Description

Today, sorghum is cultivated across the world in the warmer climatic areas. It is quantitatively the world’s fifth largest most important cereal grain, after wheat, maize, rice and barley. In Africa, sorghum is still largely a subsistence food crop, but as report will show it is increasingly forming the foundation of successful food and beverage industries in Nigeria.

Nigeria is the second largest producer of sorghum, with the majority of domestic production used for household consumption/fodder. However, since the ban on the importation of malted barley used in the production of beverages, companies have been forced to use sorghum as a raw material and this report seeks to expose the investment opportunity in the supply of the product to local industries in Nigeria through this feasibility report.

A major portion of sorghum grain currently utilized by Nigeria industries {approximately 200,000 MT} is used by the larger beer sector, followed by the non-alcoholic malt beverage sector. Currently, several brands of larger beer with major sorghum content are being marketed.

Historically, malt drink was used as food for children and the sick, but has since become a mainstream beverage consumed by people of all ages. More importantly, malt-based drinks have developed a reputation over the centuries for their nutritional value, a message that is attractive for manufacturers to carry across in today’s climate of increasing health awareness.

Sorghum is increasingly being used as a substitute for more expensive and imported raw materials. The sorghum malting plant in Abia state, which reduces imports of malted barley, points to investor confidence in the continued competitiveness of Nigerian sorghum in the local beverage industry. Aba Malting Plant can currently process 30,000 MT of sorghum and plans to expand capacity to 60,000 MT.

Also the recently established Food Agro and Allied Industries Limited with installed capacity of 60,000 tonnes per annum, 150,000 metric tonnes storage silos and 15,000 tonnes per annum malt extract plant, further deepens the market for sorghum in Nigeria.

There are more than 20 breweries operating in Nigeria with an annual production capacity close to 20 million hectoliters.

The use of sorghum malt was encouraged by a ban on imported barley malt and an economic recession, resulting in a substantial reduction in the sales and production of barley based beer.

The return on investment on the local trading of sorghum is estimated between 10%- 15%.