NIGERIA – Okomu Oil Palm, the main producer of palm oil in Nigeria has reported significant growth in Q1 2023, making a profit of 16.2 billion naira (US$23 million) and sustained its revenue growth trajectory from the previous year
The projection shows an increase of 41% compared to the 11.5 billion naira ($16.4 million) obtained a year earlier
Founded in 1979 in Edo State, Okomu Oil Palm mainly operates in the cultivation of oil palms, the processing of fresh fruit bunches into crude palm oil for resale, the plantation of rubber trees, and the production of rubber for export.
According to the company, this performance can be explained in particular by a 59% growth in turnover, which rose from 37.4 billion naira (US$54 million) to more than 59.3 billion naira (US$84.7 million).
In addition, the report states that this figure represents the highest revenue recorded by the company in the past five years and surpasses its five-year compounded annual growth rate of 24%.
Over the last 5 years, the palm oil industry in Nigeria has seen numerous private investments to meet growing consumption by both households and manufacturers.
However, despite increasing government intervention to ramp up production, palm oil imports into the country are still on the rise owing to the huge demand-supply gap.
Recently, Henry Olatujoye, managing director of Palmtrade and Commodities Development Nigeria Ltd said that the country’s palm oil import from Malaysia increased to 92,961 metric tons (MT) between January-April 2023 from 20,513 MT, a 353 percent jump.
But for Okomu Oil Palm, the underlying growth driver for the company has been price adjustment. In the 2022 financial year, for example, the company’s profit before tax for the year reached N23.52 billion, which was a significant 46% increase compared to the previous year.
This growth was primarily fueled by a 43% year-on-year increase in crude palm oil (CPO) prices and a 7% increase in rubber prices in a socio-economic context marked by inflation, which had reached an average of 21% during 2022.
In addition, the surge in turnover has reduced the negative effects linked to the 59% increase in taxes, which totaled 17.2 billion naira ($25 million).
“We have also minimized our production costs by commissioning a new 5-megawatt turbine, as an alternative means of electricity production to generate 44% of our energy needs in the main business sectors in 2022”, explains Gbenga Oyebode, director of the company.
On behalf of its new fiscal year 2023, Okomu Oil Palm wants to dedicate 1,700 hectares of additional land to oil palm and rubber plantations to improve its supply of raw materials over time.