NIGERIA – The Lagos State government has signed a funding agreement with the Lagos Commodities and Futures Exchange (LCFE) to raise US$ 216M from investors to reinforce the Imota rice mill operations in a bid to exploit its capacity.
Imota mill was commissioned by Nigerian President Muhammadu Buhari early this year as the country pushes toward self-sufficiency in rice production.
The ultra-modern mill, the largest in Africa and third globally has a production capacity of 32 metric tonnes per hour with an overall storage capacity of 40,000 tonnes.
The mill is operated by Wacot Rice Limited, a subsidiary of the investment holding company Tropical General Investment (TGI) Group, and is expected to produce around 2.5 million 50 kg bags of rice per year under the “Eko Rice” brand.
According to Oluwarotimi Fashola, special adviser to the state governor for agriculture and the rice mill initiative, this amount will particularly finance the continuous supply of raw materials for the factory.
He added that the mill has an annual need of more than 240 000 tons of paddy to fully exploit its capacity.
“If we don’t have enough paddy rice which is our raw material, all the equipment and infrastructure we have at Imota will be useless. Thanks to the partnership with Commodities Exchange, we can maintain the flow of paddy to the mill,” explains Mr. Fashola
On his part, Akinsola Akeredolu-Ale, LCFE Managing Director said that the licensed capital market professionals are already working on various financial instruments to strengthen the rice value chain.
He further revealed that Investors are eager to start investing in the mill and other rice-related instruments, adding that the stock market aggregators have already started supplying paddy to the rice mill and some shipments are on their way to the rice mill.
The manager also estimates that 30% of the amount, or 30 billion naira ($64.7 million) will be raised over the next six months.
Rice is one of the most consumed staples in Nigeria with a consumption demand of 7 million metric annually and a per capita consumption of 32kg.
The country produces an average of 5MMT annually and relies on imports to offset the remaining deficit of 2MMT
Therefore, the country hopes that Imota Mill will contribute towards eliminating the importation and smuggling of imported parboiled rice as the country eyes sufficiency in the production of the grain.
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