Stakeholders in Nigeria’s Palm Oil industry are not a happy lot following a recent move by the PZ Cussons Company from the United Kingdom to start selling palm oil in bulk across the west African country.
PZ Cussons, a company dealing in the production of palm oil products, has decided to embark on large scale palm oil sales to Nigerians in what analysts interpret as a bid to manage the stiff competition it is facing from Indonesia in the international palm oil market.
Indonesia has several palm oil refineries which include PT Dharma Satya Nusantara, PT Multi Agro Gemilang and PT Nusantara Jaya. These refineries are said to produce what is considered to be the best quality refined oil, a characteristic that has wooed customers from other refineries.
Members of the Plantation Owners Forum of Nigeria (POFON) have bitterly complained that the plan to start this kind of business is a great threat to local palm plantations. They are now asking the government not to allow PZ to continue with the bulk sales.
THISDAY revealed on Tuesday that the foreign companies are keen on undercutting the Nigerian palm oil industry. With access to “cheap and subsidised” palm oil produced in their home continents and countries, they are cooperating with compromised persons within the finance and trade ministries to make way for their products.
The main concern by POFON is to the effect that the companies and some persons in government could be hatching a dangerous strategy that will allow the importation of cheap palm oil from Asia and dumping it in Nigeria. This could potentially kill Nigeria’s palm oil industry because locally produced palm oil products will find it hard to compete with cheap foreign products whose quality has equally been questioned by analysts. They will ultimately kill local plantations where many Nigerians have invested for years.
Palm plants in Nigeria are widely planted and harvested by small scale farmers who use manual methods to refine the fruits into the various products they want. A good number of Nigerians plant for home consumption.
PZ Cussons Claims…
But PZ Cussons justifies its move, claiming the local refineries are producing low quality palm oil which cannot compete in the market. Management at PZ Cussons recently stopped purchasing the product from local refineries, claiming they would rather spend money importing rather than purchasing poorly refined palm oil in Nigeria.
PZ Cussons merged with Wilmer, a company currently known as PZ-Wilmer 20 years ago to form the largest palm oil producing company. Currently the company supplies palm oil products to over 50 countries in the world, which constitutes 40% of the global total.
The company’s management is said to be working hard to convince government authorities in Nigeria to allow them invest N 100 billion in crude palm oil refining and plantation agriculture. They are sweet talking government officials by narrating how their plans are destined to contribute to business in Nigeria and improve the country’s economy, a claim POFON rubbishes and terms it a ploy to confuse the government.
The major question that analysts urge relevant government officials to ask is where the local palm oil will go and what will happen to the industry. Those against the PZ move say the government ought to defend Nigeria’s heritage and consider preserving the job opportunities that have been created by the local palm industry. They ask the authorities to think about the plight of the employees working in the local refineries most of whom could lose their jobs and soak into dens of biting poverty.
Down Nigeria’s Palm Memory Lane
Palm oil plants were discovered along the river banks of Nigeria as early as 1828. In the western part of Nigeria, the plant was discovered growing in dense and wetter parts of the region. Since its discovery, it has been widely used for home consumption and export.
Red palm oil is massively used in Nigeria in soups and other vast meals. It is mixed with cassava and yam to make delicious soups. Its use worldwide however, comes varied and diverse. It is usually refined to produce cooking oil, ghee, margarine and biscuits.
The country started exporting palm oil as early as1830. By 1911, Nigeria was leading worldwide by producing 75%. The British administrators, who were the country’s colonial masters by then, exported the plant to Malaysia where they also built a refinery which did so well that it became the leading in the world in terms of palm oil production.
During the early seventies, the Nigerian government received sponsorship from World Bank to construct a refinery. State owned Oil Palm Company was the first to be constructed. It was slowly followed by others like Okumu Oil Palm Company in 1973, Damian Oil Palm Company and Presco plc Company.
Palm oil generates significant amounts of vitamin E, a vital vitamin with capacity to fight diseases in the body. It also contains high levels of carotene.
In many countries, palm oil is used to balance the content of the saturated and unsaturated fatty acids. Palm kernel, a bi product of palm oil can be used to produce concentrated foods and supplements in animal food.
This story has been updated from the initial version, based on a clarification sent to Bizrika by POFON.