Presco pumps N75bn into Nigeria’s palm oil industry

Presco Plc, one of the leading palm oil producers in Nigeria, says it has so far invested N75 billion into the industry and plans to produce 47,000 metric tonnes (MT) of crude palm oil (CPO) in 2018.

Felix Nwabuko, managing director of Presco, says the company plans a capital expenditure investment of N46 billion over the next five years (2018-2022).

Nwabuko says the investments will go into plantations development, processing facilities, energy infrastructure and other supporting machinery, equipment and infrastructure.

“Our current capacity is 63 percent in the peak season and 24 percent in the lean season. Estimated production for 2018 is 47,000 MT of CPO. An average annual rise of 11 percent is expected over next five years,” he tells BusinessDay.

He reveals that the company has a total land bank of 40,000 hectares, of which total planted areas are 20,136 hectares of oil palm plantation and 138 hectares of rubber plantation.

“Our programme with smallholder farmers comes in the form of making available high yielding planting materials raised in our own nurseries to those who are interested,” he states.

“Corporate social responsibility (CSR) is one of the three elements of the management principles of our Group in all the countries in which it operates. Our CSR programme delivers overall positive impact and long-term improvement on wealth creation, education and living conditions (job creation, equipping schools, scholarships, electricity, potable water, and roads maintenance, among others),” he says.

On what it will take Nigeria to achieve sufficiency in palm oil production, the managing director says the country must take seriously, a sustained aggressive planting of additional hectares of oil palm plantations and commensurate expansion in processing facilities capacities, supported with well thought-out and well-monitored government policies together.

Nigeria produces between 900,000 and 1.2 million MT, out of 2.1 million MT local demand. The gap is filled by imports from Indonesia and Malaysia. Palm oil is used in foods as well as for the manufacture of the majority of packaged foods, ranging from biscuits to ice cream.

Nigeria has a population of 183 million, more than half of whom are under 40. The combined commercial oil palm plantations by Okomu, Presco and PZ Wilmar is said to be under 900,000 MT, while smallholders farmers have about 400,000 MT. This is still not enough.

Presco made a revenue of N12.825 billion in the first half of 2017, from N7.518 billion in the corresponding period of 2016.

Its profit after tax was N5.555 billion, up 84 per cent from N3.012 billion in the corresponding period of 2016.

Some experts argue that Nigeria needs to plant two million hectares of oil plam to be self-sufficient, which will cost over N2 trillion.

ODINAKA ANUDU