Devakumar Edwin, group executive director, Dangote Industries, speaks to African Farming about how the Dangote fertiliser plant will help improve the ecosystem in the country
Please tell our readers more about the new fertiliser plant - how is construction progressing and when will it be ready?
We can start train one within a space of one month and a half or two months and then move on to train two. The plant is practically completed, however, there is a small gap, since it is a very large fertiliser plant and it will be difficult to commission two trains simultaneously.
We are in the last stretch of completing and testing the gas pipeline before commissioning the plant.
Our intention is to start getting the fertiliser out before the end of the year.
Normally the commissioning time for a fertiliser plant is three months, but while getting the gas plant ready, we had done a lot of pre-commissioning, so the main commissioning will be shorter.
What is the production capacity for the plant?
Three million tonnes per annum of urea, the last stage is to produce ammonia. We use natural gas as the feedstock.
What does the plant mean in terms of job creation and meeting local content requirements?
The direct jobs created in the factory will be a thousand but the number of indirect jobs is going to be huge. It will add 30,000 people to the fleet in the area of transportation for instance, there will be maintenance staff, people in distribution and increased jobs in the farms.
Nigeria imports a lot of agricultural products today. That will reduce with the commissioning of the fertiliser plant and local processing of these products which hitherto were imported. So, that will create lots of jobs in agricultural processing.
Today, the returns that the farmers are getting is not much because the yields are low, but once the fertiliser plants are ready, the yields will improve.
We are also involved in seeds distribution. The farmers are getting seeds from us. For rice production, we had started giving them seeds and pesticides. The yields have increased from three tonnes to six tonnes per hectare, and since the farmers can also now plant twice in a year, they can now do 12 tonnes, leading to increased income. The farmer will get the fertiliser at his doorstep and at the right time.
We are also helping with soil testing, so the farmer is working with the right soil and fertiliser plant. We are not stopping at urea, and are already adding the NPK plant, as well as micronutrients, to reduce the inefficiency in the soil, as this will really help boost farm yields, which means creating a lot of employment for the farmers. With the potential of increased yields, the farmer will employ more hands. With increased yields and processing of the farm products, the employment potentials will be enormous.
What is the local content component of what Dangote is doing?
We are supporting the farmers in a large measure and we have a team of trained agronomists as well as agricultural engineers, who go into the farms to help farmers.
Even for seeds that used to be imported, we have set up a process to obtain them locally - the feedstock, the gas are all obtained locally. We used to just export the feedstock and gas, now we are using them locally and adding value. The feedstock is 100 per cent natural.
Our business model is to obtain our raw materials locally. We are getting out of flour mills, for instance, because the wheat has to be imported. The climate conditions in Nigeria are not suitable for growing wheat.
However, we are involved in sugarcane production as well as rice and tomatoes. Our primary focus is local, so we can add value.
Nigeria depends on imported tomato paste, we will grow the tomatoes, process them and add value. We will work with farmers on rice production, help with the polishing, and help put the product in the global market.
What we are doing is not only in the area of employment but principally in improving the ecosystem and adding value.
Probably it may not be as financially attractive as other businesses, but the employment potential is huge. Today, we are the second-largest employer in the country next to the government, but we plan to do more as the level of employment in agriculture is higher than in manufacturing.
There is high unemployment in the country especially among the youth, and this is an area where we can create massive employment, and help the country stabilise. So our focus in agriculture is on how to grow the economy of the country, not just in employment but adding value.
Do you have any ambitions for expansion beyond West Africa and outside Africa?
Currently, we are focusing within Nigeria because that in itself is a huge challenge. Engaging in agriculture on such a massive scale is a challenge - getting the land, working on irrigation and with the communities.
The investment is also huge - in sugar, rice and tomatoes, it is about US$1.5bn, because it is not just in agriculture - processing plants, irrigation, money in communities and greenhouses. This is excluding the investment in the fertiliser plants, which is around US$2bn.
We want to take one step at a time. The focus is now on Nigeria and when settled, we may be thinking of going elsewhere.
What is your feedback on the African Farming’s Abuja Agribusiness summit where you were the opening keynote speaker?
It was very well organised and quite educating. A project such as the Agribusiness Summit helps create not just awareness but interest among investors, the research institutes, experts in universities, government agencies as well as educated youth to get involved in agriculture.
When we wanted to include sugarcane as a part of our project, we went to many parts of the world to get the best samples of seeds but in the process, we discovered that we have these products in our agricultural research institutes. Almost all the best of the varieties and people should be made aware of these things. This kind of programme is beneficial in spreading such information.