MARKET DEVELOPMENT
PZ Wilmar: Reshaping Oil Palm Industry with Massive Plantation Devt
PZ Wilmar: Reshaping Oil Palm Industry with Massive Plantation Devt
07/05/2013 (THISDAY Live) - Crusoe Osagie writes that PZ Wilmar, which targets the peak of the nation’s oil palm plantation industry by its massive plantation development in Cross River State, will certainly reset the balance of power in the sector on completion of its 100,000 hectare plantation.
Nigeria’s cement story in the last decade is proof that backward integration could be the most reliable strategy towards redeeming the country from its unsustainable dependence on other nations of the world for the supply of its essential commodities.
The backward integration policy helped to raise the output of local cement production from far less than 5 million metric tonnes per annum to over 20 million metric tonnes per annum in less than 10 years.
With the annual consumption of cement in Nigeria now hovering around 19 million metric tonnes, the backward integration policy has effectively made Nigeria independent in cement production and consumption.
Analysts say this manner of success must be replicated in the palm oil sector, rice sector, downstream petroleum industry, sugar industry among others, or else Nigeria will never actually become an economically independent nation.
Oil Palm Resurgence
In the last couple of years, the palm oil industry in Nigeria has witnessed a remarkable level of prominence, and large corporations, from within and outside the country, are rushing to set up palm oil processing factories.
They have discovered a massive gap between local production and consumption of palm oil in the country. In the usual band wagon approach, every investor with funds is moving to set up palm oil refineries, which will simply transform the popular red palm oil to the golden colour palm oil, which most Nigerians usually call ‘vegetable oil’ or ‘Ororo’.
Local Content
Analysts say it is unfortunate however that a large percentage of companies that are venturing into palm oil refining only plan to feed their production lines with imported palm oil from Malaysia and Indonesia.
Why do they not give thought to the possibility of generating local palm oil to feed their plants through the establishment of oil palm plantations, concerned stakeholders have repeatedly asked? In a country where the combined unemployment and under-employment rate is around 75 per cent, investors must not only think about how to make money off such an economy but also how to ensure that a significant number of jobs are created in the process
While an average palm oil processing plant may employ about 200 people directly and indirectly, a moderate oil palm plantation that feeds such a plant with crude palm oil will employ over 5,000 people, and this is what the nation needs if the targets often preached by the Federal Government are ever to be met.
This is the reason why the ongoing investment by PZ Wilmar into both palm oil processing and oil palm plantation said to be worth over $500 million is worthy of note. Unfortunately, only the palm oil processing and trading arm of PZ Wilmar’s investment in Nigeria seems apparent, obviously because it is located in the city.
However, a visit to the 5,500-hectare, previously defunct Calaro oil palm estate formerly owned by Cross River government and recently bought by PZ Wilmar; the 12,805-hectare Kwa Falls oil palm plantation, formerly owned by Obasanjo farms and also taken over by the same company; the 5,450-hectare Ibiae oil palm estate as well as another 8,000 hectares estate in Biase, which is still being negotiated, will convince even the most cynical critic of PZ Wilmar’s commitment to long term business that stimulates massive economic growth and development.
Visible Impact
A farmer and indigene of Betem Village in Biase Local Government Area, Cross River State, Mrs. Hannah Onda, has said her life tells the story of the impact that the company is making on the lives of ordinary Nigerians.
“I am a farmer; I am married with four children; two boys and two girls. It was a very tough life for me before I was engaged by PZ Wilmar as one of the workers in their oil palm nursery here in Ibiae. With this company I am guaranteed of a stable and reasonable income at the end of every month and I don’t have to rely only on my little farm for the sustenance of my children,” Onda told THISDAY.
She said since she started working with PZ Wilmar, apart from the regular income, which has become an additional income for her, she has also learnt farming skills from the company, which has also helped her to improve the performance of her personal farm where she grows cassava, maize and other arable crops at subsistence level.
Another employee at the plantation, Glory Izu Ivang, with a smile on her face, and uprooted weeds, which she had removed from some of the seedlings in the nursery in her hands, simply said; “this company is good to us, it has helped us to move from poor to rich.”
