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Cardinal Torch Company Limited is making a significant N4.5 billion investment in a new soybean processing facility in Ogun State, Nigeria. This move marks a pivotal moment for the commodities trading firm as it accelerates its transition towards agro-processing and manufacturing.
The investment aligns with the company's broader strategy to extract greater value from agricultural commodities by processing them domestically, rather than predominantly exporting them in their raw state.
Managing Director/CEO, Mr. David Olurin, elaborated on the company's expansion plans in Lagos, stating that the soybean project is a foundational investment in their shift from commodity trading to processing, and ultimately to fast-moving consumer goods (FMCG) manufacturing. He emphasized, 'We are moving from commodities trading into agro-processing and eventually manufacturing. The objective is to ensure that we do not continue to export our agricultural commodities in their raw form while other countries capture the greater value through processing and manufacturing.'
The expansion follows a successful N10 billion fundraising effort through the initial series of its Commercial Paper Programme, which has an overall size of N30 billion. Olurin confirmed the success of the Series 1 issuance, which has provided the company with additional financial leverage for its operations and growth. 'Our Series 1 commercial paper was very successful. We went into the market for ₦10 billion and achieved 100 per cent success. It has given us leverage in the capital market and opened a new chapter for the company,' he noted.
The commercial paper has been listed on the Nigerian Exchange (NGX), a crucial step in Cardinal Torch's capital-market strategy. Olurin commented, 'This commercial paper is already listed on the NGX. We are now in the public space, and that means we have to be even more transparent and accountable as a company.' The company intends to pursue further commercial paper issuances as it outlines its next phase of expansion. Access to capital markets, Olurin added, will become increasingly vital as Cardinal Torch ventures into capital-intensive processing and manufacturing.
The soybean initiative is designed to include facilities for extracting soybean oil and processing various by-products, thereby creating opportunities across the edible oil, animal feed, and food processing sectors. Olurin highlighted that this investment is partly driven by the substantial gap between Nigeria's domestic production and consumption of vegetable oils, presenting a prime opportunity for local processing and import substitution. 'The soybean opportunity is enormous because there is a significant gap between what we produce and what we consume. We want to take advantage of that deficit by processing soybean locally into oil and other products rather than trading only in the raw commodity,' he explained.
Cardinal Torch is also finalizing a 10-ton-per-day cashew processing plant in Ogun State, aimed at converting raw cashew nuts into semi-processed kernels and ready-to-eat products. This cashew investment, Olurin stated, underscores the company's broader goal of retaining more value from Nigerian-produced commodities. 'Nigeria produces significant quantities of agricultural commodities, but we still lose a large part of the value because most of these commodities leave the country in their raw form. Our strategy is to process them here, create jobs here and build products that can compete in international markets,' he asserted. He pointed out that Nigeria produces 280,000 to 300,000 tons of cashew annually, with over 80 percent exported to countries like India and Vietnam for processing. 'Those countries take our raw materials, process them and capture the greater value. We want to change that narrative by bringing processing into Nigeria,' Olurin emphasized.
Beyond cashew and soybean, the company is planning investments in cocoa processing, with proposed production lines for cocoa liquor, cocoa butter, cocoa cake, and cocoa powder, before ultimately moving into chocolate production. Furthermore, Cardinal Torch is targeting the FMCG market with future plans encompassing pasta, spaghetti, noodles, flour, grain milling, and beverages.
Source: The Nation Newspaper