FG Can Earn About $600m Annually From Cocoa Exports if Ikom Processing Plant Starts functioning Fully, Says Agara, Chairman, AA Universals

EXECUTIVE INTERVIEW:

In this interview with JUDEX OKORO in Calabar, the Chairman of AA Universals Agro Company limited, Chief Chris Agara, disclosed that the federal government can earn about $600m annually from cocoa exports if Ikom Cocoa processing plant becomes fully operational.

 Agara, whose firm is the concessionaire of Cross River State Cocoa Processing Plant at Ikom, is partnering with an Israeli partner known as Bean & Co that’s a member of LR Group of Israel.

We assure that our cocoa yield from the farms adopting our protocols and methodology would be 3.5tons per hectare as against the current yield of 400kg per hectare.

According to the industrialist, the firm has a contract grant agreement between the United States of America Government through the United States Trade and Development Agency (USTDA) to carry out a feasibility study and bankable business plan to farm and develop our cocoa and Cassava farms and value chains from farm to table to international standards and best practice for local uses and export purposes.

Excerpts:

State of cocoa industry in Nigeria_ Yes, our company, AA Universals Agro Company limited, in partnership with an Israeli company called Bean and Co which is a member of the LR Group, are totally committed to turning around the cocoa industry in Nigeria, especially in Cross River state. Our foreign partner, is one of the largest agro companies in Israel and they have the technology of improving our cocoa farm yields from less than half a ton to 3.5 to 4 tons which we want to introduce to the farmers.

So, you can see we are out for a serious business. We want to regenerate cocoa. As we move on, we will also help the farmers to regenerate their farms to higher and better production. So, if a farmer has been farming and producing less than half a ton of cocoa, we will help them harvest up to 3.5 tons which is far higher and at the end of the day the proceeds will go to the farmers who will earn more and higher income.

A delegation of the Cross River State government led by the Deputy Governor, HE Peter Odey, visited the Israeli company's cocoa farm in Ecuador and can confirm the capacity, competency and credibility of the Israeli firm. AA Universals has a contract with the United States government. So, the grant they gave to us covers cocoa and cassava.

It took us about three years for the US government to x-ray our credibility and competency before entering into the grant agreement with US. We are very determined to make this work and want to make the cocoa and cassava industry a centre of excellence.

It's not only for cocoa, the grant we got from the US includes cassava because cassava is processed into a lot that the US needs. You can get industrial starch, pellets for drugs, cassava flour and even this our fufu is in high demands for Nigerians in the US and Europe. The contract will serve as an opening to Nigeria to deal directly with the United States government on agricultural products particularly cocoa and cassava which is not happening today.

We are restricted and don't ship directly to the United States as we speak so you can make your findings. So, this is a channel. Besides, we can also ship directly to the United States and this will help our balance of trade and our economy.

This is what we have spent so much of energy, time and money to develop. We want to tell you that our partnership with US on cocoa and cassava production in Cross River will certainly yield positive results once our factory at Ikom comes into full operation.

This is because our processing will ensure quality control and quality of our process that is in line with US expectations. This is in line with the principle with trade agreements between US and Africa (AGOA) If our local cocoa farmers in Cross River state can supply cocoa beans to us, we will pay them better.

We are not stopping people from farming we are saying we will pay you better but let this cocoa be processed here. We will even help them regenerate their farms, we are working with partners who are based in Ecuador. In Ecuador, one hectare of cocoa produce about 3.5 tons while in Ikom and Nigeria we only produce 400kg not even up to half a ton. So we want to bring in many things that will cause cocoa revolution and change the lives of the people.

State of Cocoa Processing Plant at Ikom

The reason why cocoa processing industry at Ikom is not working is that we cannot power that place with generator. There is no Direct source of power and if you power it with diesel you will run at a 1000% loss because the cost of production will be too high. That is why we are constructing a renewable energy plant so that we can have our independent power supply while generator can serve as stand by.

