- Palm Oil as the New Crude Oil
Palm oil, which used to be Nigeria’s biggest export produce before the discovery of crude oil has now been adopted by Asian countries earning over $ $25.2 billion in exports.
Historically, Nigeria was the world leading producer of palm oil as at independence. But unfortunately, Indonesia and Malaysia have overtaken Nigeria. Today, Nigeria imports palm oil. With crude oil still the country’s major source of foreign exchange earning, the call to diversify the country’s revenue source has been a mantra over the years.
Palm Oil and its Purposes
Palm oil is gotten from palm fruit and is used as cooking oil. It is also used as raw material to manufacture margarine, non-dairy creamers, ice cream, soaps and detergents. In addition, it is used in the production of greases, lubricants and candles. More recently, the biofuels market has provided a significant new non-food use for palm oil where it is used as the feedstock for the production of biodiesel and as an alternative to mineral oils for use in power stations.
Furthermore, fatty acid derivatives of palm oil are used in the production of bactericides, cosmetics, pharmaceuticals and water-treatment products.
Value of Palm Oil Globally
Global palm oil market demand was 74.01 million tons in 2014 and is expected to reach 128.20 million tons by 2022. However, Nigeria presently produces at a deficit as local production and importation of palm oil into the country, presently stands at 55 per cent. However, with improved practices and technology, Nigeria could make more than $35 billion dollars from palm oil, if farmers followed the correct processing system.
Local Manufacturer’s Perspective
Speaking on the matter, the Chief Executive Officer, Red Palm Oil, Mrs. Eno Udoh whose company produces palm oil said: “In the early years, Nigeria used to be one of the largest exporter of palm oil, producing more than 40 per cent of the world production. The British administrators took the plant to Malaysia and they later surpassed Nigeria and are now the largest producers with Indonesia.
“Presently, there are small groups of people who harvest the wild palms using manual processing techniques. Majority of these groups are women in the village especially in Akwa Ibom.”
Udoh whose previous business venture was predominantly import-based said the exchange rate fluctuations forced her and others who were majorly importing to look inwards, saying that she decided to go into the business by setting up a factory in Akwa Ibom.
Udoh added: “Due to the recent economic issues in the country, I decided to look inwards. So I decided to go back home and look at what we can export to earn foreign exchange and what I can give to the community.
“Growing up, my aunt back in the village would always give us a keg of palm oil and so I decided to go into palm oil. Also, I enjoy the processing especially going through the process to see how you can get an organic refined oil. Also to the process that brings to organic low cholesterol process which is an extra process to be clarified. Low cholesterol is preferred by a lot of people because of health issues, which means it would cost double.
“Looking around, most people end up buying adulterated or mixed oil. The difference between my oil and others is that it is purely organic.”
Challenges and Potential
To export this product poses both challenges and rewards. The major challenge is that a lot of the farmers in the business still operate as small scale and in most cases, do not meet the required standard for export. Also, the documentation, certification, accreditation and packaging is a major obstacle for these farmers.
Udoh said: “I am still going through the process, but the Nigerian Export Promotion Council (NEPC) is encouraging people like us through capacity building and tools to empower us. Recently, the Chief Executive Officer, NEPC, Mr. Olusegun Awolowo had a seminar on packaging for export products and also encouraging us on how to go about exporting the products.
“Not until recently, agriculture was abandoned; everyone was going into politics and we had oil money so people weren’t thinking about agriculture. Now, reality has hit in and people are going back into the farms and agriculture is the big thing now.”
Furthermore she added: “As many hands go into agriculture, there would be more production of agriculture products which in turn increase variety of exportable produce and then creates multiple FX earnings for Nigeria.”
Speaking on the process it takes to export, she said: “It is not easy. There is a process and standard we need to meet and it involves a whole lot of money. It is not an easy process but it is a process we are going through. However, it is not difficult and it does not discourage others. NEPC is doing a whole lot to encourage us to export. The last time they brought in a Japanese man to talk on the right ways to package for export. They have given us a lot of tips and education on how best to get your goods ready for export.”
“I would want government to encourage the small scale farmers in processing, production and export. Government should provide land areas for rural farmers to encourage mass production of palm oil and also improve seedlings for small farmers and machines to process.
Request for Government Support
With the array of end products this fruit can get as well as the demand for it in the international market, various practitioners have argued that palm oil should be given attention, just like some other agricultural produce.
The potential in palm oil is huge and if the federal government decides to put in funds to aide farmers to produce, process as well as export, it would be a major foreign exchange income earner.
Udoh added: “There are so many things you can get from the palm fruit. The palm fruit cake is used as stock feed; the nut itself has oil as is used for pomade for the hair so it has so much functions.
“So this is something government should put in more money like they did in the north with ground nut. They should put in more money to grow more palm fruit type that takes less time to harvest. Malaysia that is leading in palm oil production now, got it from Nigeria. If governments are able to put in more funds into agriculture and palm oil especially we wouldn’t need to bring in engine oil, palm oil, soaps the list goes on.
“Governments could help give out mills to local governments or encourage palm farmers in processing. It would make things much easier in producing, she added.
Furthermore she posits: “I think government should put in more funds and educate those that are into palm oil, and help create an easy way. The palm process in the village is still very crude way and I might say not totally hygienic. The government can provide these machines and also educate farmers on how to use them.”
Bill Gates Sexual Harassment Allegations Bring Microsoft Under Spotlight
Shareholders of Microsoft have started pressuring the company to increase transparency over its sexual harassment history after recent allegations against Microsoft co-founder Bill Gates.