In a tour of the Calaro estate, Ibiae estate and Kwa Falls estate, THISDAY observed the massive agricultural activities taking place, with thousands of oil palm trees felled and new seedlings being transferred from the nursery to the field to replace the felled trees.
General Manager in charge of the company’s oil palm plantations, Mr. Lee, said after they procured the estates they realised that the existing trees were too old and therefore they were no longer yielding optimally and so they had to be knocked down and replaced.
“The trees were too old and they were not the best in terms of genetic quality, so we had to replace them. They were producing between 5 and 6 tonnes of fresh fruit bunches per hectare and that was by far too low compared to up to 30 tonnes of fresh fruits bunches that are obtainable from the trees we are now planting,” Lee explained.
Agriculturist and retired Permanent Secretary of the Cross Rivers State ministry of Agriculture, Dr. Sam Ekpe, who commented on the ongoing investment of PZ Wilmar in the state’s oil palm plantation industry, said any individual or company that is investing in the harsh terrain of agriculture in Nigeria must be encouraged.
He said to have Wilmar, which is the biggest oil palm producer in the world, investing actively in the country’s oil palm plantation is a development that must be seriously celebrated.
“Wilmar has the Roundtable on Sustainable Palm Oil (RSPO) certification and they are a responsible oil palm plantation company, they are targeting about 100,000 hectares of oil palm cultivation in Nigeria and as we speak they are already in possession of over 30,000 hectares of plantation, which they are massively replanting, while the Cross River state government is seriously working out the remaining 70,000 hectares to ensure that the company meets the target it has set for itself,” Ekpe said.
Presidential Assent
President Goodluck Jonathan, in November 2012, inaugurated the Calaro, Ibiae and Biase Oil Palm plantations in Cross River State, a multi-million naira agribusiness joint venture between PZ-Cussons and Wilmar International Limited of Singapore.
The company targets 50,000 hectares of land on which to produce oil palm that would further be processed into various consumer pack edible oil, cosmetic ingredients and chemicals.
Jonathan, who was represented at the launching, said the investment in Calaro-Ibiae and Biase is “an important milestone in our national investment drive that will stimulate economic diversification, agric transformation and rural based economic development.”
The president described the venture as perhaps Nigeria’s great leap into return to oil palm production and processing. The venture, according to Governor Liyel Imoke, would create clusters of job opportunities in excess of 20,000 new jobs.
It would also create a cluster of agricultural productivity in the state, which has now turned to agriculture and tourism, to grow its lean economy, following the loss of its entire crude oil resources to Cameroon (in Bakassi in August 2008) and neighbouring Akwa Ibom State (176 oil wells in July 2012).
Wilmar is the largest global processor and merchandiser of palm and lauric oils, and a major oil palm plantation owner. The conglomerate is also Asia’s leading agribusiness group. In China, the group is the leading producer of consumer pack edible oil, oilseeds crusher, edible oil refiner as well as manufacturer of specialty fats and oleo chemicals. While in India, it is one of the largest refiners of edible oils, as well as leading producer of consumer pack edible oils.
The investment in Calaro-Ibiae and Biase plantations is part of a new joint venture partnership between PZ-Cussons and Wilmar International Limited of Singapore.
President Jonathan said the joint venture serves to harness natural resources in Nigeria, and actualise the collective dream of strong local content and far reaching backward integration that will conserve precious foreign exchange earnings and create rural employment.
Special Adviser to the Cross River State Government on Investment Promotion, Mr. Gerald Ada, said the state government and Wilmar must be commended for being able to tie up this investment and set it on course within the last 2 years.
“We went through a privatization process for the plantations which Wilmar procured from the state government. We advertised the assets and received bids from both within and outside Nigeria. Of all the bids we received, Wilmar came first and Presco, which is an existing oil palm plantation owner in Edo State of Nigeria, came second. Wilmar was able to pay up and also met all the obligations, which the procurement of the plantation presented, including reaching a development understanding with the host communities and since then they have never looked back.”
