Oil palm growers to replant 1.5m hectares on rising appetite

Oil palm growers are planning to replant 1.5 million hectares of land over the next five years across the 27 oil palm producing states in Nigeria.

This is targeted at leveraging the rising local and global palm oil demand and driving foreign exchange earnings through export.

The initiative, developed by the Oil Palm Growers Association of Nigeria (OPGAN), is contained in the Oil Palm Development Strategy for Nigeria 2024 – 2029.

The plan also aims to propel Nigeria’s palm oil industry from its current fifth position to third in global palm oil output.

It equally targets revitalising and elevating Nigeria’s palm oil industry to drive job creation and economic growth.

Joe Onyiuke, president, Oil Palm Growers Association of Nigeria, told BusinessDay in Abuja that this is the first time a commodity organisation is formulating a comprehensive strategic plan tailored to a subsector’s unique needs and aspirations.

“In the annals of Nigeria’s agricultural landscape, the oil palm industry stands as a cornerstone of economic prosperity and agricultural advancement. Yet, amidst its significant contributions, there exists a palpable gap in the strategic framework for its sustainable development,” he said.

He noted that the group has embarked on a journey to bridge the palm oil gap and propel the industry into a new era of growth and resilience.

Onyiuke noted that the strategy “delineates the challenges that have impeded our progress, from inefficient land use practices to market volatility, and presents actionable recommendations and modalities to surmount them.”

Nigeria was a lead exporter of crude palm oil in the 1960s. It is currently the largest consumer of palm oil in Africa, according to the World Bank. While it consumed three million metric tons (MT) of fats and oil in 2018, its output stood at 1.02m MT, translating to a gap of 1.92 million MT.

The United States Department of Agriculture (USDA), says that oil palm production in Nigeria reached 1.4 million metric tonnes (MT) in 2022, a nine percent rise from 2020/21 when production stood at 1.28 million MT. The local demand is estimated at over three million tons.

Nigeria is a laggard in the global palm oil market, where big names such as Malaysia, Indonesia, Thailand and Colombia play.

Indonesia earned nearly $23 billion from palm oil export in 2024, with others earnings big in the market.

Abdullahi G. Abubakar, director, Federal Department of Agriculture, Federal Ministry of Agriculture and Food Security said the ministry views the plan to plant 1.5 million oil palm hectares with utmost satisfaction.

“This document serves as a testament to the collaborative spirit and commitment to excellence within Nigeria’s agricultural community through those who are practitioners themselves. It is a testament to what can be achieved when stakeholders join forces in pursuit of a common goal.”

Palm oil investments grow

Nigeria’s palm oil investments are growing rapidly. As of 2018, PZ Wilmar had invested over $150 million in oil palm plantations in Cross River State alone, BusinessDay was told

PZ Wilmar, a subsidiary of PZ Cussons, has nearly 26,500 hectares of palm oil plantations in Cross River State. About 5,549 hectares (ha) of oil palm plantation are located in Calaro Estate, while 2,369 ha are in an area known as Calaro Extension. The firm also acquired Ibiae plantations with 5,595 ha; Ibad plantations in Akampa with 7,805 ha; Kwa Falls in Akampa Akpabuyo with 2,014 ha, and Oban plantations, also in Akampa, with 2,986 ha.

BUA Group and Alfa Laval PVT Limited signed a deal this month to construct a 1000 metric-ton-per-day (TPD) palm oil refinery and fractionation plant.

The deal was sealed at BUA Group’s Middle East office in Dubai, the United Arab Emirates (UAE), by Abdul Samad Rabiu, founder and executive chairman of BUA Group, and Panjak Maheshwari, vice president of the Food & Water Division Hub at Alfa Laval.

As of 2024, the United Nations Industrial Development Organisation (UNIDO) and the National Palm Produce Association of Nigeria (NPPAN) said they attracted a €300 million investment to Nigeria’s palm oil industry.

Alphonsus Inyang, president of NPPAN, said that UNIDO’s investment in the sector would boost local palm oil production and create over 300 jobs across the value chains.

“The main purpose is to stimulate investments in the real sector and to use technology to make the industry attractive to investors. For a long time, the oil palm industry in Nigeria has been stagnant,” Inyang said.

Also, Ellah Lakes is eyeing a slice of the palm oil cake. It plans to start production in the first half of 2025. The company is also targeting palm kernel oil production in the future as it looks to strengthen its revenue base.

Chuka Mordi, the company’s managing director, told BusinessDay during the annual general meeting in December 2024 that the firm would be producing palm kernel oil as it intended to acquire a palm kernel mill.

Okitipupa Oil Palm Plc (OOP), under the leadership Pink Nominee Ltd (PNL) – its new core investor – has acquired four state-of-the-art mills for its eight plantations across Ondo state to boost production.

Taiwo Adewole, managing director at OOP, said the acquisition of four high tech palm oil mills are part of a strategic vision to reposition the organisation as a major player in the oil palm value chain.

ig profit makers

Okomu Oil and Presco Plc, two agro-based companies listed on the Nigerian Exchange Group, achieved their highest after-tax profit in a decade in 2024 despite a challenging business environment.

These two agro-based companies were able to weather the storm of inflation and the naira devaluation to record the highest after-tax profit in a decade where Presco recorded 4088.7 percent growth and Okomu oil reported 1188.3 percent growth from 2015.

The highest oil palm commodity comes from Edo State because the land is very good for oil plantation and the best oil is recorded in that axis,” said Femi Oke, chairman of All Farmers Association Of Nigeria at Lagos/Southwest zone.