By FRANKLIN ALLI
Obinna Ufudo is the President/CEO of Transnational Corporation of Nigeria Plc. In this interview, he explains why Transcorp’s agric subsidiary Teragro Limited, leased Benfruit Concentrate Processing Plant from the state government for 10 years. Excerpts:
When was this project conceived?
This project has two lives. It was built five years ago by the Benue State Government. Last year, we at Transcorp looked at quite a number of agric projects that are lying fallow across the country; when we finished making our analyses, we thought that Benfruit makes a lot of sense and we started working with the State Government and we leased the plant for a ten year period. Over the last one year, what we have tried to do is to renovate the plant and bring it to where it is today.
What happens after 10 years?
After 10 years we are going to continue working with the Benue State Government. They have shown themselves to be very good partner. They have supported us this far and we believe the lease will be renewed but between now and ten years a lot is going to happen. This is the first of its kind. We believe there are huge potentials for fruit processing in this state.
Within a year, transcorp will do a second plant and a third plant as the case may be. Orange and mango juice are just two of the products we are interested in. We are also looking at setting up cassava processing, tomato paste and rice processing plant. So there is quite a large thing we are going to do. Ten years is a short time.
What is the stake of Benue State Government?
The arrangement we had is that this plant was built by the State Government. What transcorp did is to lease it for a period of ten years. Naturally, being good business partners, we felt that after ten years the lease will be renewed.
How much did you pay?
That is confidential information.
What will happen to your investment if there is change in leadership?
Well, the agreement we signed is not within the range of individuals. We don’t expect renege on the agreement.
How much did you invest in the fruit concentrate processing plant?
It’s quite a huge sum of money. It’s close to a billion naira.
Why the Choice of Benue State?
We chose Benue State for a number of reasons. First, transcorp’s choice of the State was because of the Governor’s Public and Private-sector Partnership (PPP) model for attracting investors. The governor put up the plant, provided electricity and tarred the roads up to this industrial layout. All we did was to get the equipment and the workforce and we started production.
This would not have happened without the state government creating the enabling environment. So, we call on other states governors to emulate governor Suswam’s PPP model to attract investments and create employment. Second, if you drive round the state, you will find out that there is large number of orange and mango trees. Out of twelve varieties of oranges in the world, seven are found in Benue.
What market share are you targeting?
Well, right now, we don’t have any competitor. This is the first of its kind in the country. Our plant is 26,500 metric tonnes capacity plant and within the next 2-3 years, we are going to quadruple by building new plants. So we have no competition.
Do you have plans for expansion beyond Benue State?
Absolutely! Benue State is number one for orange and mango but there are other states who also are number one in different things. Our business plan is to collaborate with states as transcorp has a long term view of fostering public private partnership initiative. So states that have the highest value for each product are the ones we will partner with.
In terms of employment generation, what is the number you are looking at?
In the first phase, the plant operates three shifts of eight hours each. In the first three months, we are running 24 hours daily; and direct job is over 100 people.Indirectly we have farmers who are conscious of selling their produce because over 50 percent of their produce get rotten over the years and when they have a source that buys all their produces there is going to be renewed optimism and expansion of their farms. So, we foresee a large number of people going into direct farming of citrus and supplying directly to the plant.