Agro-industrial giant and consumer goods maker, PZ Cussons Nigeria Plc has begun discussions with the Imo State government over its possible takeover of unprofitable Ada Palm Plantations at Ohaji, near Owerri.
The company’s move is an extension of its 2012 very successful PZ-Wilmar joint venture backward integration in the Cross River State’s oil palm business, which has been adjudged the best example of backward integration in the country.
PZ and Wilmar undertook a $650 million joint venture backward integration on the 54,000 hectares of palm plantations in Cross River State, which would soon begin oil milling at different plantations of estates in Calaro, Ibiae and Biase.
Wilmar International, a Malaysian oil palm giant, which took over Cross River’s 54,000 hectares estates of palm plantations had entered into the joint venture with PZ Cussons valued at over $650 million.
An ultra modern oil palm refinery has already been built in Lagos under the two companies’ joint venture.
Ada Palm (Agricultural Development Authority Palm), located in Amafor, Ohaji in Ohaji/Egbema Local Government Area of Imo State, occupying 4,000 hectares of land, was developed in early 1980s by late Sam Mbakwe, first civilian governor of old Imo State.
After early successes in the 1980s up to 1990s, the estate went into the doldrums, until in 2011 when Governor Rochas Okorocha said he privatized it to the Roche Group at a whopping N3 billion.
Since then, the vast palm estate has been mired in problems, ranging from huge unpaid severance benefits to hundreds of retrenched workers, monthly salaries for those retained, community royalties, among others.
According to the PZ Cussons, a fast moving consumer goods company (FMCG) in a reply to inquiries by BusinessDay, the move to takeover Ada Palm Plantation is “part of our backward integration drive.”
Tahir Mohammed, general manager, external affairs of PZ Cussons told our correspondent via electronic mail that the company has “started an exploratory discussion with Imo State Government, at the highest level, on the possibility of a joint partnership to revive the old Imo Oil Palm Plantation, Ada.”
It was reliably gathered that the first top level meeting took place at the Government House, Owerri, between a PZ Cussons team led by Santosh Pillai and the state government led by Governor Rochas Okorocha.
In addition, the consumer goods giant would start a robust small holder scheme; saying that discussion on the partnership initiative “has been very encouraging; we are looking forward to a positive outcome.”
It is yet early to state the financials of the impending partnership over Ada Palm.
Meanwhile, Imo State government said it is willing to partner PZ Cussons to establish a palm oil refinery plant in the state, as well as set up palm plantations across the three senatorial zones of the state, as part of its efforts to diversify the economy of the state.
Governor Okorocha told the management of PZ Cussons at Government House, Owerri that his administration has established a taskforce on palm plantation, to ensure that every community has at least a hectare of palm plantation.
Santosh Pillai the leader of PZ Cussons team expressed the company’s readiness to partner with the state government to resuscitate its agro industrial sector; noting that Imo State was a major player in the export of palm oil produce in the late seventies.
He spoke of their determination to revitalize the palm industry in the state and Nigeria at large, and as such, reduce import and increase export of palm produce.
Imo State is among Nigeria’s largest oil palm producing states, particularly before the Nigerian Civil War when the country’s 645,000 metric tons was the world’s biggest oil palm production.
Today, Malaysia, with its 18.9 million metric tons, has overtaken Nigeria in oil palm production, and is the world’s largest oil palm producer.
Nigeria manages with 350,000 metric tons, with a domestic consumption of 1.3 million metric tons to 1.6 million metric tons.
BEN EGUZOZIE
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