‘Illegal tolls increase cost of oil palm for consumers’
Brian Hammond is the managing director of IMC Limited. In this interview with CALEB OJEWALE, he highlights the challenges and limitations faced by oil palm industries operating in the country.
What informed your decision to venture into agriculture
In Nigeria, we spend billions of dollars importing different types of food, and getting more people involved in agriculture, especially at the commercial scale. This will greatly reduce the need of buying imported food, unless it is a crop that doesn’t grow here in Nigeria.
What is the extent of your involvement in oil palm cultivation
In IMC, we have oil palm division in Nsukwa village, Delta state. It used to be run by the old Bendel State Government- Oil Palm Company (OPC). In 1996, the then state government decided to sell because it was not running efficiently.
Since taking over the plantation from government, how have you turned the place around
IMC limited has run the plantation since 1996, but, as at the time I took over as managing director in 2009, most of the trees were already very old. A lot of them were planted around 1975 and in 2000, the starting year, even before I took over, we started a replanting program. In the earlier years, we were not able to replant as we would have, but now, the replanting is more aggressive. We are planting 320 hectares next year, and we will plant at least that rate for the foreseeable future.
We have planted almost 1,300 hectares from year 2000 till date and the total plantation size is 3,495 hectares. So that means we have over 2,000 hectares of very old tress which are not commercial in most parts of the world, and starting next year, we need to start cutting down some of these very old trees.
In terms of tonnage, what is the production yield at the moment
When we get to the point where we’ve fully replanted all our trees, we can get 45,000 tonnes of Fresh Fruit Bunches (FFB), giving 9,000 tonnes of Crude Palm Oil (CPO). Presently, however, our production capacity is 12,200 tonnes of FFB and this in terms of oil, with an extraction rate of 20 percent, gives approximately 2,500 tonnes. This is in theory though, as we actually produce 2,000 tonnes at the moment because we do not have all our trees as high yielding.
Based on the rate of replanting we are doing now and also with the increased maintenance, such as more frequent usage of fertilizer, pruning etc., we expect output to increase by at least, 10 percent a year.
In running the plantation over the years, what has your experience been like
As a company that wants to see as much local production especially in agriculture, we are proud to have employed over 400 people. With this, we are able to create substantial number of employment for people who haven’t gone through much education (especially tertiary) and pay them between N80,000-N100,000 per month, during the peak season which is usually between the months of March and July. As a company as well, we do a lot of Corporate Social Responsibility (CSR) for our host communities.
What have been the challenges
One of the big problems we have had is that we have never had electricity and for this reason, we have 3 generators with a capacity of up to 500kva that runs for about 10 hours a day, for the mill. But the way plantation works is that we don’t just provide electricity for the mill and office, most of our staff members reside in the many building quarters we have built, with electricity, water and other facilities. We have our own clinic as well.
Bad road is a major challenge. Illegal tolls on roads is another concern as well. Oil tankers end up spending as much as N80, 000 on illegal tolls while plying different states and eventually, all these costs are being passed to the end users. In Delta state, it is very difficult to get plantation workers, so we would have had a severe labour shortage, if not for the fact that we actively had to recruit staff from southern states like Akwa Ibom and Cross River.
What is the reason for this shortage? Could it be that those in Delta don’t like to work on plantations
Yes. In the villages especially, many of them don’t like doing this kind of job; they prefer office-based jobs.
Recently, you were at the Roundtable for Sustainable Palm Oil (RSPO) conference, where stakeholders discussed adoption of a national interpretation for Nigeria, so that our oil palm produce can be certified acceptable internationally. How close is your company to achieving some of those guidelines
Once IMC sees the adopted national interpretation, we would hire a consultant to advise us on what to do, so we haven’t formally started the process. But from what I have seen other companies go through, it can take two years to do this. Though, the company plan starting this year and complete the process by 2018.
Is there a role for the government in ensuring Nigeria’s oil palm production meets international requirements
RSPO is mainly private sector led, but once we have the national interpretation, we still need to let the ministry of agriculture know what we are doing and why we are doing it. One of the ways government can help is ensuring that oil palm products get RSPO certification.
Do you think it is a good idea looking at exportation of oil palm products, when we can barely meet local demands
For many of the companies who want to be RSPO certified, they are actually not looking forward to it for export purposes. This is because there would be a point, where even the Nigerian companies will need to be RSPO certified to sell in the local markets or to even bigger companies internally.
There is presently a shortage of 500,000 – 700,000 tonnes of Crude Palm Oil (CPO) in Nigeria and this keeps increasing with the growing population. So, we have a long way to go, to meet the demand-supply gap, much less exportation.
There are other things government needs to do, so as to speed up the production volumes in the country. Many smallholder farmers complain of inability to access loans. If farmers can buy fertilizers and do the maintenance activities they need to do, their yields will increase; they will earn more money and government will get more taxes.
Also, NIFOR, which is the research institute for developing oil palm in Nigeria, is poorly funded, even though they have some very good staff. They need to develop (hybrid) seedlings in sufficient quantity and qualities. They also need to get their seedlings certified to meet international standards, a situation, which makes many farmers, import from overseas. It is important for us to get high yield seedling that will produce double the yield of “Dura”.
CALEB OJEWALE