Olam to invests $100m in Commercial Rice Production

President Jonathan cutting the tape at the 
inauguration of the Olam rice mill 

OLAM International Limited has unfolded plan to scale up investment in the production of commercial rice to a tune of $100 million (N15.7 billion).

Indeed, Olam’s Managing Director for Africa and Middle East, Venkataramani Srivathsan, during the commissioning of the company’s integrated rice mill by President Goodluck Jonathan, disclosed plans to increase their acreage to 10,000 hectares. “This will bring Olam’s total investment in the integrated farm and milling facility to over N18 billion ($111 million), he said.”

  The farm, at the commencement of rice production in Doma Local council of Nassarawa State in 2011, had invested $72 million into cultivation of 6000 hectares of irrigated and mechanized paddy to provide 36,000 metric tonnes of milled rice yearly for the domestic market.

   The Managing Director said that with 3000 hectares already under cultivation and a further 3,000 hectares on target for 2015, the farm is expected to yield 10mt per hectare, over two yearly crop cycles based on four varieties of high-yield rice, tested in association with the West Africa Rice Development Association”.

  Srivathsam also disclosed that the farm had already engaged the services of 3000 farmers in its outgrower scheme, with a target of engaging 16,000 farmers by 2018 and ultimately 20,000 small holders farms to supply 30 to 40 per cent of the mills capacity.

  He disclosed that the farm employs over 2,500 direct employees and over 6,000 contract workers depending on the season, adding that the farm also provide training in Good Agricultural Practices (GAP).

  Commending the favourable business clime provided by  the federal government, he said the farm demonstrates how large-scale commercial farms could work hand in hand with smallholder farmers to achieve the government’s agricultural transformation agenda and to generate rural prosperity through local processing.

  The Country Head, Olam Nigeria, Mulkul Mathur urged government to use its rice model to kick-start domestic production in a similar manner, so as to unlock the opportunies for businesses and smallholders and also reduce over 1.9 million tonnes of rice Nigeria imports yearly.

  He expressed the company’s pride to have been part of Nigeria’s development of its export chains, noting that the Singapore-headquartered firm was the first to export sesame from Nigeria, and now Nigeria is one of the world’s biggest supplier.

  The Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina noted that the country is driving a rice policy that would turn it away from being a rice importing country to a major rice exporter, adding that Olam commercial rice farm and integrated rice mill would help boost domestic production and milling of international quality grade rice.

“This is a clear demonstration that our approach of taking agriculture as a business, while enabling the private sector to drive growth of the sector, is working”, he noted.

  “We have been able to attract over $1 billion private sector investments into commercial rice farming and processing. I thought that was great enough, until one of our investors expanded their investment in commercial rice farms and milling from $300 million to $1 billion – and that is just one investor”.

   He disclosed that over three million Nigerian farmers use improved seedlings, following the introduction of new rice varieties of Faro 42 and Faro 52.

  Adesina maintained that the government is rapidly expanding Nigeria’s integrated rice mill as small rice mills are expanding rapidly, with an average growth rate of 25 to 40 per cent, saying government has been closing Nigeria’s rice quality gap. 

by Joke Falaju