MARKET DEVELOPMENT
Presco Seeks Protection of Local Investments as Imported Palm Oil Threatens Local Production
Presco Seeks Protection of Local Investments as Imported Palm Oil Threatens Local Production
25/11/2014 (THISDAY Live) - Presco Plc has called on the federal government to, as a matter of urgency, protect local investments from foreign dominance, noting that for local industries to grow and remain profitable it would require a good policy framework that will protect local investment.
Managing Director, Presco Plc, Mr. Uday Pilani, said the palm oil industry is a sector with huge potential for good returns, but has been hampered by unstable government policies, lack of funding, high cost of doing business among others.
Pilani, during a trade event, supported by the Federal Ministry of Agriculture and Rural Development, explained that Nigeria remains one of the best places for the cultivation and production of palm oil, but for some basic problems such as "land title, government’s talk not walk, policy inconsistency, palm oil production business is fast becoming uncompetitive.”
He said, the inability of government to get this right will lead to locally produced oil selling higher than the imported one thus, killing the local industries.
"Importers incur little or no cost in the course of doing business when compared to local industries, who have to contain with paying of all manner of bills," he said.
The Presco boss appealed for a level playing ground by asking the government to reconsider its regulation providing incentives and concession (75 per cent of chargeable import duty as tariff rebate) for companies in free trade zone thereby leaving them to pay only 8.75 per cent duty on Crude Palm Oil (CPO) imports, while other companies operating within Nigeria's customs territory pay 35 per cent duty.
He therefore advised that importers be charged appropriate duties on oil importation so as to save the country from dumping.
"What importers do is to sit behind a computer and have his business transaction carried with little or no stress on human and material resources. Meanwhile in my company, I pay contractors, workers, buy and maintain machineries, and be socially responsible to my host community," he said.
Stressing further on the challenges faced by palm oil producers in the country, Pilani implored the government to mitigate the cost of production as operators are faced with high cost of production when compared to what is obtainable in Malaysia or any other palm oil producing countries.
"Importation of Crude Palm Oil (CPO) is counterproductive. Nigeria becomes a dumping ground for cheap, low quality palm oil, thus jeopardising the import substitution objective of the Agricultural Transformation Agenda ATA.” He warned that if this situation is unabated, it would result to downsising and closing down of the oil palm estates.
Also speaking at the event, the moderator for the session, Mr. Aajyi Re-energising Nigeria’s oil Palm industry in his presentation said the palm oil producers in Nigeria need a sure and stable environment for the sector to remain viable, as government’s inconsistency in policies has not helped in the development of this important segment of nation’s agribusiness.
According to Ajayi: “It is high time Nigeria came up with a popular palm oil policy that will accommodate all players in the industry and not such policies that concentrate more on the attraction of new investors at the detriment of the existing one.”
For him, Nigeria government should live up to its transformation agenda policy and shun favouritism, which has led to the unbridled dumping of crude palm oil in Nigeria.
He advised Nigerian government to work out incentives that will not only encourage existing investors but attract both small and large operators into the industry.
“He stated that the palm oil industry needs not just arable land to grow her crop but needs a business friendly environment where government can through its policies provide operators with such incentives that will engender sustainable and profitable business environment.
"While it is known that oil plantation require a large land mass, however, acquiring the needed size of land is seriously hampered by the land title policy," he added.
He noted that the problem of land title does not only affect palm oil producers but also other players in agric business, maintaining that the high cost of obtaining a certificate of occupancy is one major factor that deters potential investors especially the smallholders.
And more worrisome to the palm oil producers, he said is the difficulties operators encounter in the course of sourcing fund for their business as most banks do not accept land for collateral.
He stressed that the inability for many intending players to come in has given rise for shortage of vegetable oil which importers are exploiting by flooding Nigeria with unverifiable quality in some cases with.
The event brought together international agricultural technology providers as well as policy makers, agribusiness leaders and entrepreneurs to Lagos recently to join force in positioning agriculture in Nigerian economy.
Managing Director, Presco Plc, Mr. Uday Pilani, said the palm oil industry is a sector with huge potential for good returns, but has been hampered by unstable government policies, lack of funding, high cost of doing business among others.
Pilani, during a trade event, supported by the Federal Ministry of Agriculture and Rural Development, explained that Nigeria remains one of the best places for the cultivation and production of palm oil, but for some basic problems such as "land title, government’s talk not walk, policy inconsistency, palm oil production business is fast becoming uncompetitive.”
He said, the inability of government to get this right will lead to locally produced oil selling higher than the imported one thus, killing the local industries.
"Importers incur little or no cost in the course of doing business when compared to local industries, who have to contain with paying of all manner of bills," he said.
The Presco boss appealed for a level playing ground by asking the government to reconsider its regulation providing incentives and concession (75 per cent of chargeable import duty as tariff rebate) for companies in free trade zone thereby leaving them to pay only 8.75 per cent duty on Crude Palm Oil (CPO) imports, while other companies operating within Nigeria's customs territory pay 35 per cent duty.
He therefore advised that importers be charged appropriate duties on oil importation so as to save the country from dumping.
"What importers do is to sit behind a computer and have his business transaction carried with little or no stress on human and material resources. Meanwhile in my company, I pay contractors, workers, buy and maintain machineries, and be socially responsible to my host community," he said.
Stressing further on the challenges faced by palm oil producers in the country, Pilani implored the government to mitigate the cost of production as operators are faced with high cost of production when compared to what is obtainable in Malaysia or any other palm oil producing countries.
"Importation of Crude Palm Oil (CPO) is counterproductive. Nigeria becomes a dumping ground for cheap, low quality palm oil, thus jeopardising the import substitution objective of the Agricultural Transformation Agenda ATA.” He warned that if this situation is unabated, it would result to downsising and closing down of the oil palm estates.
Also speaking at the event, the moderator for the session, Mr. Aajyi Re-energising Nigeria’s oil Palm industry in his presentation said the palm oil producers in Nigeria need a sure and stable environment for the sector to remain viable, as government’s inconsistency in policies has not helped in the development of this important segment of nation’s agribusiness.
According to Ajayi: “It is high time Nigeria came up with a popular palm oil policy that will accommodate all players in the industry and not such policies that concentrate more on the attraction of new investors at the detriment of the existing one.”
For him, Nigeria government should live up to its transformation agenda policy and shun favouritism, which has led to the unbridled dumping of crude palm oil in Nigeria.
He advised Nigerian government to work out incentives that will not only encourage existing investors but attract both small and large operators into the industry.
“He stated that the palm oil industry needs not just arable land to grow her crop but needs a business friendly environment where government can through its policies provide operators with such incentives that will engender sustainable and profitable business environment.
"While it is known that oil plantation require a large land mass, however, acquiring the needed size of land is seriously hampered by the land title policy," he added.
He noted that the problem of land title does not only affect palm oil producers but also other players in agric business, maintaining that the high cost of obtaining a certificate of occupancy is one major factor that deters potential investors especially the smallholders.
And more worrisome to the palm oil producers, he said is the difficulties operators encounter in the course of sourcing fund for their business as most banks do not accept land for collateral.
He stressed that the inability for many intending players to come in has given rise for shortage of vegetable oil which importers are exploiting by flooding Nigeria with unverifiable quality in some cases with.
The event brought together international agricultural technology providers as well as policy makers, agribusiness leaders and entrepreneurs to Lagos recently to join force in positioning agriculture in Nigerian economy.