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Regional investment in oil crop processing in Rwanda

01 October 2012

The launch of an edible oil and animal feed project in Rwanda, as a result of collaboration between the Tanzanian edible oil processing company Mt Meru Group and the Clinton Foundation, is set to see the contracting of ‘an estimated 30,000 local farmers to grow soybeans’. The processing company, Mt Meru Soyco, in association with the Alliance for a Green Revolution in Africa, will provide improved inputs to 20,000 smallholder farmers across Rwanda over the next 3 years, to complement production from its own commercial soy farm. The plant is scheduled to have a ‘crushing capacity of 45,000 tons of oil seeds per annum’, with full capacity being attained in 5 years. According to Mt Meru Soyco, ‘the Project aims to make Rwanda a self- sufficient nation in terms of its consumption of quality edible oil.’

While Mt Meru Soyco has similar operations in Tanzania, Uganda and Zambia, Managing Director Arvind Mital highlighted the uniqueness of the Rwandan initiative, which he described as ‘the embodiment of sustainable public private partnership that benefits the larger community’.

Established by an Indian business man in 1978 as a petrol retailer, Mt Meru began production of edible cooking oil in 1993 with a crushing unit in Arusha, Tanzania. Production now takes place in three locations in Tanzania and one in Uganda, with production set to commence in both Zambia and Rwanda by March 2013.

According to the International Institute of Tropical Agriculture (IITA), Rwandan soybeans are currently produced on 42,160 ha of land, making it the 6th largest African soybean producer, after Nigeria (601,000 ha), South Africa (150,000 ha), Uganda (144,000 ha), Malawi (68,000 ha), and Zimbabwe (61,000 ha). In tropical Africa the average grain yield of soybean is low (less than 1 tonne/ha). IITA states that ‘seed production and distribution is also a major impediment’ to soybean production in Africa. Ensuring a ready outlet for the processing of soybean production is a further constraint on the development of production of this high quality, inexpensive source of protein and oil.

In an assessment of post-harvest opportunities in Rwanda published in 2010, USAID did not include soybeans as a value chain with potential for development in Rwanda ‘due to the small and declining levels of production in Rwanda’, the absence of seeds capable of providing good yields and limited processing capacity. Investment in processing capacity was seen as the key to the development of soybean production in Rwanda.

Editorial comment

If successful, the investment by Mt Meru Group could open up opportunities for the development of the soybean value chain in Rwanda, reversing the decline in production, which the USAID highlighted in its 2010 report. It can be seen as part of efforts to promote increased self-sufficiency in a context of rising global food prices.

The production of local animal feed could also provide a stimulus to more efficient commercial livestock production, from dairy farming to beef and poultry production. The development of local feed production can be seen as one of the key constraints to the enhancement of commercially sustainable forms of livestock production in East Africa.

Currently, in neighbouring Uganda, complaints have emerged of cheap poultry imports from Brazil, Europe and South Africa undermining local production, with imported poultry meat being sold at prices between 19 and 35% below the prices of locally produced chickens. While this has reportedly led to the imposition of countervailing measures to protect local businesses, in the longer term reducing production costs and improving productivity constitute the critical areas to be addressed. The development of expanded soybean production and processing offers real opportunities for reducing feed costs for commercial poultry producers in Rwanda and neighbouring East African countries.

In the past, across the wider COMESA region, rules of origin problems linked to 35% value addition requirements have hindered the development of intra-regional trade in edible oil (for example Zambian complaints over the non-originating status of Kenyan palm-based edible oil exports). This may, in part, account for recent moves to set up edible oil processing factories in Zambia and Rwanda, based on locally available natural resources. 


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