Economic Note: Adapalm, Ohaji in Imo State

Economic Note: Adapalm, Ohaji in Imo State

Monday, August 17, 2020 2:22 am


 

Steve Osuji and Adapalm, Ohaji in Imo State

Adapam

 

Adapalm

By Steve Osuji 

I drove past this sprawling palm tree estate this weekend and as always, it evoked tears…

Each time I visit this vast integrated palm plantation, probably the largest in Africa, I can’t help but get emotional.

I am often troubled to tears at what it is and what might have been. 

A little over 4,000 hectares of agric farm settlement which is part of the legacies of Dr. Michael Opara, has laid waste since its management was indigenized in 1987.

It has been suffering relentless piecemeal pillaging by series of little-minded governments that cannot envision the big picture.

This singular venture could yield revenues to Imo State to the tune of 10 times the funds she gets from federal allocation.

In 2019, about N90 billion worth of palm oil was imported into the country from Malaysia and Indonesia, largely for industrial use. Palm oil is the most consumed cooking oil in  the world, apart from its numerous uses in foods and pharmaceutical industries.

However, successive state governments have been unable to apply the rigour and acumen required to harness this investment optimally.

It is remarkable that two of the best performing stocks in the Nigerian Stock Exchange (NSE), Presco and Okomu Oil Plc, are palm oil processors like Adapalm.

Today, most of the palms are overgrown, (as can be seen in the picture) needing to have been replaced many years ago; the mill which was built by Governor Sam Mbakwe in 1983 is rusty and dysfunctional.

Dr. Michael Opara, Premier of Eastern  Region (1959- 1966) initiated the project in 1962. Ukpabi Asika  planted it in 1976 while Mbakwe built the mill and put it into production in 1983.

Adapalm has the capacity to employ over 3000 and fill the N90 billion per annum gap in crude palm oil demand in Nigeria.

But going forward, State government hasn’t the political will nor capacity to bring the huge investment out of the doldrums. A two-step retrieval process is recommended. First, an initial management lease is required to totally overhaul and prepare it for full privatisation to foreign core investors who must take it public in the shortest possible time. This way, it can be returned once again, to the status of a high-yielding concern.

 

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One Comment

  • Joyfort says:

    The situation with the oil palm industry in Nigeria is regrettable. So much of lip service but very little action. The factors that will accentuate growth have hardly been addressed except for the 9% interest fund provided by the CBN. Even that interest rate is high for green projects. However, Adapalm with over 4000hectares is becoming a medium sized company in Nigeria considering bigger plantations of Okomu, PRESCO, Wilmar, e.t.c. Also, a 4000hectare estate under the best management produces 16,000tonnes of Palm oil per year which is small compared to our demand supply deficit of more than 1.5million tonnes per year. This deficit has ever been with us and considering our oil palm industry growth rate will remain with us in the next 20years.

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