MARKET DEVELOPMENT
DekelOil Closer to Creating A Major West African Palm Oil Company
DekelOil Closer to Creating A Major West African Palm Oil Company
20/02/2014 (Proactive Investors USA & Canada) - DekelOil (LON:DKL) has moved a step closer to becoming a major West African palm oil company with the start of commercial production from the crude palm oil (CPO) extraction mill in the Ivory Coast.
The mill is expected to produce 70,000 tonnes (t) a year at full capacity, making it one of West Africa's largest, and will enable DekelOil to take advantage of growing demand for the oil, particularly in China, India, and the Middle East.
Palm oil - used in cooking, cosmetics, and biofuel - is the world’s most widely used edible oil with demand expected to double by 2020.
DekelOil, which owns 51% of the vertically integrated palm oil project, received an advanced payment of €610,000 (£501,000) last month under an off-take agreement with local palm oil refiner, Societe Africaine de Raffinerie. The refiner will pay a total of €915,000 for the delivery of 24,000tpa of CPO from the mill.
DekelOil has said it is also in talks with other potential partners.
Production capability from the mill is set to increase this month, to cope with the peak harvesting season in the Ivory Coast which is due to start in March, and to continue to expand in 2015.
The mill, whose construction was led by the experienced Malaysian firm Modipalm & Boilermech in a turnkey contract, came in on budget and ahead of schedule, the company said on Tuesday.
Shares in the company jumped as much as 20% following the announcement.
All in all, it’s been an exciting time for the company since it started trading on AIM just 11 months ago, and its progress is likely to continue.
It has a second, even larger, project area that it hopes will boost its presence in West Africa as well as offer further opportunities for expansion.
West Africa is increasingly attracting major international palm oil companies as the traditional growth zones in Malaysia and Indonesia are being hampered by land shortages.
Ivory Coast, the world's largest producer and exporter of cocoa and a significant producer of coffee and palm oil, has modern infrastructure, including the largest port in West Africa.
DekelOil has a world-class nursery with capacity of 1mln seedlings a year, agreements with 5,000 local smallholders and co-operatives covering more than 27,000 hectares of mature plantations for initial feedstock, and 1,900 hectares of planted estates.
The mill is expected to produce 70,000 tonnes (t) a year at full capacity, making it one of West Africa's largest, and will enable DekelOil to take advantage of growing demand for the oil, particularly in China, India, and the Middle East.
Palm oil - used in cooking, cosmetics, and biofuel - is the world’s most widely used edible oil with demand expected to double by 2020.
DekelOil, which owns 51% of the vertically integrated palm oil project, received an advanced payment of €610,000 (£501,000) last month under an off-take agreement with local palm oil refiner, Societe Africaine de Raffinerie. The refiner will pay a total of €915,000 for the delivery of 24,000tpa of CPO from the mill.
DekelOil has said it is also in talks with other potential partners.
Production capability from the mill is set to increase this month, to cope with the peak harvesting season in the Ivory Coast which is due to start in March, and to continue to expand in 2015.
The mill, whose construction was led by the experienced Malaysian firm Modipalm & Boilermech in a turnkey contract, came in on budget and ahead of schedule, the company said on Tuesday.
Shares in the company jumped as much as 20% following the announcement.
All in all, it’s been an exciting time for the company since it started trading on AIM just 11 months ago, and its progress is likely to continue.
It has a second, even larger, project area that it hopes will boost its presence in West Africa as well as offer further opportunities for expansion.
West Africa is increasingly attracting major international palm oil companies as the traditional growth zones in Malaysia and Indonesia are being hampered by land shortages.
Ivory Coast, the world's largest producer and exporter of cocoa and a significant producer of coffee and palm oil, has modern infrastructure, including the largest port in West Africa.
DekelOil has a world-class nursery with capacity of 1mln seedlings a year, agreements with 5,000 local smallholders and co-operatives covering more than 27,000 hectares of mature plantations for initial feedstock, and 1,900 hectares of planted estates.