‘African food change narrative’: Man reveals why exporting palm oil hurts Nigeria’s economy, and the cancer that adulteration causes

Ikechukwu Kingsley in their showroom near Port Harcourt, says right grade of palm oil very important to health

… I founded a palm oil processing company after cancer killed my father – Ikechukwu Kingsley of KR Foods

…Environmental scientist now in oil palm valuechain, discovers how to export waste water from palm oil

Any drop of palm oil exported from Nigeria hurts the economy. This is said to be because Nigeria has to import it back to meet local consumption demands especially industrial requirements. This is the revelation of a young man who went into oil palm production business after he lost his father to cancer caused by adulterated foods, especially palm oil.

Ikechukwu Kingsley is the co-founder of KR Foods, who says his passion is telling the African food change narrative.

In an exclusive interview in Port Harcourt at an export hindrances workshop by the Port Harcourt Chamber of Commerce, Industry, Mines, and Agriculture (PHCCIMA), Kingsley said: “We are an indigenous palm oil processing company and we run an integrated operation across the Palm Oil value chain. I’ve been in the business now for over 10 years.

“Now for me, I am a value chain ambassador with the African Food Change Makers where we tell authentic African stories about the Nigerian food and African food value chains. Africa has the capacity to feed the world, but what are we doing in that regard? Then, you know, transitioning that conversation now into the export potentials for Nigeria, we want to start looking at the ‘One-State-One-Product’ initiative.

Challenges:

Okay, so the first is that the value chain is very fragmented. Also, there’s a lot of volatility across pricing. Well, of course, there’s the issue of seasonality, which is a natural factor, right?

Unenlightened players:

But aside the fact that prices swing up and down during those seasons and off seasons, most of the other things we noticed include the fact that the major players in the space are not really enlightened. That kind of stifles growth and innovation within the system.

“So, part of our work revolves around supporting smallholder farmers to also improve their capacity, and to improve their productivity and efficiency. There has been a significant resistance to change from some of them, even when we try to say, okay, let us try new practices, whether local innovations that can help to either improve the yield of their operations or improve the efficiency in terms of how quickly they get their operations done.

“So we still struggle with those things, before you can now get into the main subject of access to funding which is also a big problem.

You want to also look at the issue of access to funding. You look at the cost of funds in Nigeria today which is not supportive to agribusinesses, generally speaking.”

He gave what he called exact context, Kingsley said Nigerian palm oil is not competitively priced against global markets. “Nigerian palm oil is very expensive compared to other products from Malaysia and Indonesia.

“It’s like that because the cost of operations is very high here, especially due to lack of access to power. So, where we operate from, we’ve not had power for the past five years. So, it’s just recently that there has been an intervention by the government of Abia State. Our processing facility is domiciled in Abia State. So most recently they are trying to restore power after five years. So, the cost of running diesel and all that, labour costs, etc. Availability of quality talent is also a problem.

“Now, we are solving that problem by engaging National Youth Service Corp (NYSC) members. Our establishment has been able to absorb eight Corp members to date and we are still open to more. It’s a two-part thing. First, it helps us to upskill them, to prepare them for industry. And it also serves as an entry for young people, enlightened minds to come into the value chain because most of them before coming into the value chain see it as a dirty business. When we now expose them to all of the opportunities present; content creation, developer, accountant, and an operations person, they now see beyond the dirty job aspect. All of these talents find application in the space which was not originally so.”

The other challenge, he said, sustainability issues. “I have a background in environmental chemistry, so I have that consciousness to pollution and there’s a lot of pollution in the palm oil industry. For every one ton of palm oil you produce, there’s about 4.5 tons of waste generated. Waste, incidentally, is indiscriminately disposed into the environment.”

Read also: Nigeria’s palm oil revival: Quiet success, deeper reform needed

Initiative for waste management:

His narration: Now, we are launching a new initiative called the ‘Waste to Value Project’ where we now harness value from all these forms of waste; converting kernel shells into briquettes, converting the palm oil miller fluid into methane gas which can be used for cooking, etc. You know, we are still in the pilot phase for that project and we are also open to collaborations with some NGOs, some partners. We are currently having talks with them. I will stop there on that for now.

