Palm Oil is one commodity that is special because the largest plantations are in Edo State, Nigeria, and the global Palm Oil trade started in Nigeria. Infact in 1963, Nigeria had 43% of total global supply. Today the market is controlled by Malaysia, Thailand, Indonesia, Cambodia
In 2015, the Central Bank hot listed Palm Oil as one of 42 items to restrict from accessing 'form m' in it's plan to reduce the pressure on the demand for US dollars and grow the local sector. Gentlemen & Ladies, out of the 78m metric tonnes the world needs every year,
Nigeria controls 1.5% of global production with 1.43million metric tonnes annually valued at 985.8bn naira. The 2 largest Palm Oil producers in Nigeria are both listed on the stock exchange as public limited companies

* Okomu Oil (62.5% owned by SOCFINA, A Belgian Company)
* Presco (60% owned by SIAT group another Belgian Company that employs 13k people in Nigeria, Ghana, Gabon, Ivory Coast & Cambodia)

Of the 1.43million metric tonnes Nigeria needs, it still Imports 393k thousand metric tonnes which amounts to 270.9bn naira annually
The CBN's restriction of 'form m' for the importation of Palm Oil and Palm kernel Oil in 2015 led to a 54.4% surge in the commodity as 1149 litres that makes a tonne doubled in price from under 350k per tonnes to 689,400 naira per tonne.
There's a huge market to further backwardly integrate a commodity that's used for

* Retail food & snacks manufacturing
* Skin Care & Cosmetics
* Animal feed ( Palm Kernel Expeller)
* Pharmaceutical products
* Soap manufacturing
* Cooking
Interestingly the price to earnings ratio for the sector average is even better around Africa at 12.6% and South East Asia at 17.6% compared to 5.2% at home.

Other than the 270bn naira in local demand gap, there's a huge export market with better price to earnings ratio
The major work seems to be in cultivating plantations at commercial scale by aggregating farmers, providing the seeds, and managing the coops that gives you your minimum offtake for milling.

What's interesting to me is that the 62% SOCFINA owns & 60% SIAT group
(both Belgian Companies) own in the 2 largest Palm Oil companies quoted on the Nigerian Stock Exchange violates the Corporate Governance Responsibility Standards Act of the Nigerian Stock Exchange that doesn't allow companies own more than 48% of their stock.
I hope we will wake up to this 985bn naira per year industry and all the export potentials it has.

Cc: @asemota Big Chief

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Kelvin

Kelvin Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @realkelvin07

13 Apr
Lithium Ore is a rock ore mineral available in Kogi, Nassarawa, Ekiti, Kwara, Cross Rivers, Oyo and Plateau. Of the many uses of this mineral ore our miners sell to intl brokers through Irrevocable Corporate Payment Order (ICPO) agreements, I'm going to focus on phone batteries
The global phone battery market in 2020 was worth $46.97bn. Interestingly China controls 60% of this market, and is the number one importer of Lithium Ore from Nigeria. So if our strength is not in building hardware like smartphones. Why can't we make the battery accessories?
In 2020, Chinese exports constituted 25.2% of all the imported goods that came into Nigeria, & today 1 out of every 4 ships that sails around the world has an eCO from China, meaning China controls 25% of global trade, and consequently 56% of the BRICS Bloc.
Read 8 tweets
12 Apr
In 2020, the largest Chocolate companies made $107bn. 30% of their supply of Cocoa came from Ghana that earned $2bn. At a World Economic Conference in Davos last year, President Nana Akufo Addo told business and Political Leaders, that he doesn't see the future prosperity
Of Ghanians from this trend. Last month, the President banned all exports of Cocoa from Ghana.

Cocoa stakeholders tell their President they have 3 problems

• Interest rate in Ghana is between 18-20%
• Ghana imports dairy milk at a weak exchange rate
• Ghana imports sugar
The President says he will provide equipment financing for enterpreneurs who are ready to take the plunge. And subsidies for the importation of dairy milk and sugar.

Now I'm thinking, Nigeria would have been a market for the export of dairy milk and sugar to Ghana
Read 4 tweets
10 Apr
The entire process of exporting

• NEPC certificate
• eCO (Certificate of origin)
• NXP (Net export proceeds)
• Origin warehouse for export clearance certificate
• Acquiring bill of laden from shipping line
• Checks from FPIS, NAFDAC, FMARD for quality assurance
All these needs to be packaged into a course for SMEs in a drive for exports. Small businesses need lecture on

• Processing raw material into semi finished or finished products
• How to acquire a foreign offtaker
• Difference between LCs, credit line and offtake agreement
What I see often is governments train their ambassadors on key processes, policies and controls their resident companies doing business in a local country will have to undergo to succeed. In rare cases, the ambassadors even organize events where they make introduction
Read 4 tweets
22 Dec 20
In 2012 I flew with Vinay Mathani, the Group Managing Director & CEO of Churchgate Group on Arik Air from Calabar to Lagos, during our conversation, he told me that ''People always assume that our biggest business in Nigeria is Real Estate (because of the Iconic buildings)
On Lagos skyline, but our biggest biggest is actually fisheries'', I later discovered that Churchgate Group (A company that was founded in 1968) owns a subsidiary called Ocean Fisheries Nigeria Limited that does 6,000 tonnes of Shrimps per annum and exports to the Intl market.
Nigeria has a coastline of 853 kilometres bordering on the Gulf of Guinea & the Atlantic Ocean; the Coastline has the Niger Delta & the Strand Coast, the Niger Delta extends 500km from Benin to Imo River, the Strand Coast extends 85km from Imo River to Cross River Estuary.
Read 10 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!

:(