PRIVATE SECTOR

ECONOMY

AGRICULTURE

Elumelus Success with Teragro

OkonjoIweala on fiscal prudence

Adesina on the bumper harvest

PM Review
Vol. 1 No. 1 May 2012

PERFORMANCE MANAGEMENT REVIEW

A publication by the Office of the Special Adviser to the President on Performance Monitoring and Evaluation

Transforming Nigeria
BUILDING INSTITUTIONS

MAIDEN EDITION

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interview

Teragro goes to Benue

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Teragro goes to Benue

PRIVATE SECTOR ECONOMY AGRICULTURE

Elumelus Success with Teragro

OkonjoIweala on fiscal prudence

Adesina on the bumper harvest

A government/private partnership brings a fruits concentrate factory to Makurdi

PM Review
Vol. 1 No. 1 May 2012

PERFORMANCE MANAGEMENT REVIEW

A publication by the Office of the Special Adviser to the President on Performance Monitoring and Evaluation

Publisher Prof. Sylvester Monye, MFR Editor Chuks Iloegbunam

Contributing Editors JeNika Mukoro Lola Okusami Writer Oyintarela Umeri Editorial Assistant Akachukwu Okeke Creative Director Victor Ehikhamenor Graphic Designer Abiodun Olukoya Photographer Rah-Jo Ayuba

Transforming Nigeria
BUILDING INSTITUTIONS

Budgeting for transformation

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4

Rotimi Amaechis quiet revolution

The Coordinating Minister of the Economy and Honourable Minister of Finance tackles the transformation agenda with fiscal prudence

The Governor of Rivers State is putting a new heart in his people through a quiet revolution of achievements

A Message from the President Publishers Note Interview: Okonjo-Iweala Making the NYSC programme more responsive Editorial Into Better Skies Interview: Stella Oduah A new, glorious era for agriculture Interview: Akinwumi Adesina Transforming Benue State The Benue/Transcorp partnership Chidokas road safety campaign Interview: Rotimi Amaechi

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n March 2012, Transnational Corporation of Nigeria (Transcorp) a publicly quoted conglomerate with strategic investments and core interests in the hospitality, agribusiness and energy sectors commissioned the Teragro Fruit Juice Concentrate Plant in collaboration with the Benue State Government in Makurdi. The plant was commissioned by President Goodluck Ebele Jonathan, GCFR. In the interview below, Tony O. Elumelu, MFR, Chairman of Transcorp, discusses the conglomerates foray into agribusiness, Nigerias agriculture value chain and how Transcorp is adding value to the countrys economy.
through the disciplined execution of our business strategies. We have realigned the business focus of the company and have positioned it along three platforms. The first is energy, with our oil block, OPL 281 and our entry into the power sector; the second is hospitality, with the Transcorp Hilton Abuja and Transcorp Metropolitan Calabar hotels

Tony Elumelu MFR, Chairman Transcorp Plc

Managing Consultants 1st October Limited www.1stoctober.com info@1stoctober.com All Correspondence to: The Editor PMR, Office of the Special Adviser to the President on Performance Monitoring & Evaluation, 6th Floor, Federal Secretariat Phase I, Shehu Shagari Way, Abuja. Tel: +234 803 331 0929 Email: editor@performance-monitoring.gov.ng

Making our ports work

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The Ports Reforms Committee is introducing a sense of order in the ports of Lagos and making life much easier for those who are involved in the import/export business

Question: You became Chairman of Transcorp last year; please describe the company under your leadership. TOE: Since the new board, which I chair, took over in September 2011, we have been focused on two major fronts embracing and enthroning the highest levels of global best practices and governance standards in our operations and businesses, and a commitment to growing shareholder value
PERFORMANCE MANAGEMENT REVIEW

as well as our expansion plans across the country; and the third is agribusiness, via our entry into the fruit juice concentrate business. We are beginning to see the benefits of these changes. Transcorp will pay dividends the first since the companys in71

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In the agribusiness sector, we plan to go into rice and cassava processing, and possibly tomato paste production

Question: How will the Teragro Fruit Juice Concentrate Plant benefit Benue State and Nigeria? TOE: Benue State is considered the food basket of the nation. You can also call it the nations fruit basket. As I mentioned earlier, Benue State produces over one million metric tonnes of citrus fruits per annum, mostly produced by small and medium scale growers in the state. By sourcing directly from these small and medium fruit growers, the plant will provide reliable income streams to rural farmers and contribute immensely (meaningfully) to rural economic transformation and job creation. Additionally, by processing domestically grown fruits, thousands of Nigerian fruit producers will enjoy long-term increases in their standards of living, making a contribution to rural economic transformation and job creation. These all tie into my philosophy of Africapitalism the private sectors commitment to the economic transformation of Africa through long term investments that create both economic prosperity and social wealth. The acquisition of Teragro demonstrates Transcorps commitment to the Nigerian market and reflects our confidence in its growth prospects.

