October 4, 2016

Nigerian palm oil sector: Still a promising growth story

Favourable prospects for the Nigerian palm oil sector…

With a supply gap of about 500,000 metric tonnes (mt) and fertile arable land for cultivation, the untapped potential of the Nigerian palm oil sector is large. The main producers, Okomu Oil and Presco, have continued to increase their plantation area and are on course to meet their 2018 and 2020 targets of growing their respective land area to 12,000 hectares (ha) and 20,000ha. In 2015, mature land constituted about 95% of the total land area for both producers combined, growing by 10.8% for Okomu and 46.2% for Presco. Total crude palm oil (CPO) produced during the year increased by 12% to 35,600 tonnes (te) and 10% to 39,328te for both companies respectively. We expect both companies to surpass their targets by 2017. For 2016E specifically, we forecast sales growth of 24.5% and 38.8% for Okomu and Presco, and PBT growth of 62.7% and 43.7%.

 

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