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Chinese company helps Tanzania revitalize cooking oil industry

DATE:2014-11-15       SOURCE:China Daily

Updated: 2014-11-14 12:42


By Zhang Zhouxiang (China Daily Africa)


Jielong Holdings (Tanzania) Ltd processes locally grown cottonseed and produces cooking oil mainly for the Tanzanian market. Zhu Qiwen / China Daily


Chinese company's agricultural processing plant helps country revitalize cooking oil industry.


Tanzania produced $32 million in cooking oil in 2011 but still had to buy 300,000 metric tons of it to meet domestic demand, China's Ministry of Commerce says.


That is an alarming statistic in a country where the cooking oil industry involves more than 3 million farmers and is a key economic sector, and shows how much more must be done to feed the country's population.


But to Qi Jie, an executive director at Jielong Holdings (Tanzania) Ltd, an agricultural processing company, the solution for Tanzania is simple: better farming machinery and better processing plants.


Qi, who has been working in Tanzania for the last two years, said the nation's climate and environment is ideal for plants such as cotton, from which farmers can produce cottonseed oil. But because the scale and quality of production is low, the country is unable to take advantage of their land.


"There are few farming machines and even fewer personnel able to use them," Qi says, "Most of the giant machines here are imported from China and the United States. Tanzanians mainly rely on manual labor."


He says Tanzanian farmers also are unfamiliar with using fertilizers.


"Farming to them means little more than sowing seeds and waiting for the plants to grow," says Qi, adding that agriculture in Tanzania is still a labor-intensive industry.


According to the ministry report, 0.4 hectares of land only produces 600 to 800 kilograms of sunflower seeds annually.


Tanzanian farmers also lack any organizational pathways to sell their crops and instead rely on random sellers, who delegate prices arbitrarily, he says.


Qi says Jielong hopes to change all this with its agricultural technologies. Founded in 2008, Jielong Group processes plants, vegetables and seeds. The group has a net value of 122.6 million yuan ($20 million), of which 54.2 million is fixed assets. Its oil processing plants cover a total of 58,600 square meters in its home province of Jiangsu.


With more than 1,000 farming machines, it can annually produce 2,000 tons of dried vegetable products, 4,000 tons of lint cotton, 20,000 tons of vegetable oil and 50,000 tons of wheat germs. At Jielong's stable of 30,000 farming families, farmers plant and sell crops according to orders placed by the company. The farms are spread over more than 60 million square meters of arable land across China.


Qi first visited Tanzania in 2012 and after seeing the need for its technologies, established an oil processing plant in the country.


"They've got plenty of land for commercial agriculture, but Westerners are tired of the bad living conditions here - that's our opportunity."


The plant processes locally grown cottonseed and produces cooking oil mainly for the Tanzanian market, though it also exports the cottonseed as animal fodder for export to China.


The land on which the plant is situated is uninhabited, wild country. Qi must drive an hour on a sealed road and another half an hour on a dirt road before setting on foot for a kilometer to reach the property.


"Can you imagine, we set up power poles from 20 km away in order to connect to the nearest electricity source?" he laughs. "We laid another 6 km of underground pipes to access the tap water."


With the help of 40 Chinese engineers and more than 200 Tanzanian workers, the factory was completed within a year. It houses a 40,000-sq-meter warehouse and a 6,000-sq-meter factory.


One or two of the Chinese engineers take turns to train Tanzanian workers so they can better understand the company's agricultural technologies.


Hardware is also necessary.


"To compete in a foreign market, you need more advanced technologies," Qi says.


It has imported the latest high-tech processing machines from China. Of the company's $30 million investment in the Tanzanian plant, Qi says a high percentage of the funds have gone to pay for technological devices and machinery.


But the results have been rewarding. Last year, the plant produced more than 10,000 tons of cottonseeds. Qi says he expects about $10 million in profit annually.


The company aims to expand its business to sunflower seeds, another important local crop. If realized, the plan will not only generate more revenue for the company, but also benefit thousands of Tanzanian farmers.


Qi says insufficient infrastructure in Tanzania, notably the lack of a stable power supply, remains a problem. He says sometimes power failures come twice or more a day, making it impossible to produce at a normal pace. He and the company hope they can work with the Tanzanian government to introduce fairer pricing and improve regional infrastructure.


"We are working toward that and we expect everything to be better. We are confident in the commercial potential here and we will help boost that."


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