FTN Cocoa Processors Plc, in the just ended PEARLS Award organised by the Nigerian Stock Market was honoured with the Agric/Agro Allied Sectorial Leadership Award, Akin Laoye, Executive Director of the company spoke with Princewill Ekwujuru on the award and other sundry issues in the agro-allied industry, especially the cocoa sector. Excerpts.
FTN Cocoa Processors won the Sectorial Leader award in the Agric/Agro-Allied sector at the PEARL Awards recently. What do you have to say?
Well, we thank the organisers of the award, and to be honest, we were humbled by the award, because we know the challenges that industries are facing in Nigeria, especially the agro-allied sector. So for anything to have come out of the middle of this difficulties, we are indeed humbled.
How would this award affect the company’s profile and the economy?
It’s bringing a big challenge to our door steps. That means we really need to work hard, because getting to a certain level of an award is not what counts, but to what keep what makes you stay there, in the middle of a lot of difficulties. We believe with God on our sides in the coming year all things working out for good we should be able to come out better a this will affect the rating that people will have about the way FTN is run.
What do you think are the challenges facing the agric industry in Nigeria?
The problems of agric companies in Nigeria are two-fold: One, there is a problem generally with industries in Nigeria, why because, there is infrastructural deficiency, there is little or no infrastructure, most of the companies in Nigeria are being run on their own mini IPP, for example, we run in our own cocoa factory about 2.7 mega watts. That, on its own is distracting and it’s expensive.
Secondly, problem is the fact that, unlike advanced nations government has not prepared itself to be able to accommodate times of bumper harvest and of course a kind of regulate the agricultural sector and government has being doing that I am sure that the problems we have today would not have been there, even for those crops that are short-termed, not to talk of cash crops like cocoa, palm oil, rubber and others that have been basically abandoned over the years.
Does importation and other finished cocoa products affect your operations?
It really affects it and that is why we are of the opinion that government must protect the agricultural sector because if government leaves it open, most of the advanced industrialised nations have gotten to a certain level where they are able to run their companies at a low cost, whereas, here we have high cost, so if you bring in items for example, cocoa powder from other European countries it doesn’t make sense.
A lot of these countries don’t go through power problems, they don’t go through the kind of bottlenecks we go through here, bringing vegetable oil from Malasia doesn’t make sense it will only help kill vegetable oil industry in Nigeria, it also kills the farms by extension if their goods are not selling properly, then if foreign goods are coming in how do we compete and then it affects the taste of Nigeria, there is this madness about foreign goods in Nigeria.
It is for government to put things in the right perspective and run with a sense of purpose.
Do FTN export or does it depend on local market?
We export and also sell within Nigeria and Africa, basically most of our products are exported to Europe and America. Looking at price variables in the market, do you think that the price disparities are right?
Well I think that the prices are right. It could even be better, because when you look at the cost of importation, it attracts some kind of charges, you have to ship into the country by way of freight, you have to insure, it takes a number of days, weeks, if it is coming from a country like America and then you have to look at the caring cost, the clearing at the port by the time you add it up you discover that it makes no sense for any industry to depend on foreign input if you can get it in the country and on top of that you talk about freshness of the item that is being imported, if you produce it locally you can be assured of freshness, take or leave it, some of the products coming from Europe and America have overstayed on water, and then it becomes stale, give or take I believe it is better for those factories, some of them have come to realise that ,but the problem they have is that Nigerian companies facing a lot of challenges ability to deliver some sometime becomes the problem.
I believe your company is not the only cocoa processing company in Nigeria. Do you see any competition with order companies?
I do not think we are competing. We are associates, because the demand of our products is much more in America and Europe, the consumption of chocolate here is as heavy and strong.
I know that cocoa used to be the main stay of Nigeria’s economy. Do you think any time of Nigeria’s life we can still depend on cocoa?
I think we should just go back to it, if you look at the commodities market, you will see that cocoa has the highest price today. If Nigeria were to be serious, Nigeria should have been enjoying from two worlds, enjoying from cocoa and from crude oil.
You could imagine the kind of development that should have come. So, I think that is the two seedlings with short gestation period, two years, two and half years, you grow the tree and you start harvesting. Government hould start developing those cocoa producing regions, it will go along way in helping to solve Nigeria’s problem and expand our economic base.
Do Nigerian companies patronise your product?
Yes they do, Nestle, Promasidor do, these are Nigerian companies. Like I said they are very few. Most of the goods are exported out of the country.
So what does the future hold for the cocoa industry?
I see a great a future.
Especially with the development of the economy. The problem I think Nigerians have is affordability, but I am sure as the economy improves, and purchasing power increases, people will like to take chocolate, it has good medicinal effect. It is good for the heart, we are told it enhances libido, it does a lot of good things that can extend the life expectancy.
In Nigeria, I just read yesterday that the life expectancy of Nigerians is now 47.5, it is possible these whitemen that live 80 years and above may be living longer because they take chocolate, and cocoa products, we have it, but we do not take it and we are shortening our life-span.
What exactly do cocoa industries want the Nigerian government to do for them?
Because of the way we are running, because of the disadvantage we have as a result of infrastructural decay or low infrastructure, government has promised to give export expansion grant to exporters of goods out of Nigeria, they have been following the time on this, and this has been affecting the cocoa industry, the export expansion grant is not a gift, rather it is to cushion the inefficiency in our system, so we expect the government to keep to the promise of the export expansion grant and making sure people who add value and who export and improve Nigeria’s image should be given what is due to them. It is not a gift.
We need government to keep the promise of the export expansion grant. Nigeria has not signed the ATP, EP agreements, what it means, is that we are suffering in Europe whenever our goods get there they tax it, so our profit is reduced.