Okomu Oil Palm Company Plc – In the Palm of Their Hands
Okomu Oil Palm Company Plc faces a number of challenges, from infrastructure to coronavirus, but through collaboration, hopes to overcome them.
The company started in 1976 as a government plantation. In 1990 the company was made a PLC through an IPO, going on to become a public listed company on the Nigerian Stock Exchange. “We’re the largest producer of crude palm oil in Nigeria, with 15,000 shareholders including a number of local individuals and institutions, Nigerian, as well as international investors,” says Graham Hefer, Managing Director of Okomu Oil Palm Company.
The company has three separate plantations totalling 33,112 hectares, of which nearly 20,000 hectares are palm and 7,500 hectares are planted under the rubber. The remainder is under high conservation value forests and non-biological assets. The Company is also an agro-processing company, not just a plantation company.
“We have the largest oil mill in Africa, rated at 70 tons/hour at peak, and a rubber factory delivering 2.5 tons/hour of dry rubber. We’re also erecting two more oil mills to cope with the increased yields, adding 60 more tons/hour to our oil mills in the next two years,” Hefer says. “The company is not doing too badly. First-half earnings were positive despite the prevalence of Covid-19. Our crude palm oil (CPO) is all sold locally and all of our rubber internationally. We currently produce 48,000 tons of CPO/annum and this is set to double in the next three or four years. With rubber, we export 8,000 tons/annum and envisage getting to 10,000 tons/annum in the next few years.”
“Currently we’re the only large volume seller of CPO locally. We’re also proud of our three ISO certifications, 9001:2015, which is for management of quality; 14001:2015 for environmental management and 45001:2018 managing occupational health and safety. We’re also certified by the Roundtable for Sustainable Palm Oil (RSPO).”
A Valuable Part of the Community
“Okomu employs about 2,000 people permanently and at least another 2,000 semi-permanently, while indirectly providing jobs for another 5,000,” Hefer says.
This is one of the reasons why Okomu plays such a vital role in Nigeria’s economy.
“If we ceased to exist I think it would create a major vacuum within the State we reside in,” Hefer says.“Being one of two large oil palm companies residing in Edo State it would be a major blow to the economy because it’s a very agrarian reliant State and the knock-on effect would be devastating. Apart from employment, we work with 1,000 local suppliers and contractors who offer us goods and services, and those would also be negatively impacted if our company were to close down.
Beyond their role as an employer, Okomu Oil Palm Company Plc is also constantly working to support the communities they work within.
“In terms of the social aspect, we do lots of developmental projects with our neighbouring communities,” Hefer says. “We help with clinics, boreholes, schools, grading earth roads, bursaries, and the like. We spend around N150 million/annum working with communities and parastatals on their CSR projects.”
Holding Up Infrastructure
“Congested ports, lack of foreign exchange, a paucity of adequately skilled employees’ ambiguities in outdated laws all lead to difficulties in doing business, confusion and the potential for corruption. Lack of infrastructure such as power and poor roads add to our woes,” Hefer admits. “These limitations negatively impact potential investments and make the ease of doing business, difficult. But we’ve been around for 40 years so it can be done!”
But, how can it be done? That’s where Okomu’s knack for building relationships and collaboration comes into play.
“Well, firstly we talk with government and other interested and affected parties; form associations of like-minded people,” Hefer says.“The Plantation Owners’Forum of Nigeria (POFON)is a group of agri-businesses who work with the government to minimise difficulties companies face on the ground. The Manufacturers Association of Nigeria (MAN), another association, works together with private enterprise and government to make business easier in Nigeria.
Of course, the biggest challenge facing most businesses right now is the COVID-19 pandemic, and tragically Hefer knows first-hand how serious an issue that is.
“Unfortunately, through COVID-19 we have sadly lost two of our employees,” he says. “Its serious business and we’ve taken steps to minimise COVID-19’s influence, including hand-washing areas and face masks to minimise infections.
Fortunately, the safety precautions put in place seem to be paying off to a large extent.
“We haven’t had as many cases as we might have, only fourteen testing positive in the past few months, and all being asymptomatic,” Hefer says, “whilst COVID-19 has negatively affected us with lockdowns and higher costs, it’s worth it to make sure our people are, first and foremost, safe, even if it has an effect on our results.”
Looking beyond the pandemic, Okomu has big plans for the future. But that doesn’t mean blind expansion- the company is looking at how to minimize its impact on the environment.
Hefer says, “We’re going for vertical rather than horizontal expansion in future by using higher-yielding plants, rather than indiscriminately expanding horizontally and developing more land. The best would probably be to do both vertical and horizontal expansion, but at all times remain cognizant that we are big users of soil and water. That is why climate change is also a big issue for us since we are reliant on rainfall and soil for our future sustainability.”
“In terms of vertical and horizontal expansion of the company, we are also starting to integrate smallholder farmers into our expansion plans by providing them with training, seedlings and the like and offering them the ability to sell their product to us as a guaranteed off-taker of their product, thereby expanding our volumes and also assisting smallholders to develop as well.”