He maintained that no investor with the intention of making quick returns would embark on the replanting of over 30,000 hectares of oil palm plantation, tying down about $500 million in the process and waiting for long 10 years when the trees begin to yield fruits in economically viable quantities; “which is exactly what PZ Wilmar is doing”.
Nigeria’s cement story in the last decade is proof that backward integration could be the most reliable strategy towards redeeming the country from its unsustainable dependence on other nations of the world for the supply of its essential commodities.
The backward integration policy helped to raise the output of local cement production from far less than 5 million metric tonnes per annum to over 20 million metric tonnes per annum in less than 10 years.
With the annual consumption of cement in Nigeria now hovering around 19 million metric tonnes, the backward integration policy has effectively made Nigeria independent in cement production and consumption.
Analysts say this manner of success must be replicated in the palm oil sector, rice sector, downstream petroleum industry, sugar industry among others, or else Nigeria will never actually become an economically independent nation.
Oil Palm Resurgence
In the last couple of years, the palm oil industry in Nigeria has witnessed a remarkable level of prominence, and large corporations, from within and outside the country, are rushing to set up palm oil processing factories.
They have discovered a massive gap between local production and consumption of palm oil in the country. In the usual band wagon approach, every investor with funds is moving to set up palm oil refineries, which will simply transform the popular red palm oil to the golden colour palm oil, which most Nigerians usually call ‘vegetable oil’ or ‘Ororo’.
Local Content
Analysts say it is unfortunate however that a large percentage of companies that are venturing into palm oil refining only plan to feed their production lines with imported palm oil from Malaysia and Indonesia.
Why do they not give thought to the possibility of generating local palm oil to feed their plants through the establishment of oil palm plantations, concerned stakeholders have repeatedly asked? In a country where the combined unemployment and under-employment rate is around 75 per cent, investors must not only think about how to make money off such an economy but also how to ensure that a significant number of jobs are created in the process
While an average palm oil processing plant may employ about 200 people directly and indirectly, a moderate oil palm plantation that feeds such a plant with crude palm oil will employ over 5,000 people, and this is what the nation needs if the targets often preached by the Federal Government are ever to be met.
This is the reason why the ongoing investment by PZ Wilmar into both palm oil processing and oil palm plantation said to be worth over $500 million is worthy of note. Unfortunately, only the palm oil processing and trading arm of PZ Wilmar’s investment in Nigeria seems apparent, obviously because it is located in the city.
However, a visit to the 5,500-hectare, previously defunct Calaro oil palm estate formerly owned by Cross River government and recently bought by PZ Wilmar; the 12,805-hectare Kwa Falls oil palm plantation, formerly owned by Obasanjo farms and also taken over by the same company; the 5,450-hectare Ibiae oil palm estate as well as another 8,000 hectares estate in Biase, which is still being negotiated, will convince even the most cynical critic of PZ Wilmar’s commitment to long term business that stimulates massive economic growth and development.
Visible Impact
A farmer and indigene of Betem Village in Biase Local Government Area, Cross River State, Mrs. Hannah Onda, has said her life tells the story of the impact that the company is making on the lives of ordinary Nigerians.
“I am a farmer; I am married with four children; two boys and two girls. It was a very tough life for me before I was engaged by PZ Wilmar as one of the workers in their oil palm nursery here in Ibiae. With this company I am guaranteed of a stable and reasonable income at the end of every month and I don’t have to rely only on my little farm for the sustenance of my children,” Onda told THISDAY.
She said since she started working with PZ Wilmar, apart from the regular income, which has become an additional income for her, she has also learnt farming skills from the company, which has also helped her to improve the performance of her personal farm where she grows cassava, maize and other arable crops at subsistence level.
Another employee at the plantation, Glory Izu Ivang, with a smile on her face, and uprooted weeds, which she had removed from some of the seedlings in the nursery in her hands, simply said; “this company is good to us, it has helped us to move from poor to rich.”
In a tour of the Calaro estate, Ibiae estate and Kwa Falls estate, THISDAY observed the massive agricultural activities taking place, with thousands of oil palm trees felled and new seedlings being transferred from the nursery to the field to replace the felled trees.
