Ag investment in Africa intensifies

Ag investment in Africa intensifies

- Cargill investing $20m to expand feed production. - AGCO investing $100m in manufacturing. - Ohio State leading initiative to train

AFRICA is the new South America. Case in point: For years, U.S. agricultural interests focused on the considerable opportunities in countries such as Brazil and Argentina, with farmers and agribusinesses alike investing significant amounts of capital, time and manpower to stake a claim in a rapidly growing continent.

Those same interests are becoming increasingly aware of the potentially huge and possibly "game-changing" profits to be cultivated on the continent of Africa, the world's second-largest and second-most-populous continent.

Last fall, Cargill chief executive officer Greg Page told Feedstuffs that in order to feed the expected world population in the next 40 years, Africa's landmass and population base must be part of the equation (Feedstuffs, Aug. 13, 2012).

"To feed 9 billion people, and particularly to do it with rainfall-based agriculture, we need to bring Africa into the system -- not as a net importer of food but at least as a continent that can feed its burgeoning population," Page said in an interview.

Cargill announced Dec. 14 that it would invest $20 million to increase its animal nutrition presence in sub-Saharan Africa. As part of that investment, Cargill will build a new premix and base mix facility in Pietermaritzburg, South Africa, expanding its feed production capabilities across the region.

Demonstrating its belief in the importance of African agriculture, Cargill acquired a 75% majority share and managerial control of NuTec Southern Africa, its existing joint venture with integrated South African poultry producer Astral Foods. NuTec's facility in Pietermaritzburg will house the new production plants, and NuTec is now slated to migrate its name and product portfolio to Cargill's Provimi brand.

 

Manufacturing

While Cargill was announcing its plans to heavy up its feed production operations on the continent, Miami, Fla.-based Blumberg Grain was formulating plans to establish a manufacturing hub for grain storage systems in West Africa.

A division of Blumberg Capital Partners, the company said it is evaluating sites in Ghana, Nigeria and Namibia for a hub that will supply the region's crop and food sectors with warehouses and inventory management systems.

Blumberg claims that its grain storage systems greatly reduce post-harvest grain loss while limiting the lead time and start-up costs, which are both of key concern for a fledgling agricultural economy's infrastructure.

Farm equipment giant AGCO, likewise, announced in December that it officially produced its first Massey Ferguson tractor in Algeria. Calling it a "significant step" in a long-term growth strategy in Africa, AGCO president Martin Richenhagen said the company will invest more than $100 million in the continent in the coming years.

AGCO owns 49% of a joint venture it established last year known as the Algerian Tractors Co., which produces Massey Ferguson tractors locally for sale in the Algerian market.

"Africa has tremendous growth potential in the agricultural equipment sector, and our mission is to provide agricultural solutions for African farmers," said Nuradin Osman, AGCO director for Africa and the Middle East. "As Africa's population is set to rise to 2 billion by 2050, the need for mechanization and training, service and support for small- and medium-scale farmers has never been greater."

 

Cultivating expertise

Training those smaller-scale producers is increasingly viewed as a critical first step in unlocking the potential of African agriculture.

Consider Tanzania, a country of 42 million situated on the eastern coast of the continent, where one-third of its citizens live below the poverty line, and four in 10 children suffer from stunted growth due to malnutrition.

By 2050, Tanzania's population is expected to double, and its urban residents will outnumber its rural population. To help combat the high rates of malnutrition and keep pace with growing food demand, the U.S. Agency for International Development (USAID) has targeted Tanzania through its hunger-fighting "Feed the Future" initiative.

In partnership with USAID and five land-grant universities, The Ohio State University is leading a project to improve food security and agricultural productivity by building the capacity of Tanzania's Sokoine University of Agriculture and the country's Ministry of Agriculture, Food Security & Cooperatives.

With eight Tanzanian students currently enrolled in advanced degree programs in Ohio State's College of Food, Agricultural & Environmental Sciences and dozens more studying at other U.S. partner institutions, the project is slated to provide agricultural degrees and training to more than 100 Tanzanian graduate students by 2016.

"Although we will be sending some technical people to Tanzania to provide assistance in the agricultural sector, building their capacity to do agricultural research and teaching through degree training is more sustainable," Mark Erbaugh, director of Ohio State's Office of International Programs in Agriculture, said. "The degree training will stick. It's the gift that keeps on giving, because these students will keep on producing long after this project is over."

Volume:85 Issue:01

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