ronment for the private sector to thrive. Governor Gabriel Suswam has been an incredible and energetic partner in the journey to commissioning this plant. He visited the site regularly before the commissioning and ensured that the necessary infrastructure was put into place. The Teragro Fruit Juice Concentrate Plant represents optimism it is a project that is seeing the public and private sectors collaborating to fill a huge void in the country in the area of juice concentrate processing creating direct employment and providing economic hope to citizens of the state. ception about seven years ago to our over 300,000 shareholders at the end of this financial year. But beyond paying dividends, we have taken significant actions that have put Transcorp on the right path to sustainable growth. Question: What informed Transcorps entry into agribusiness? TOE: We did a significant amount of research and discovered that agriculture holds huge potential for Transcorp and also for improving the wealth of Nigeria. According to a United States Department of Agriculture (USDA) report, fruit juice consumption in the country has grown by approximately 10 percent every year since 2002. As a result, Nigeria has become a major market for juice and a major importer of juice concentrates, as none was previously produced in the country. The need to im72

port concentrates has resulted in increasing the cost of production for manufacturers and reduced value being created in Nigeria. Now there is another side to this story. Nigeria produces more fruit than we can consume. Benue State alone produces over one million metric tonnes of citrus fruits per annum, mostly produced by small and medium scale growers in the state. However, a significant amount of these fruits waste yearly due to the lack of processing facilities in the agriculture value chain. This is why Transcorp is advancing into this space with the Teragro Fruit Juice Concentrate Plant in Makurdi. The plant is the first orange, mango and pineapple juice concentrate production facility of its kind in the country, with an annual capacity of 26,500 metric tonnes. Our goal is to provide a more cost effective alternative for local fruit juice manufacturers that will also translate into

Nigeria became a major market for juice and a major importer of juice concentrates, as none was previously produced in the country. The need to import concentrates resulted in increasing the cost of production

more affordable fruit juice prices for consumers. We will also create markets for the local farmers thereby encouraging them to grow more and thereby increasing our national productivity. Question: How did the partnership with Benue State come about? TOE: The plant was initially built by Benue State but it was not in operation for many years. After careful analysis and we conducted surveys in different states Transcorp secured a long-term lease to revitalise and operate the plant. The government provided an access road for the industrial estate in which we are located and we consider this an encouragement to investors to come in and set up or manage available factories. This is an example of government creating an enabling enviPERFORMANCE MANAGEMENT REVIEW

Question: How would you describe the acquisition of the Teragro plant and what it means to Transcorp? TOE: We are pleased to have worked with Governor Suswam and Benue State on this project. It is a very significant investment in the agribusiness sector in Nigeria. We look forward to building our relationship with Benue State to support our growth plans in Nigeria, as well the Transcorps planned expansion to other welcoming states in Nigeria. This transaction underlines our faith and hope in the Nigerian economy and its vast potential to attract global investment. In partnership with Benue State, Transcorp identified a unique opportunity to enter the agribusiness market. We continuously strive to identify opportunities that will allow us to achieve optimal results, while contributing effectively to the economy.

Question: Five, 10 years from now, what does Transcorp hope to have achieved? TOE: I am very optimistic about the future of Transcorp. One of our priorities is to create value for our shareholders. In addition to that, we also want to create economic prosperity and
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social wealth in Nigeria. We plan to continue to diversify our revenue stream by advancing into the numerous opportunities that our domestic economy offers. What we have been able to achieve so far underscores the importance of Nigeria as a key destination for African private sector investments. Nigerias high rate of growth relative to other emerging markets has resulted in a growing appetite on the part of foreign investors for exposure to Nigeria. We intend to leverage our business developments to attract further investment into Nigeria. In the energy sector, we are participating in the ongoing power sector privatisation by bidding for one of the assets being sold by the government. Consequently, we are leveraging our recent partnership arrangement with Symbion Power, a US-based energy firm, to provide power in Nigeria. In collaboration with Symbion, Transcorp is bidding for a power plant to Light-Up Africa. We are also looking at opening a fertiliser plant in Delta state because of the huge gas reserve on our oil block asset. Within the hospitality sector, we are expanding our portfolio of hotels across Nigeria. Transcorp Hilton plans to open seven more properties in Nigeria including three in Lagos between now and 2015. We will also expand the Transcorp Hilton Abuja to include conference facilities and a theme park. In the agribusiness sector, we plan to go into rice and cassava processing, and possibly tomato paste production. The success with Teragro has also encouraged Transcorp to extend the companys play in the processing business to other states. By 2013, we are optimistic that we will have made a significant impact in terms of the amount of concentrate that is imported into the country. In five to 10 years time, I believe that Nigerians will be enjoying the payoff employment, foreign exchange conservation, wealth creation from all the hard work that we are putting in now. We look forward to working with all of our partners to fulfill our plans and further grow Transcorp. Successful partnerships will allow us to enter new markets, thereby increasing visibility of Nigerian products nationally and internationally. I am also confident that Transcorps over 300,000 shareholders will be very, very happy.
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Images from the Teragro fruit juice concentrate factory

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