Boosted Raw Material Sourcing in Nigeria: A Closer Look

The recent initiatives of Nestle, in Nigeria and other African nations, are increasing the sourcing of indigenous raw materials like starch and turmeric. This approach could aid in helping minimize the sector’s problematic vulnerability to foreign exchange.

The pressure on foreign reserves and the resulting currency instability in many African countries due to growing debt has made it increasingly difficult and expensive to buy inputs. For example, Nigeria’s central bank permitted the naira to decline by as much as 36% on the official market last June 2023.

In order to address these issues, Nestle is moving forward with plans to repla ce imported maize starch in Nigeria with cassava starch while also assisting local suppliers in expanding their capacities and satisfying the company’s supply requirements. Cote d’Ivoire, Cameroon, and Senegal are among the nations in Africa where Nestle intends to expand its localization efforts.

Nigeria is one of the leading global suppliers of cassava, and in recent years, the cassava starch sector has been steadily growing. The cassava starch business in Nigeria has a promising future due to a number of variables.

For the growth of cassava, Nigeria has an ideal climate and sufficient soil. Since it is widely grown, cassava serves as the nation’s main food crop and the cassava starch sector benefits from a consistent and dependable supply of raw materials.

Nigeria’s ability to produce cassava starch has also expanded as a result of the construction of new facilities and processing plants. The country can now manufacture cassava starch of greater quality and serve both domestic and foreign markets thanks to this increase in processing capacity.

Nestle is also actively pursuing the establishment of regional vendors for the fruits, vegetables, and seasonings that go into its goods, such as turmeric powder in Nigeria and Senegal and onion powder in Nigeria and Senegal.

The cultivation of onions and turmeric is supported by the favorable agroclimatic conditions in Nigeria. Onion powder and turmeric are commodities with rising demand on both domestic and international markets. In Nigerian cooking, onion powder is frequently used as a flavoring ingredient, and turmeric is prized for both its culinary and therapeutic benefits. Farmers and business owners have increased their investments in the growing and processing of these spices as a result of the expanding demand.

The efficient movement of raw materials and completed goods, on the other hand, might be hampered by inadequate transportation networks, insufficient storage facilities, and unstable power supplies, which can result in higher prices and possible product deterioration.

In addition, there aren’t many contemporary processing plants that can turn fresh onions and turmeric into powder. This could prevent value addition and reduce the market potential for processed goods.

In order to tackle these challenges, Nestle has put in place intensive training programs to instruct farmers and processors on excellent agricultural methods, harvesting, warehousing, and cleaning practices. Regenerative agriculture, which emphasizes restoring soil health to cut greenhouse gas emissions and improve carbon capture, is another aspect of Nestle’s sustainability journey that is being shared with farmers.