Nigeria’s biggest palm oil makers in the first nine months of the year, posted a combined revenue higher than what they have generated the same period in the last six year, as they continue to ride on government protectionist policies banning oil palm imports to boost their sales.
Despite the turbulent year accompanied by a global pandemic that disrupted demand, as well as business activities, Okomu Oil Palm Company and Presco PLC, the largest players in Nigeria’s oil palm space, recorded a collective revenue of N37.52 billion, up by 22 percent from the N30.69 billion recorded the same period last year.
That’s their biggest combined revenue since 2013, the farthest financial year available on the Nigerian Stock Exchange, data compiled by Businessday shows.
Experts believe that the events of the year lined in their favour as the sale of their products which accounted for a major part of their revenue improved tremendously on the back of consumer’s preference for essential products rather than luxurious products.
Read Also: Nigeria’s palm oil imports from Malaysia drop 24% amid coronavirus pandemic
The growth recorded in the industry could be said to be further driven by the ban placed on accessing forex for palm oil importation into the country and the impact of the border closure exercise which has encouraged patronage of locally made products.
Okomu PLC had a revenue increase of 20 percent growing to N18.6 billion from N15.5 billion in the previous year, Sale of its products contributed the most to its revenue with N18.6 billion while its other income accounted for a marginal N1.22 billion.
Similarly, its gross profit grew by 24 percent to N16.4 billion in 2020 from N13.3 billion in the previous year. Its profit before tax improved by 12 percent moving to N6.81 billion from N6.09 billion in the same period of 2019 and after-tax payment of N1.81 billion in 2020, the firm recorded a profit growth of N4.99 billion, representing a 22 percent increase from the N4.11 billion achieved in the corresponding period of 2019.
Presco as well experienced stellar growth in its financial performance achieving a 56 percent increase in its profit for the period moving from N3.21 billion in 2019 to N5.03 billion in 2020 despite a 36 percent increase in its tax payment in 2020 worth N1.54 billion, as against the N1.13 billion paid in 2019.
Its revenue and gross profit as well experienced remarkable growth with a 24 and 27 percent increase respectively. In 2020 Presco’s revenue grew by 24 percent to N18.9 billion in 2020 from N15.1 billion in the corresponding period of 2019. Its gross profit in 2019 was N9.3 billion, however it experienced an upward tick to N11.9 billion in the period under review its profit before tax surged by 51 percent to N6.57 billion in 2020 from N4.35 billion in 2019
In Nigeria, the demand for palm oil is predominantly propelled by household consumption as 90 percent of palm oil consumption comes from the food industry while the nonfood industry accounts for 10 percent.
Also, products like noodles, vegetable oil, biscuits, margarine, shortenings, cereals, baked items and cosmetics thrive on palm oil.
Since losing its position as one of the world’s largest palm oil producers, Nigeria is yet to recover as a giant in the crude palm oil-producing nations, presently according to Worldatlas, Nigeria is ranked the fifth position among the top palm oilproducing countries in the world with 970,000 metric tonnes out of the 2.1 million metric tonnes of local demand.
