Unilever’s drives backward integration in partnership with Nigerian farmers

Unilever Nigeria Plc said it would support the Nigerian government’s backward integration policy with its “Partner to Win” initiative to help grow the economy through deepening of the quality of local products in the country.

The Partner to Win initiative is to grow capabilities of intermediary companies to enable them convert farm produce to usable goods that will be sourced by the company as part of its raw materials locally, which the organisation believes will enable it to achieve a significant reduction in the importation of raw materials and grow the economy by working with local partners.

Thomas Mwanza, Unilever West Africa procurement director, said at the Manufacturing and Equipment, Nigerian Raw Materials Expo, that steps taken by the company to achieve this drive are in packaging and agro-based materials. “Already, Unilever has achieved over 90 percent in local sourcing of packaging materials. The aim is to achieve 100 percent by the end of 2019 and overcome the current challenges of local vendor’s capacity to meet up with the global best standard. In the agro-allied sector, Unilever is partnering with intermediary companies, for the supply of cassava and starch.”

Providing the motivation for this decision, Thomas said, “the backward integration programme of the Federal Government is a sound policy and as an organisation we are committed to this initiative. We have found strong connections between this policy and our business model. This has spurred us to enhance our local sourcing capabilities that we have embarked on for about a decade.”

“By working with the intermediary companies to source these materials, we are contributing to up-scaling the technical skills required for sustainable commercial farming in Nigeria. We are also investing in the production of palm oil for use in Blue Band and soaps, and exploring local production of herbs and spice for our seasoning cubes. We believe that our partnership with these investors will not only create jobs within the agriculture sector but also provide support that will enhance their technical know-how and skills,” Thomas said.

The ability of the local suppliers to meet international standards for such materials and the possibility of locally produced goods being more expensive than imported goods are key challenges the company is facing. However, this is not a deterrent factor but an opportunity to help them scale up their skills and compete at the international level, he said, adding that: “Our motivation and commitment to operate sustainably is far superior to these challenges. We are working with relevant authorities and local investors to ensure their produce meet the required standard for our products.”

It would be recalled that the Federal Government of Nigeria designed the backward integration policy to deepen the economy and achieve robust growth. As it currently stands, imports are still the dominant source of inputs into food, beverages and tobacco in Nigeria, accounting for more than 70 percent of all raw materials. The Economic Recovery and Growth Plan (ERGP) blueprint anticipates a strong backward-integration led growth in the agro-processing, food and manufacturing sector.