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Nigeria to become global leader in Oil palm production

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Mr. Santosh Pillai is the Managing Director, West Africa, PZWilmar Limited. In this chat with Financial Vanguard at the company’s factory in Lagos during the recent ISO 22000:2005 certificate presentation to the company by Bureau Veritas.
He spoke on the company’s backward integration programme, saying that although Nigeria was once the world’s biggest exporter if palm oil, she currently imports over 350,000 tonnes of palm oil yearly.

PZBackward integration: According to Pillai, the goal of PZ Wilmar, the joint venture between PZ Cussons and Wilmar International, is to take Nigeria back to her glorious days as a world leader in palm oil production.
“When we started this palm oil refinery, we simultaneously started our backward integration process. That means we started to grow oil palm in Nigeria.
Nigeria was the world’s leader in oil palm in the 1960s and 1970s and Malaysia and Indonesia took the know-how from Nigeria and over the last 30, 40 years, they have perfected it and have now become world leaders in oil palm production.
So the intention of PZ Wilmar is to restore Nigeria to its former position as world leader in oil palm production, therefore, we are not only putting up a refinery here, which has a capacity of 1,000 tons per day, but we are also interested in growing oil palm. We, therefore, set out on a journey to set up 50,000 hectares of oil palm plantation in Cross River State.
If you visit Cross River State today, we have already acquired 26,500 hectares of land and we are growing the oil palm at Calaro Oil Palm Estate; Ibiae Oil Palm Estate and an estate in Biase.
Apart from these, we also acquired the 12,800-hectare oil palm plantation from Obasanjo Farms. The ex-president has his own plantations in Cross River State and we acquired the plantations in 2012.
Our goal:
“Subject to more land availability, our intention is to grow 50,000 hectares of oil palm. If there is more land available, this joint venture will continue to grow more and more oil palm, our single objective being that we need to grow oil palm in this country because Nigeria has competitive as well as comparative advantage to grow oil palm and to be a global leader also.
” So we want to set up a fully integrated project; we will grow palm in this country, we will mill the crude palm oil in Cross River State and transport the crude palm oil to our refinery here in Lagos, we will refine it, refractionate it and package it into world-class brands – Mamador and Devon Kings and we will ensure that through the processes, the consumers in Nigeria will have access to world-class quality edible oil.
“That is our intention. This company is not only in the business of creating a fully integrated oil palm project but also in the business of creating very high quality products and brands.”
Challenges:
Speaking on the challenges faced by the company, Mr. Pillai who sees challenges as necessary said: “If there were no challenges, there would be no fun running businesses in any country.”
Reeling out the major challenges, he said they could be as common as inadequate power supply, infrastructure problems such as roads, availability of fuel etc. “These are common challenges which businesses have to overcome.”
Govt policies:
“The most important challenge we as an organisation face, is government’s policy on imports and duties structure in Nigeria. As a very serious and long-term investor in this country, what we expect from government is to ensure there is a level-playing field;palm-oil-Boycotting
that every investor in the country is treated fairly and equally and there are no benefits being given to one single company which will bring down the whole industry.
That is our only request and we will continue to seek and engage the government and regulatory authorities to ensure there is always a level-playing field for investors like us,” he said.
Choice of Cross River:
On why the company chose to site its oil palm plantations in Cross River State, Pillai said: “Oil palm can grow anywhere but does well in only select belts of the equator – five degrees north and five degrees south – that is where oil palm grows very well. Cross River and Rivers states come under that oil palm belt.
We chose Cross River State because during our entire due diligence process, we went there and we saw that when Nigeria was the world leader in oil palm production, Cross River State was one of the states with a lot of oil palm. Akwa Ibom also has but we have to go to a place where we can do a very big project.
“We don’t want to do small projects everywhere. But in the course of time, when we develop more and more, we will definitely select a lot more states. “But right now, we want to concentrate in one place where we can start and do a very good job and then we start to replicate that in other places.”

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