Presco Expands Palm Oil Production, to Diversify into Cocoa, Rubber

Presco Oil Palm plc has announced plans to expand its investment in oil palm production, injecting millions of dollars into state-of-the-art vegetable refineries and oil mills. By this development, the company is boosting Nigeria’s local vegetable oil output and moving the nation towards self-sufficiency in production of the essential commodity.

Chairman of the company, Mr. Pierre Vandebeeck, told THISDAY that the investment is an indication of the company’s confidence in the nation’s economy and also a move to drive economic growth through job and wealth creation.

Vandebeeck also stated that plans were in progress to diversify Presco’s business into cocoa and rubber, noting that these two cash crops were pivotal in the company and country’s quest to diversify revenue base and source of foreign exchange earning.

According to him, the company had also acquired a biotechnology company in Belgium to produce high performing planting materials to achieve greater yields and quality, maintaining that for the past ten years, the company has being investing in a genetic bloc of oil palm, having over 200 different crossings from the whole world, which the company will propagate through tissue culture and also make available to anyone prepared to pay for it.

In his words: “We have the first result for this and five years after planting, we added 20 tonnes per hectare with an extraction rate of 29 per cent and this means we are doubling the oil yields per hectare of what is obtainable now. We are doing the same thing for cocoa because personally I believe in three crops which are rubber, oil palm and cocoa. We are going to produce high performing clones that are disease resistant.”

“I have not done the feasibility study yet but the cost estimate for the our new oil mill is about $20 million and the refinery is $10 million summing up to a $30 million investment. A hectare of new plantation is about $6000, so multiply that to know how much we are investing every year. We are not stopping. We are like a vehicle driving very fast all the time, although I do say we should slow down a bit but there are so many opportunities that come up that we do not want to miss and therefore you are more or less pushed to continue investing,” he added.

“We are the only company in this industry in the world that has succeeded in cloning rubber trees. We started two years ago and will be planting our first cloned rubber trees in Ivory Coast and Ghana because we believe through this system we will be increasing the rubber yields by about 30 per cent per hectares by 2 tonnes to 3 tonnes, but I believe it will be more,” he added.

Meanwhile, the company also said it has opened a new chapter in its history, through the appointment of its first Nigerian Managing Director, Mr. Felix Nwabuko, to guide the company to success in its goal of remaining the most innovative and reliable operator in the sector globally.

Nwabuko, with vast experience spanning about three decades, in KPMG, Siat Group, University College, London among others is the new man to drive the company towards its set objectives.

Vandebeeck noted that every year, the company cultivates thousands of hectare of land on average along with initiatives in alternative electricity generation investments, oil palm processing and refining among others all keeping investments flowing into the country from firm.

He pointed out that the investment in improved planting materials which is continuous and gulping a lot of resources is a project not only for the company, but for farmers to use for growing high quality yields in their various farms across the country.

This is an investment that is recurrent and gulping a lot of money. We have the best scientist working on this project. We are making this project available not for our plantations. I consider our company as a commercial entity where we have our presence in different parts of the continent, growing platforms to produce top planting materials for whoever wants to buy it,” he said.

“God willing, we are looking at a profit of about N4 billion this year . For 2014, we declared a dividend and our company’s policy is 50 per cent dividends of the net profit. So if we are making a profit of N3 billion after taxes, we will be declaring about N1.5 billion dividend to our shareholders,” he added.

Vandebeeck said the increasing terrorist activities of the Boko Haram sect in the northern part of the country has disrupted so many business activities but however hoped for the achievement of stable and peaceful business activities in the north.

“We are committed to research and development and also devote each year, more resources to this activity. Indeed we are, together with our international partners, at the forefront in the development of improved oil palm and rubber planting materials, which aims at selecting strains adapted to our soil and weather and with increasing yield per hectare,” he said.