'Agric Can Return as a Major Contributor to Nigeria's GDP'
Economic experts and students of Nigeria's economic history have over the years continued to lament about the declining contributions of Agriculture to the nation's Gross Domestic Product (GDP) since the 1960s. Gone were the days when agriculture contributed over 60 per cent of the nation's GDP. The groundnut pyramids had disappeared, just as cocoa exports paled into insignificance. All this as result of the overarching role of crude oil production and exports in the Nigerian economy. Successive Nigerian governments had recognised the need to rectify the situation of economic imbalance but most of their efforts failed to rise beyond rhetorics. The need to diversify the Nigerian economy became not more than a clich�.
There seems to be hope on the horizon, if the efforts and successful performance of The Okomu Oil Palm Company Plc is anything to go by. This company has consistently posted profits in the last 10 years, a period during which most agricultural initiatives had either folded-up or were performing sub-optimally. What is most inspiring is not just the growth and profitability of the company but the fact that The Okomu Oil Palm Company Plc is ranked 10th among listed companies with the largest turnovers quoted on the Nigerian Stock Exchange (NSE). According the June-July issue of the Bottomline magazine, The Okomu Oil Palm Company Plc is the ninth company with the highest profits before tax among companies quoted on the NSE, and the only agri-business on the Exchange's top 16.
Twenty-eight years ago when the The Okomu Oil Palm Company Plc seed was planted, very few investors had faith that it would germinate into an oak tree. But today, what is now known as The Okomu Oil Palm Plc has transformed into an economic success, earning presidential commendation and recording over 300 per cent rise in profit-after-tax (PAT) from the preceding year to the one.
Ahead of its recent 24th Annual General Meeting in Abuja, the Board of Directors visited President Olusegun Obasanjo who had been following developments in the agricultural sector being a farmer himself. He spoke glowingly of Okomu Oil's consistency and growth and urged other stakeholders in the industry to follow the company's example. From a PAT of about N156.7 million in the 2002 financial year, the company recorded about N493.2 million at the end of 2003.
At the 24th AGM, the company's Chairman, Mr Gbenga Oyebode, MFR, said the relative economic and political stability during 2002 created a favourable operating environment for The Okomu Oil Palm Company Plc. He noted that Okomu Oil has benefited considerably from Federal Government's continued policy of restricted imports and tariffs on cheap imported vegetables oils from the Far East.
Oyebode projected that the Nigerian economy would soon start to reap parts of the benefits from the New Partnership for Africa Development (NEPAD) in the coming years. NEPAD recognises the importance of agriculture and aims to eliminate most of the structural constraints by emphasising that improved agricultural performance is not only essential for food security and rural development, but also a prerequisite for economic development.
In 1976, The Okomu Oil Palm Company Plc began life as a Federal Government project. Prior to its incorporation on December 3, 1979 as a limited liability company, it was operated as a government pilot oil plantation project following the report of SOCFINCO (its technical partners) to the Federal Government on the prospect of rehabilitating oil palm production in Nigeria in which Okomu was identified for the establishment of a modern agro-industrial estate.
At inception, the pilot project covered a surveyed area of 15,580 hectares out of which 12,500 hectares could be planted with oil palm. The Okomu Oil Palm Company Plc was incorporated in 1979 with nominal share capital of 500,000 to take over the assets and liabilities of the pilot plantation project with effect from January 1, 1981 and to further develop the estate.
The first phase of The Okomu Oil Palm Company Plc development plan involved planting 7,500 hectares of oil palm, construction of a 20-tonne fresh fruit bunches (FFB) oil mill and provision of necessary infrastructure. In 1985, the Federal Ministry of Agriculture through the Palm Produce Board provided the then Okomu Oil Palm Company with 1.5-tonne FFB/ hour oil mill. The capacity of the mill was later increased to 5-tonne FFB/hour.
As part of efforts to shore up its revenue base, the company began to process its FFB after it acquired and installed a 1.5-tonneFFB/hour mill in 1985. Prior to the installation of the mill, the company derived its revenue from the sale of FFB.
By December 31, 1989, 5,055 hectares of the estate had been planted. Infrastructural developments on the estate at the period included office blocks, workshops/stores, staff quarters, a petrol station, a powerhouse and a primary school for children of the company's staff. In 1990, The Okomu Oil Palm Company was privatised on behalf of the Federal Government of Nigeria by the Technical Committee on Privatisation and Commercialisation (TCPC).
Going into the millennium, the total FFB harvested in 2003 rose to 96.511 metric tonnes. Compared with the 81.021 metric tonnes in the year 2002, it is an increase of 19.1 per cent. Average yield over the total area harvested in 2002/2003 year 13.65 metric tonnes/hectares.
As at December 2002, world price for oil palm stood at N65 per kilogramme. This has been beneficial to the company in particular and Nigeria in general. The company has since added 4,000 hectares of rubber and an oil palm mill of 30-tonnes of FFB/hour.
The Okomu Oil Palm Company Plc has continued to post favourable returns since its inception, leading other agri-produce businesses listed on the Nigerian Stock Exchange. Shareholders of the company were very pleased to receive the Report of the Directors of the company at the 24th Annual General Meeting held in Abuja after the Board's courtesy call on the President.
At that event, Oyebode disclosed that "the palm plantation performed well in the year 2003. At the end of the year, the mature area rose to 7.073 hectares. Although rainfall was 27 per cent below average in the year 2003, fruit yields were still maintained at better production levels than they were in 2002."
Oyebode further said that "the tapping of rubber in Extension I was better in the last quarter of the year and the total production for the year was 789 metric tonnes."
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