General Manager in charge of the company’s oil palm plantations, Mr. Lee, said after they procured the estates they realised that the existing trees were too old and therefore they were no longer yielding optimally and so they had to be knocked down and replaced.
“The trees were too old and they were not the best in terms of genetic quality, so we had to replace them. They were producing between 5 and 6 tonnes of fresh fruit bunches per hectare and that was by far too low compared to up to 30 tonnes of fresh fruits bunches that are obtainable from the trees we are now planting,” Lee explained.
Agriculturist and retired Permanent Secretary of the Cross Rivers State ministry of Agriculture, Dr. Sam Ekpe, who commented on the ongoing investment of PZ Wilmar in the state’s oil palm plantation industry, said any individual or company that is investing in the harsh terrain of agriculture in Nigeria must be encouraged.
He said to have Wilmar, which is the biggest oil palm producer in the world, investing actively in the country’s oil palm plantation is a development that must be seriously celebrated.
“Wilmar has the Roundtable on Sustainable Palm Oil (RSPO) certification and they are a responsible oil palm plantation company, they are targeting about 100,000 hectares of oil palm cultivation in Nigeria and as we speak they are already in possession of over 30,000 hectares of plantation, which they are massively replanting, while the Cross River state government is seriously working out the remaining 70,000 hectares to ensure that the company meets the target it has set for itself,” Ekpe said.
Presidential Assent
President Goodluck Jonathan, in November 2012, inaugurated the Calaro, Ibiae and Biase Oil Palm plantations in Cross River State, a multi-million naira agribusiness joint venture between PZ-Cussons and Wilmar International Limited of Singapore.
The company targets 50,000 hectares of land on which to produce oil palm that would further be processed into various consumer pack edible oil, cosmetic ingredients and chemicals.
Jonathan, who was represented at the launching, said the investment in Calaro-Ibiae and Biase is “an important milestone in our national investment drive that will stimulate economic diversification, agric transformation and rural based economic development.”
The president described the venture as perhaps Nigeria’s great leap into return to oil palm production and processing. The venture, according to Governor Liyel Imoke, would create clusters of job opportunities in excess of 20,000 new jobs.
It would also create a cluster of agricultural productivity in the state, which has now turned to agriculture and tourism, to grow its lean economy, following the loss of its entire crude oil resources to Cameroon (in Bakassi in August 2008) and neighbouring Akwa Ibom State (176 oil wells in July 2012).
Wilmar is the largest global processor and merchandiser of palm and lauric oils, and a major oil palm plantation owner. The conglomerate is also Asia’s leading agribusiness group. In China, the group is the leading producer of consumer pack edible oil, oilseeds crusher, edible oil refiner as well as manufacturer of specialty fats and oleo chemicals. While in India, it is one of the largest refiners of edible oils, as well as leading producer of consumer pack edible oils.
The investment in Calaro-Ibiae and Biase plantations is part of a new joint venture partnership between PZ-Cussons and Wilmar International Limited of Singapore.
President Jonathan said the joint venture serves to harness natural resources in Nigeria, and actualise the collective dream of strong local content and far reaching backward integration that will conserve precious foreign exchange earnings and create rural employment.
Special Adviser to the Cross River State Government on Investment Promotion, Mr. Gerald Ada, said the state government and Wilmar must be commended for being able to tie up this investment and set it on course within the last 2 years.
“We went through a privatization process for the plantations which Wilmar procured from the state government. We advertised the assets and received bids from both within and outside Nigeria. Of all the bids we received, Wilmar came first and Presco, which is an existing oil palm plantation owner in Edo State of Nigeria, came second. Wilmar was able to pay up and also met all the obligations, which the procurement of the plantation presented, including reaching a development understanding with the host communities and since then they have never looked back.”
He maintained that no investor with the intention of making quick returns would embark on the replanting of over 30,000 hectares of oil palm plantation, tying down about $500 million in the process and waiting for long 10 years when the trees begin to yield fruits in economically viable quantities; “which is exactly what PZ Wilmar is doing”.