The Nation | Wednesday, 1st April 2009
By Petchanet Pratruangkrai
Capital Rice and Asia Golden Rice, both in Thailand, recently formed a business alliance with the Stallion Group, Nigeria's largest conglomerate, to supply rice to this major African market.
The next step is to export rice-planting know-how and invest in Nigerian farmland.
Vichai Sriprasert, president of Riceland International, the largest supplier of rice to Nigeria, said Thailand should tap the rice-growing business in Nigeria due to good investment prospects.
Exporters and other investors may consider bringing Thai farmers to work in that country, he said.
However, Vichai pointed out that rice plantations required a relatively large initial investment.
But by planting rice locally, Thai exporters would be able to avoid a high import tariff of 32 per cent now imposed by Nigeria.
Nigeria could also become a Thai-rice production centre for other nearby African markets.
Foreign investors will be allowed full ownership of their projects, which will be entitled to tax privileges for up to five years.
Nigeria is in West Africa on the Gulf of Guinea and covers 923,768 square kilometres, making it twice the size of Thailand. With a population of 149 million, its domestic rice demand includes more than 2 million tonnes imported and another 2 million tonnes grown indigenously.
Nigeria has been Thailand's largest market, with exports growing 260 per cent to 786,716 tonnes last year.
"Rice farming in Nigeria is opening up. Thai investors and farmers with good know-how should enter this market ahead of the competition," said Vichai.
So far, Zimbabwe has been the only investor in rice plantations in Nigeria.
Despite some shortcomings in irrigation and infrastructure, rice plantations could generate high profits in Nigeria.
Areas close to the Niger River are suitable for rice growing. Moreover, the Nigerian government is developing a new irrigation system that will allow self-sufficiency in agricultural investment.
Meanwhile, Thai-Nigerian Chamber of Commerce president Phornchai Hopitakkul said: "Although this market has a high cost of living, with wages as high as Bt1,000 a day, there is less competition and fewer trade barriers in Nigeria, where many industries are opening up to foreign investment."Besides rice plantations, other potential sectors are construction, restaurants, jewellery, auto parts and accessories, garments, textiles, foods and beverages, household items and kitchenware, he said.