Why Nigeria cannot export palm oil:

For export, something interesting happened early this year. There was an order that came in from I think the Export Promotion Council for 10,000 metric tonnes of palm oil to China. I was contacted to contribute towards fulfilling that order. Straight up, I told them we could not meet this order; first, we do not have the local capacity yet. If we attempt to meet that order, there are two key challenges, first, there’s quality concern. There’s a lot of quality inconsistency. In Nigeria today we consume about 2.4 million metric tonnes of oil and we only produce about 1.5 million metric tonnes. The rest is imported. Now, if you want to source that and export, there’ll be crisis locally. That will lead to reverting to importing again just to counteract the effect of export. So, that is on one hand, on the other hand, even if we had the capacity to do it, 70% of that local production of 1.5 million metric tonnes is done by local farmers. There’s a lot of quality inconsistency or hygiene issues. So, there’ll be a lot of quality concerns associated with it. My buyers had been towards the other leverageable products. Palm oil is an interesting commodity. It has several other products that are derivable. So, we can play to the areas where we have comparative advantage; how can we convert the waste to value, so things like palm Kernel shell export into places like Poland and Portugal. We are currently having conversations with some partners in those locations to get them unto those markets.

Freighting and piracy costs:

Again, to the challenges, freighting or shipping cost is very high, especially in Rivers State because of piracy charges and all that. But, when we want to ask a question, the reality is, has there been an incident of piracy in our water bodies in recent times? The answer is no. Why do those costs still exist. We’ve had people come with request for up to 5000 metric tonnes of palm kernel shell but we cannot ship because when you add the shipping cost, it is no longer competitive. These are the issues that we hope that conversations like this one we’ve had today can resolve.

The moment we take off Rivers State from that black list, it opens up opportunities for us in this place. There are nine states in the Niger Delta belt. That’s a lot of opportunities, and when you look at it, there’s the marine economy, blue economy, agriculture. These are leverageable areas where we can work.

For us at KR Foods, what we’ve identified is to introduce a cluster model where we provide shared processing facilities to farmers. They don’t need to own these facilities anymore. They just need to bring their palm fruits, we process them for them, provide access to market, etc. It also helps to now start building traceability systems across the value chain, and it starts to defragment it as well. Remember I mentioned earlier that fragmentation is one of the initial things that we noticed.

Cancer: Adulteration is rampant:

Another thing is the issue of palm oil adulteration which is common place. That’s what we are trying to solve. The KR Foods palm oil brand, from a report by the National Agency for Food and Drugs Administration and Control (NAFDAC) there’s an empirical evidence that 80% of products we find in our local markets are adulterated (with Suldan dye). This is one of the major causes of cancer. There are food related causes. There is verifiable data that cancer related deaths result from food. According to the World Health Organisation (WHO), 30% of cancer deaths emanate from food sources. When you look at it, palm oil is a major stake in preparing most delicacies in Nigeria.

Why I founded KR Foods: I lost my dad to cancer

So, that is why we launched the KR Foods. I lost my dad to cancer. So, it inspired me to come in to solve this problem.

So we make quality traceable and affordable palm oil accessible and available in the mass market. Today, we have presence in six cities across Nigeria. We are expanding into the diaspora market as well so there’s a lot I can say about the palm oil value chain.

Recommendations:

I think it goes both ways. There’s a saying that government is never a good driver. But one thing I know that government is good at and should focus on is regulation and policy. But from the private sector side, I also believe that every innovation anywhere in the world is led by the private sector. And that is where we come in. So that synergy between the private sector and the government is what we need to drive export.

When you look at our economy today, the survival and our sovereignty, I think, is largely hinged on our capacity to export. We operate an economic model very similar to that of China. There’s a lot in terms of productivity that are similar to China’s when you look at places like Aba, Onitsha and some parts of Lagos. You then see that we have that productive capacity; whether it’s agro-commodities or even technology.

Then you look at the US, which is a knowledge economy, and then you realise that Nigeria has the potential to become the knowledge economy of Africa. So all of these things are private sector-driven, but we need the policy framework from the government to support it.

Narrowing it down to my niche which is agriculture and palm oil specifically, our contribution would continue to be collaboration and intervention to smallholder farmers because we feel they’ve been disenfranchised for so long and they have also sold a narrative that agriculture is a dirty business.

This has discouraged young people from coming into that system. Now for me, I am a value chain ambassador with the African Food Change Makers where we tell authentic African stories about the Nigerian food and African food value chains. Africa has the capacity to feed the world, but what are we doing in that regard? Then, you know, transitioning that conversation now into the export potentials for Nigeria, we want to start looking at the ‘One-State-One-Product’ initiative. How can we now begin to harness the potentials that it holds? Again, taking palm oil value chain, for instance, according to the south-south and southeastern region, these are the main areas where palm oil is produced. How can we now start to mainstream smallholder farmers in rural communities into wholesale markets and export value chains?

It starts with the model I have introduced with the cluster initiative: they come ad do their processing in a standardized factory. It helps to improve the quality and traceability of the products. It helps to also position them for structured markets, wholesale markets locally and export markets as well. That’s the way I think we can come in.

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