Dufil Prima Foods’ vegetable oil refineries to boost Abia’s $12bn GDP economy

TWO OIL PALM refineries NEWS being built at Amokwe and Okai, Bende LGA by major food specialty company, Dufil Prima Foods Plc, makers of Indomie Noodles and Power Oil would boost the $12 billion gross domestic product (GDP) economy of Abia, Nigeria’s south-eastern sub-national state.

Cost of the two oil palm refineries was not immediately known at the time of filing this report

The project is a backward integration effort by the food specialty firm, which is aimed at reducing its cost of production, as well as boost the local economy and provide cheap source for raw materials locally.

It is also to tag in line with Nigeria’s apex bank, the Central Bank of Nigeria’s (CBN) directive for all foods related companies operating the country to set up plants to locally produce their raw materials.

The palm oil processing refineries occupy a large expanse of decades old palm plantations, including a virgin land where new breed palm seedling (tenerra) would be planted by Dufil Prima Foods.

Dufil Prima Foods latest move follows the 2011 example of PZ Cussons in a $650 million backward integration acquisition of vast oil palm estates and refineries in Cross River State operated by Wilmar, a Malaysian global provider of oil palm-based oils.

Nigeria is a major producer of palm oil, the world’s fourth largest producer of the product, accounting for three percent of global production. The Nigerian Institute for Oil Palm Research (NIFOR), in Benin, estimates that upstream palm oil production is some 0.98 million tonnes. But Trade Statistics for International Business Development say Nigeria’s palm oil deficit is now $800 million, due to increasing domestic demand for the product. In 2017, some 450,000 tonnes of crude palm oil (CPO) used mainly by foods based industries, were imported worth N116.3 billion.

The two oil refining plants at Okai and Amokwe in Item town, Bende LGA, when completed, would be producing vegetable oil that would be particularly used by Dufil Prima Foods.

Nnenna Ejekam, legal adviser of Dufil Prima Foods, who is said to have initiated the multi-million-naira investment in her homeland, Item, noted that the palm oil refineries would create employment in the rural areas.

“This is aimed at boosting our local economy, and stop the importation of raw materials from Malaysia,” she said.

Recall that Malaysia took some oil palm seedlings from Nigeria in the early 1960s, to develop them into cash crops. At that time, oil palm was the mainstay of the economy of Eastern Region of Nigeria under late Michael Okpara, the then premier of the region.

But today, the Asian country ranks among the world’s biggest producers of oil palm.

According to Ejekam, the coming of the oil palm refineries would change the economic narrative of Item people, as their age-old oil palm business would now become a big revenue earner for the town.

“With the establishment of the palm oil refineries in Item by Dufil Prima Foods Plc, poverty and criminality will be eliminated, as most of our youths will be gainfully employed; thereby creating wealth for the people,” the legal adviser said. She explained that the project had gone through three stages of: acquiring virgin land, the oil mill and the communities leasing out their palm trees to Dufil Prima Foods.

The company would startoff with harvesting leased old oil palm trees to service the oil refineries, while awaiting fruiting from new trees that would be planted on the virgin land. The local people would ensure adequate security for the mills and workers.

Kingsley Ogba Nwokoro, the president general of Item Development Association spoke at Amokwe, Item during the sword turning ceremony for the two factory sites, saying that Item people were pleased with the company for siting the projects in their place.