So that is why there have been delays. But with all this packaging we are putting together, by the time we take off we can have a very dependent power source. Concessioning it to AA Universals was the right thing because we designed and built it just as we designed and built the rice mill.

We want to get the infrastructure right which is power, water and security. The equipment we have there is just the sanitization and cleaning equipment for the cocoa beans, it does not process the cocoa powder and butter. One good thing about our process is that nothing is wasted.

We work with the farmers by taking the pods from them direct to our processing site. We want to install the second phase to be able to have a full line from there we can start producing chocolate in commercial quantities.

For now, we offtake the cocoa pods direct from the farmers and nothing is wasted.

For instance, the empty Cocos shells are processed into food paste, which is gotten free. This paste is very healthy for human and popular in US and other Western world. Also, the pulp is processed into fruit juice that is very healthy for human consumption. In addition, the processed pulp is a sweetener and used for the production of chocolate.

This prevents the use of sugar for other sweetness that is not healthy for human consumption. As a result, our chocolate will be 100%.

On the issue of traceability concern of our cocoa farming and productions.

Our process will provide the responses to this concern. For instance, our process of taking cocoa pods from the farmers will eliminate the concern of children, who are usually used to crack, dry and ferment cocoa.

This, So, this will be the difference with our process. And because we are buying off the pods, it frees the farmers and their children from taking it for processing-cracking the pods, drying it and packaging it for buyers.

This is also in line with what the international community expects in terms of child labour. The international community is aware that most of these cocoa farm owners use their children for this purpose, which prevents them from going to school.

So, we are going to take away all that from the farmers because nothing from our own process is wasted.

On starting the second phase

The first line is functional and we have to test run it but we are running it by generator which has a huge cost. So, we are integrating the second phase into our plants because we want to use independent renewable energy to run our entire process.

When completed the second phase will offtake cocoa from the farmers directly and this will save the farmers the stress and the labour of having to use women and children to crack their cocoa pods and do their drying and whatever.

With this, we would have eliminated the international concern of child labour so that they can go to school and not be used to do cocoa pod-breaking and overseeing the drying process considering the fact that cocoa quality is determined by the fermentation process.

So, we are going to undertake the process so as to retain the organic nature of the cocoa.

Need for collaboration with state and federal government

Cocoa is the second highest export earner for the country.

We can also tell you that all things being equal, the federal government will make between $400 and $600m annually from our process. So, we need FG support.

Even the crude oil that we produce, the federal government supports the cost of production. We expect the federal government to collaborate with us, because at the end of the day, we are going to sell our cocoa at a higher and international price that never fluctuates. With that, the federal government is going to earn foreign exchange from there.

The federal government should support us because this funding we are trying to raise is from the International Finance Institute. So, we need guarantees from the federal government to raise this funding.

We also need guarantees from the state government through a policy to ensure that Cross River State cocoa is processed in Cross River because most of our cocoa is taken away by these merchants out of the state.

One of the disadvantages of this is that the data for Cross River state cocoa is never recorded for Cross River. In other words, what is recorded internationally is that that cocoa comes from those locations But when we do ours in Cross River, everything will be recorded for us.

 Therefore, if there are grants and support for farmers like chemicals and fertiliser from the international community, it should come to Cross River farmers because the data is recorded for Cross River. These are the things that our people don't know or they know and are underplaying it.

On the Minister of industry’s visit

 The Minister of state for industry, Sen. John Owan Eno, just visited the cocoa processing plant at Ikom and what the minister said is that it will be better for Cross River cocoa to be processed here. That's why the Minister is preaching value addition which is what we want to do. This will enable us track the data for our cocoa and get better benefit and value for our cocoa.

Note that the international price for cocoa butter or processed cocoa to butter is far higher than the price of cocoa beans. So, what we are planning to do will be in line with what the minister is advocating. And I say that within the next one year, a processing line will be there and will be installed.