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AGRIC BUSINESSBUSINESS & ECONOMY

Oil Palm Industry Gets Over N22 Billion Investments From Multinationals

As Nigeria inches towards self sufficiency in Oil Palm production, PZ Wilmer has invested about $80 million on its crude palm oil refinery in the country.

Nigeria was the world’s leading producer and exporter of palm oil in the 60’s, but the country lost its dominance in the international trade after 1980s and is currently the fifth largest producer, behind Indonesia and Malaysia (51 per cent and 34 per cent of the world production in 2013/14), according to the United States Aids Agency (USAID).

PZ Wilmer, Preco, Dufil Prima Foods and others in this sector have spent over N22 billion ($110 million) on expanding their crude palm oil refineries.

Checks revealed that PZ Wilmer has staked about $80 million on its crude palm oil refinery in Nigeria in its backward integration plan. Also, Presco Oil Palm Plc, it was learnt, may have spent $30 million to boost oil palm production in the country.

Dufil Prima Foods Plc, a key player in the Nigeria culinary industry, has equally embarked on strategic backward integration to ensure 100 per cent local content in most of the products it produce. Besides, the firm has established an oil refinery and a palm tree plantation under the Edo State Government Agribusiness revolution scheme. It has also acquired and signed a Memorandum of Understanding (MoU) with the Edo State government for 60,000 hectares of land for cultivation of palm trees. Though the value of the money involvement could not be ascertained, the palm oil plantation is part of efforts by private investors to bridge the supply gap of palm oil within the country. According to a data portal, Index Mundi, the domestic palm oil produced totaled 850,000 metric tonnes in 2012.

The report noted that the consumption of palm oil in Nigeria amounts to 1.0 million metric tonnes per annum, while the official figures estimate the shortage in the oil palm industry at about 150,000 metric tonnes annually. This means that the food grade industrial output of palm oil does not match local consumption. Checks showed that the national demand for palm oil has grown faster than the domestic supply. Production deficit as at 2014 was well over 900,000 tonnes per annum. Consequently, the country still imports palm oil to satisfy the local demand.

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Comments (5)

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