Ivory Coast’s SIFCA group will double its annual palm oil output to 500,000 tonnes over the next three years with technical and financial investment from Singapore’s Wilmar International (WLIL.SI: Quote, Profile, Research), SIFCA said.
It said that the increased output and the SIFCA group’s purchase of its own ship to improve regional deliveries should help reduce the reliance on Asian imports while also easing a deepening shortfall in palm oil across West Africa.
“With this project, palm oil production from Palmci (a part of the SIFCA group) will increase from 250,000 tonnes to 500,000,” Palmci Managing Director Angora Tano told Reuters at the weekend.
“Wilmar will bring its techniques and experience in boosting production from plantations and reducing factory and refining costs to make the finished product more competitive for a growing market,” Tano said.
SIFCA said West Africa’s deficit currently stands at 300,000 tonnes per year but it could jump to 500,000-600,000 tonnes if production is not boosted to meet growing needs in the region.
Ivory Coast, the world’s biggest cocoa grower, is Africa’s top palm oil producer with output of 390,000 tonnes last year. Many cocoa farmers are turning to palm oil, which they say is more profitable and less labour intensive.
SIFCA, a privately owned agro-industry company, has secured support from banks as well as Wilmar for a project that will see 40 billion CFA francs ($85.28 million) spent on building four new factories to improve processing.
A further 11 billion CFA francs will be spent every year providing agricultural inputs for farmers.
Output from plantations is expected to jump from 12 tonnes per hectare to 20 tonnes per hectare while small-scale farmers should see their yields improve from 5 to 12 tonnes per hectare.
REGIONAL DEFICIT
According to SIFCA, of all the palm oil producers in West Africa, only Ivory Coast produces enough to export as well as meet local demand. Ghana, Nigeria and Burkina Faso are still traditional buyers but Nigeria is a vast potential market.
SIFCA hopes that the new investments will help it tackle the twin challenges of a shortage in palm oil in the region and the tendency of Asian, rather than local, companies to fill the gap.
“South East Asia is the main exporter and their products have been flooding in for years … our aim is to take their place,” said Yves Lambelin, SIFCA’s managing director in Ghana, Liberia and Nigeria.
“We have developed a distribution strategy because we need to reach consumers from Senegal to Nigeria. We have bought a ship to ply the coasts to reduce the costs as road transport is expensive,” he added. ($1=469.0 Cfa Franc) (Editing by David Lewis, Editing by Peter Blackburn)
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