Palm oil production in Nigeria holds significant importance both domestically and globally. Nigeria is one of the largest producers of palm oil in the world, with palm oil serving as a crucial commodity in various industries, including food, cosmetics, and biofuels.
However, despite its prominence in the global market, the country faces several challenges in the palm oil production sector.
One of the primary issues is the reliance on imports to meet domestic demand. Despite being a major palm oil producer, Nigeria still imports a significant portion of its palm oil needs.
This dependency on imports not only drains foreign exchange reserves but also undermines the potential economic benefits of local production. Importing palm oil comes with substantial opportunity costs, including missed opportunities for job creation, industrial development, and economic diversification.
In 2021, Nigeria imported $568M in Palm Oil, becoming the world’s 21st largest importer of Palm Oil. In the same year, Palm Oil was the 14th most imported product in Nigeria. Nigeria imports Palm Oil primarily from: Malaysia ($365M), India ($92.7M), China ($45.2M), Indonesia ($38.2M), and Singapore ($16.8M).
In the third quarter of 2022, Nigeria imported crude palm oil worth nearly 20 billion Nigerian naira (NGN) (roughly 43.4 million U.S. dollars) from Malaysia.
Nigeria’s palm oil imports from Malaysia, a leading global producer, increased by 65.3% in the first nine months of 2023.
Businesses like Presco Plc can play pivotal roles in addressing these challenges and maximizing the potential of palm oil production in Nigeria.
As a fully integrated company involved in palm oil plantations, processing, and refining, Presco exemplifies the benefits of vertical integration and value addition within the palm oil industry.
Presco’s Excellence
Local production offers numerous advantages over imports. By investing in domestic palm oil production, Nigeria can create employment opportunities in rural areas, where most palm oil plantations are located. This can help alleviate poverty and drive economic growth in these regions.
Presco Plc stands as a hallmark of innovation and excellence in the palm oil industry, boasting a fully integrated business model encompassing plantation management, processing, and refining. As of 2017, the company’s expansive operations spanned 16,812 hectares of prime land dedicated to palm oil cultivation.
At the heart of Presco’s operations lies its state-of-the-art infrastructure, including a palm oil mill capable of processing an impressive 60 tons of fresh fruit bunches per hour. Complementing this, the company operates a refinery or fractionation plant with a robust capacity of 100 tons per day, alongside a palm kernel crushing plant processing 60 tons per day.
Diversifying its product portfolio, Presco Plc offers a range of palm oil derivatives, including palm oil itself, refined bleached & deodorized palm oil, palm fatty acid distillate, and crude palm kernel oil. However, the company’s ambitions extend beyond its current offerings.
Looking toward the future, Presco has strategic plans to invest in rubber plantations, leveraging its expertise and resources to venture into new avenues of growth. Furthermore, the company aims to enhance the capacity of its palm oil mill and refinery, with targets set at 90 tons per hour and 500 tons per day, respectively.
Additionally, promoting local production reduces the country’s reliance on volatile global markets, ensuring a stable and secure palm oil supply for domestic consumption and export.
With its forward-thinking approach and unwavering dedication to quality, Presco is poised to lead the way in industry expansion and advancement for years to come.
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