Thread by @realkelvin07

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