Palm Oil

Taking palm oil production back to its roots in Equatorial Africa

BACKGROUND

Palm oil originates from Equatorial Africa although it is now largely produced in South East Asia. African production has lagged behind because most cultivation is undertaken by small farmers that lack the necessary skills, knowledge and access to required inputs to grow it; and have limited access to efficient milling facilities to process it.

A dual track approach, coordinating a large captive plantation and milling facility with an extensive smallholder outgrower scheme creates a profitable and sustainable business model.

THE PROJECT

Five existing plantations totaling 12,000Ha along the coastal belt of Guinea are leased. An outgrower scheme of equal proportion will double production in the next 5-6 year period.

Processing facilities already exist but have been mothballed by their previous operators and are currently under maintenance. Rehabilitation of these facilities is the first priority as the palm oil fruit must be processed within days of being harvested. There is a strong demand for the crude palm oil produced in India and other markets. Alternatively, it can be refined and sold into the local market.

DEVELOPMENT OUTCOMES

Guinea is the ideal location for an outgrower scheme because there is a plentiful supply of fertile land. Because palm oil takes 4 years to reach first harvest, smallholders need to have other land on which to grow other crops or adopt an inter-cropping model.

Outgrowers provide additional fruit to supply the mills and augment production. They are organized into cooperatives and given access to inputs, training and a reliable sales channel. Other outcomes include employment, social services and agricultural infrastructure.