Sadiq Falau just turned 31, but he is building a N2.5 billion investment in rice production and processing in Nigeria’s northwestern region.
Falau is a young man with a mission to establish Kaduna’s largest rice mill. He is already positioned to achieve this dream before the end of the year.
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The entrepreneur has all the right things going for him — he is young, smart, a risk taker and has the business acumen to succeed. He keeps trying, he says, until he achieves the expected outcome.
He comes across as someone who sees opportunities where others see a complex situation, and that is why he said the COVID-19 pandemic, though tragic, had a silver lining.
COVID-19 exposed Falalu to the realisation that he was indeed in the right business. “No matter what you do, even in war, people must eat,” he said, but also explained that his rice production business, like others, had been bruised through sales due to strict ban in movement, which affected deliveries.
FaLGates, Falalu’s company, was coined by his father, who merged the name Falalu with Gates to imitate a one-time world’s richest man, Bill Gates.
“My father coined the name and I stole it, but I always credit it to him,” he said while narrating how he made his first N1 million with FaLGates during his National Youth Service Corps (NYSC) programme in 2011.
From Kano to Kebbi, and even remote parts of Niger State, Falalu has traversed almost every part of Nigeria that owns a rice mill in the last five years. His mission has been clear from the beginning — he needed to learn as much as possible to possess the knowledge of how to run a successful rice production and processing enterprise, and at the same time, avoid the pitfalls made by others.
With his mother’s contribution of about N8 million, an integrated rice processing mill purchased from China and a temporary space made available to him, Falalu set up his first mill in the Kakuri area in Kaduna.
His machine, though small at the time, was the biggest milling machine in Kaduna, with a capacity of one tone per hour. Shortly, production started and his main brand; FaLRice was in 2017 introduced into the Nigerian rice market.
“I was advised to apply for a loan from the state government; and they gave us a land in 2016,” he said.
It is on that land that Sadiq Falalu’s N2.5 billion investment now rests. However, before his life as a seasoned entrepreneur in agro-business, Falalu was not so sure what to do after his youth service. His parents were eager for him to get a job and settle down, so he felt the best way was to return to school to buy time while thinking of the next phase.
“I got into a short course in Harvard and it was an opportunity for me to move away from Nigeria and the pressure of finding a job. From America, I got a window opportunity to move to China, with the intention of getting a PhD. I felt like China had so much to offer,” he said, reminiscing on his tendency to take risks.
While in China, he taught English Language, had a second master’s degree in Innovation Management and Entrepreneurship and traversed the country via train for a year. He was impressed by China’s giant strides in agricultural development and a passive childhood dream of becoming a farmer began to manifest.
His timing was apt as President Muhammadu Buhari had just come into power and the Nigerian government had set out a blueprint that would revolutionise the agricultural sector. The aim was to change Nigeria from an import-dependent country to a producing one by specifically ensuring that the country grows what it eats.
It was based on this that FaLGates seized the opportunity to dive into the largely untapped Nigerian rice market.
“The best part is that the market is big; we have between seven and eight million people in Kaduna alone and in the whole country, it is about 200 million. We are consuming seven million metric tons of rice per annum. We are eating rice every day and the rice market is about N2.3trillion or more. We are barely satisfying half of it, the other half is coming from outside the country,” he said.
Rice is one of Nigeria’s major staple foods and is consumed across all geo-political zones and socioeconomic classes in the country. According to the United Nations Food and Agriculture Organisation (FOA), Nigeria is Africa’s leading consumer of rice, one of the continent’s largest producers, at the same time, one of the largest rice importers in the world. It is this opportunity that Falalu, with his small plant, a staff strength of eight, which he could barely pay, tapped from when he introduced FaLRice into the Nigerian market. Focusing on quality and pegging a price slightly lower than most other brands, he won lots of loyal customers, who according to him, are still loyal.
“I still have some customers that call me to buy rice and I deliver it myself. It is not my position to deliver rice to them as the chief promoter of the company, but I have very good relationship with them because they trusted us when we started small,” he said.
