It is one of the largest potato French fries, flakes plant manufacturing firms. So, what they do is that they manufacture the industrial plant and they also support the manufacturing chain by supplying all the technical bits you need in the process.

Vicampro has already started planting the potatoes in readiness for when the plant is set up. It will take one and half years to build. The plant will do five thousand (5,000) kilogrammes of potatoes, French fries a day up to 40 to 60,000 tons per annum as a turnkey project which is what we are looking at; which is ultimate. But in the initial 1st year, beginning from late 2017 to early 2018, we are looking to produce 15 to 20,000 (fifteen to twenty thousand) tons. Why, because you have to get the plant ready to operate to its optimal capacity to do 40-60,000 tons per annum.

Currently, Nigeria imports between 40 and 60,000 tons of potatoes. About 90 to 99 percent of all the French fries consumed in the country are imported from South Africa, Belgium and the Netherlands as well. And I know it is like an annual importation of close to 250 to 300 million dollars which definitely we will save for the government and that also will increase the FX earnings.

Vicampro Farm project will in the long run, inject about 50,000 jobs into the economy and also increase economic activities in the retail end of the economy.

Agriculture was a very serious venture in Nigeria before we discovered oil. The West was known for Cocoa; the North for groundnut; the East for palm oil. That was actually what Nigeria was surviving on until Shell discovered the black gold and we all abandoned agriculture

Yes, people tell me, ah, it is very risky to invest in such massive farm in the North at the moment, the Fulani herdsmen and their cattle could invade the farms, and all that. But what we have done to secure the farm is simple and common sense. We dug about 5-6 feet trench round the farm. It is simple and common sense. Someone suggested we should use electric barbed wires to get the herdsmen pull back, but you know that by the time 10 or more of their cattle plunge and die in the trench, they will be forced to pull back. It is a common sense. We don’t need to preach a gospel to them to understand that. By the way, who would they see to fight; are they coming to fight that they own the land or what? That’s what we have done stretching up to almost 15 to 17 kilometres and it is cost-effective and also of huge benefit to us in the irrigation system.

Well, we harvest four times a year; that means every three months. Whatever is planted is harvested for instance, one is going to be harvested this August.

In Jos, currently we have done close to $20 million (twenty million dollars). Kaduna is going to do, with the processing plant and the farm; we are looking at additional $60 million (sixty million dollars). So, on the whole, we are looking at $80 million (eighty million dollars).

Yes, we have asked the government of Kaduna State to provide a kind of security. The state also will help in the area of power because we have got to tap into the grid. We are in touch with General Electric and they said they have a place in Kaduna, so they are advising on that, including the use of solar system. You know Southern Kaduna is a hot spot; so they have got to reassure us of adequate security and protection for our investment there, and the government has made a commitment in that regard.