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Reviving palm oil production: The Okomu success story

Palm oil refining and production has in the past, and in recent times become a lucrative business in Nigeria. In fact, some might refer to it as a ‘liquid gold’ that could potentially be the saviour of the Nigerian economy, improving its economic outlook in the International community and bringing it out of the doldrums that has plagued it for over three decades, however, Okomu Oil Plc has shown that this  is in fact possible.

At its just concluded 33rd Annual General Meeting (AGM), held at the Nicon Hilton Hotel in Abuja, the company published its financial records for the past fiscal year ended 31st December 2012 where a number of firsts were recorded.

The company demonstrated to its profitability to investors by paying the highest dividend in its history to shareholders.

The dividend payment of N7.00 per share of 50k, which is 29 per cent higher than the total dividend paid to shareholders in 2011, translates to a total payment of over N3 billion.

The company’s annual report, presented by Chairman of the Board of Directors, Mr. Gbenga Oyebode, declared that the company is in the process of expanding its oil palm and rubber plantation and has also begun expansion of its oil mill from 30 tons per hour to 60 tons per hour.

“More feathers were added to the company’s hat this fiscal year irrespective of the current negative economic circumstances prevailing in the country and in the world. The oil mill, which will be the largest in Africa, is scheduled for completion in 2014,” Oyebode hinted.

Okomu Oil has consistently posted profits in the last 10 years, a period during which most other agricultural initiatives in the country had either folded up or were performing sub optimally.

Shareholders are of the view that the company is inspiring, not just the growth and profitability, but the fact that the company is ranked 10th among listed companies with the largest turnovers quoted on the Nigerian Stock Exchange (NSE).

It is the only agric-business in the NSE’s top 16 companies with the largest turnovers. The company quoted Bottom Line Magazine, to define it as “the ninth company with the highest profits before tax among companies quoted on the NSE, and the only agro-business on the Exchange’s top 16.”

Okomu Oil Palm Company has come a long way since it was established in 1976 as a Federal Government pilot project aimed at rehabilitating oil palm production in Nigeria. Today, the company has been transformed into an economic success; earning commendations and recording over 300 percent rise in profit after tax (PAT) from the preceding fiscal year.

Also, it has since grown to become Nigeria’s leading oil palm company with 8,800 ha of mature palm, a young extension of 4,000 ha of rubber, and a palm oil mill of 30 tons per hour capacity. Just as it is expanding in size, its corporate environment is also expanding. Currently, the company employs over 800 permanent and several independent sub-contractors. All these have added up to place it on top in the burgeoning oil palm business and to position it as an emerging leader in rubber production.

Stakeholders agree that the privatisation of Okomu Oil has been a great success and a huge encouragement for the Nigerian agricultural sector for the future, with profound positive consequences of stable socio-economical growth for the region where it is implanted. The success of the company has further exemplified that palm oil production in Nigeria can be revived and rejuvenated with major players in the industry like Okomu Oil Palm Plc at the forefront of the palm oil revolution.

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