Although the flagship brand, FaLRice, was withdrawn from the market about two years ago, Falalu says this is to make way for a re-launch once the new plant is installed and commissioned before the end of the year. He, however, said as soon as the new mill began operation, the company intended to have control of production and ensure the quality of rice is not just good but premium.
To the average Nigerian, Falalu seems to be making waves in the agro-business sector, but the 31-year-old didn’t get here in one night.
“It was a gradual process, which came with a lot of hurdles. There have been challenges along the way. At some point I was sleeping in the factory and couldn’t afford to pay my staff. A few years after we started, we were asked to vacate the plant in Kakuri. We had to dismantle out machines, but Alhamdulillah, we now have a plant in Mando, where we refine rice,” he told Daily Trust on Sunday.
Inside the new factory
With a capacity of over 250 tonnes per day, the new factory in Rigachikun in Igabi Local Government Area of Kaduna State, will become the largest rice mill in Kaduna.
“We raised the fund through equity, but we got debt financing early this year,” said Falalu, who explained that before workers moved to site, the area had been a bare land given to FaLGates by the Kaduna State Government in 2016.
“We took our time to grow the business, then invested on the new site. So, whatever profit we made from the business went into the new factory, and that took careful planning of five years.
“We are going to have a warehouse for our paddy rice, as well as fertiliser plant. But we need more land for what we intend to do. We have purchased additional land behind for the fertiliser plant, we are going to be buying rice, like the type produced in Kura, Kano State, because the quality of their processing is poor. So, we will refine, de-stone, clean, polish, sort, grade and repackage it. This will make a different brand, and we will call it Zowabiya, from the popular Wazobiya,” he said.
As he awaits the delivery and installation of his machines from India, he said FaLGates would also continue to produce rice seedlings.
At the new factory, an administrative block and apartments where Falalu has made provision for students on internship is completed.
“We are bringing three expatriates and we are going to keep them for a maximum of one year. Each expatriate is going to have one person understudy him and work hand-in-hand with him. Only sleep will separate them. The expatriate will have a room upstairs and, so will the one who is understudying him. By the time he learns from him, the expatriate can return to his country and the person can take over,” he said.
Challenges and prospects
Building a N2.5 billion investment in Kaduna comes with peculiar challenges in the area of security, but Falalu is a risk taker. He said concrete security arrangement had been put in place.
“I think the problem of security is a matter of time; it will come and go, just like armed robbery. I don’t see the insecurity as a threat, but maybe it is even an opportunity for us to take risks and invest more,” he said.
According to the businessman, the major challenge at the moment is shipping the machine for the new factory. While Falalu is trying to get the best machines in the business, he is challenged by very high cost of shipment and difficulty in establishing a letter of credit.
“We have naira for the machines, but we don’t have dollars because the bidding from the Central Bank of Nigeria (CBN) takes place every two weeks; but Alhamdulillah, we have been getting some,” he said.
Rice smuggling and importation has become Nigeria’s biggest enemy in recent years, but Falalu said there had been a big shift from perception that good rice comes from Thailand and India.
“Our people are gradually appreciating our own locally made rice. Today, I can give you rice in less than four months in your plate.”
“I will plant it in less than 90 days or 120 at maximum, I will bring it to my factory and process it in two days and take to wholesaler in one week. In less than four months or less you will get fresh rice; so you can’t compare it with the one imported, which they keep for a year or two before they ship, then take between six months to one year to smuggle,” he added.
He, however, said in order to make local rice more affordable and control the price, there was the need to invest more in backward integration.
“We have a lot of people going into processing, but little in farming. If we have more supply to millers, the price of rice will go down,” he further said.
This is why he said FaLGates was investing heavily in farming and is in talks with the state government for a farmland around Kaduna’s Kangimi dam, less than 10 kilometers from the mill.
He continued, “We will harvest and just bring it to the mill. The best thing is to have your mill in the farm, but since we have already invested in this place, it will be smart to get a farm close so that transportation won’t be a hindrance. If it goes well, we wouldn’t mind moving to the farm. It will cost more, but we can do our second phase of expansion.”