Despite challenges, Olam reaffirms commitment to local cocoa processing

OLAM Nigeria Limited has reaffirmed its commitment to processing cocoa locally on a larger scale for export despite the challenges involved in the process.

The vice president of Olam, Inderjit Singh, reiterated the commitment while taking questions at the Access Bank Export Trade Forum on non-oil exports in a hybrid event that held today in Lagos.

Singh, who informed that Olam had been processing Nigerian cocoa for 20 years, regretted that there had been serious setbacks in exporting the product.

The Olam boss said energy cost had affected processing the product in the country, compared to what the costs in other regions in the world were.

He also mentioned the payment of  “lots of taxes” to export cocoa powder to Europe, as well as the challenge of pesticide residue, which he said was forcing exporters to reprocess the product before it got to the final consumer.

Singh said, “The major demand for cocoa butter and cocoa powder is from the European market. The powder doesn’t have so much capital demand in Nigeria. It is not demanded here, so you have to export it. While exporting, you have to pay four to six per cent of additional taxes for any product that goes into the Europe market. So it gives you a disadvantage of four to six per cent.

“Second thing, we are having a challenge of pesticide residue on the quality level. Aflatoxin is a big issue. Because of that, the value for Nigerian-based products is relatively low, so if I am doing processing, I need to re-process it in the Europe market and then sell it to the final consumer.”

Nonetheless, Singh said his firm was fully committed to processing cocoa in Nigeria on a large scale.




     

     

    “We are committed to processing the Nigerian cocoa. We are looking at a favourable environment, as well as a key option. When you do processing, it can’t be done on small scale, it doesn’t make sense doing 10,000- 15,000 tones.

    “We feel we need 50,000 tonnes of capacity for processing in Nigeria, which will bring the economy of scale for the industry. Is it available right now? That is a big question mark from our end,” he said.

    Read Also:

    The Nigerian Export Promotion Council (NEPC) trade promotion advisor in Imo, Anthony Ajuruchi, had disclosed that Nigeria exported $500 million worth of cocoa beans in 2021.

    Ajuruchi noted at a sensitisation workshop on global best practices in cocoa production and processing for export held in Owerri in July this year that huge potentials abounded in cocoa products, valued at $12 billion globally.

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