Dapo Awofisayo is an agriculturist who has carved a niche for himself in palm oil production. In this interview with Emmanuel Okogba, he speaks on how the palm oil business in Nigeria can get the attention it deserves and more. Excerpts…
Tell us about what you do
I am the Group Executive Director of CPL Group and Executive Director of Ore IRELE Oil Palm Company. CPL is a company with interests in Manufacturing, Healthcare, Agriculture, Real estate. Ore IRELE is a company with a 4000 hectare oil palm plantation and we process palm oil.
You could have chosen any other form of business to venture into but you chose oil palm, can you tell us the rationale behind that choice?
My focus has always been on essential businesses. Food/agriculture will always be essential. Which means it will always be commercially viable all things being equal. Oil palm fruits have multiple uses and there’s little to no wastage. Very interesting product when looked at closely. The sector also shows good resistance to external shocks like oil prices and Forex changes. It has been resilient throughout this pandemic. Its resilience through political and economic shocks really justifies my choice.
Do you think this sector is getting the kind of attention it deserves from investors, being that Nigeria with her over 200 million population does a lot of food consumption and palm oil is one of the essentials needed for food production?
Absolutely it is. The federal government under the administration of President Buhari and the CBN Governor, Godwin Emefiele has done a lot driving attention towards the sector. It’s the only thing Government can do. Don’t forget the market decides by itself where capital goes. More Private capital could go into oil palm if the FG and CBN can make cheap credit available. Agriculture needs patient capital and a patient investor. At going rates, there are better options for private capital than agriculture so that’s why you haven’t seen enormous activity. FG and CBN can make it happen. They achieved this with rice and can achieve same with oil palm.
What are the requirements for venturing into oil palm business and what are some of the challenges you have faced in the time you have spent doing this business?
Expert knowledge on plantation management is very important. The most important requirements are capital and patience. Challenges we typically face are multiple taxation is a major issue, pilfering of fruits is hard to stop, security challenges are there as well but have reduced seriously. For those in the business looking to raise capital, accessing agric loans is also a challenge.
Do you have plans/programmes to mentor those interested in palm oil production or are there investment opportunities for those looking to partner with you?
As for mentoring, there are no plans for that yet. We are still growing, trying to develop the company. Perhaps when we’ve reached the level of giants in the industry we will include that in our CSR.
How do intend to draw more awareness to the oil palm business/industry that has been under-reported and under-invested in, in Nigeria?
The only way to draw attention to an industry is by thriving, by being successful. Like I said, private capital directs itself to where good returns are guaranteed. The more companies succeed in this sector, the more people will be aware of the sector. You can’t market an economic sector, it markets itself.
A recent report by BusinessDay revealed that palm oil importation from Malaysia dropped by 24% due to the coronavirus pandemic. How can the palm oil production industry in Nigeria leverage on this opportunity to grow the business?
Most economic activities were affected due to the pandemic. I expect that this drop in importation is temporary, if the drop was due to the pandemic. With economic activities picking up, such importation will increase again. The local demand far outweighs the local production or supply, so that gap must be filled. Usually, importation fills that gap.
What are you doing to change the way palm oil production is done as we know it?
Palm production comes in two parts. You have the plantation and you have the processing. Plantation consists of planting, harvesting and maintenance while processing involves milling fruits that have been harvested. Majority of the labour goes into the plantation. Even with mechanized farming, you’d still need physical labour to do your planting, routine maintenance and harvesting. The processing is all motorized and mechanized so it involves little amount of labour. As technology evolves with time, it could further simplify our processes. However, for now we are not trying to reinvent the wheel.