More than 75% of investors at the company’s annual meeting voted in favour of the tech giant publishing a report on the efficacy of the company’s sexual harassment policies, going against the company’s recommendations to reject the proposal.
Bill Gates, who is 66, resigned from the Microsoft board last year after an investigation was opened into a relationship that Gates had with a colleague, which started in 2000. This affair was only brought into the light in May this year, a few weeks after Bill Gates and Melinda Gates announced to the world their plans to get a divorce.
Since then, multiple reports have come out that Bill Gates, who co-founded the company had made repetitive unwanted advances to Microsoft employees after he and Melinda got married in 1994. Reports further stated that Bill Gates was warned about his inappropriate conduct back in 2008.
The shareholder proposal was submitted by investor Arjuna Capital, and made a call for Microsoft to put out a report on transparency which would contain details of investigations into the conduct of individual employees.
Arjuna Capital had mentioned that reports of Bill Gates’ inappropriate affairs and unwanted sexual advances made towards Microsoft employees have only magnified concerns, putting under question the culture which had been set by the very leadership of the company, as well as the role of the board in holding those responsible accountable for their actions.
The company board had encouraged shareholders to reject the proposal, with the argument that it was throwing more resources into fighting sexual harassment. It is rare to see shareholder proposals that are strongly opposed by the company pass by such a large margin.
Natasha Lamb said that while the accusations against Bill Gates are only the most recent revelations in what has been a long-standing problem, it is significant and encouraging that Microsoft is now listening to shareholders while committing to transparent and unbiased reporting.
HFMP And FMN Combination: The Making of A National Champion
The contribution of key players in the Nigerian food industry has grown in value and relevance over the years. According to a report by the World Trade Organization (WTO), Nigeria is ranked as the largest food market in Africa, with significant investment in the local industry and a high level of imports. As of now, the food and beverage sector is estimated to contribute 22.5% of the manufacturing industry value, and 4.6% of Nigeria’s GDP. In another report compiled by PricewaterhouseCoopers (PwC), it was confirmed that the food sector brought in an average of 57% of Gross domestic product (GDP) and generated 64.5% of export earnings.
Founded in 1972, Honeywell Group began as a food trading company servicing the West African region before pivoting to importing a variety of goods for the domestic Nigerian market. Now operating an investment holding company based in Nigeria, Honeywell Group Limited has diversified its business l into different sectors which are referred to as portfolio companies. The Group has evolved to become an investment company participating in major sectors of the Nigerian economy including foods, real estate, leisure and hospitality, energy, infrastructure, and financial services.
Honeywell Flour Mills Plc (HFMP), one of the portfolio companies of Honeywell Group Limited and a market leader in milling, processing & packaging of flour and other wheat-based products in Nigeria has continued to contribute immensely to the growth and performance of the Nigerian economy. With over 20 years of experience, HFMP has gathered extensive knowledge and skill in the production of flour and a range of flour-based products. The company has superior operational efficiency and remains a dominant player in the food industry in Nigeria.
Operating on a total installed capacity of 2,610 metric tonnes per day, HFMP manufactures a variety of products from wheat meals, semolina, noodles, superfine flours to spaghetti, macaroni, brown flour, amongst others.
During the company’s recent Annual General Meeting (AGM) which was held on October 14, 2021, the company recorded an all-time high revenue of N109.5 billion, an increase of 36% over N80.4 billion for the financial year ending March 2021. The company’s Operating Profit also grew faster than revenue at 39%, from N5.4 billion in FY 2019 to N7.6 billion in FY 2020.
Just recently, the Honeywell Group Limited announced the signing of an agreement with Flour Mills of Nigeria Plc (FMN) on the proposed combination of Honeywell Flour Mills Plc and Flour Mills of Nigeria, another leading Nigerian food manufacturer to further enhance food security in the country and create a more resilient national champion in the Nigerian foods industry. This agreement will have Honeywell Group Limited dispose of a 71.69% stake it has in HFMP to FMN.
Building on the achievements and improved performances of HFMP and FMN year-on-year, it can be seen that this is a combination of two giants in the food manufacturing industry in Nigeria. With more than the 85-year combined track record of both companies and their shared goal of making affordable food available to Nigeria’s population, stakeholders will benefit from this combination in numerous ways.
Based on the scale of the transaction that will be carried out by the consolidated company, this will provide employees with more career development opportunities in a larger organisation, with the potential to create more jobs in the economy. Customers will also benefit from access to a wider product range and an even stronger stream of innovation that can only be delivered by a combined entity with stronger teams and financial muscle. In addition, Nigeria and its food security agenda will benefit from both companies’ focus on developing Nigeria’s industrial capability, its agricultural value chain and specifically backward integration of the food industry.
The proposed combination will bring together two trusted and entrenched brands, creating a single entity of becoming a national champion in the food manufacturing space that is better positioned to benefit the growing Nigerian population and leverage opportunities stemming from the African Continent Free Trade Area (AfCFTA).
As this deal comes to a close, Honeywell Group, a leading investment company is setting its sights on the journey of refining and growing its investment portfolio. This will see it consolidate in sectors where it currently operates, such as real estate, energy, financial services, infrastructure. The company also intends to announce more strategic initiatives in the coming months.
MTN Nigeria Begins Sale of 575 Million Shares to Retail Investors
Telecommunication giant, MTN, will today begins the sale of up to 575 million shares held in MTN Nigeria by MTN Group to Nigerian retail and institutional investors.
The announcement of the sale is coming a week after the company disclosed that the Security and Exchange Commission (SEC) had approved its offer for sale of up to 575 million ordinary shares by way of a bookbuild to qualified investors (Institutional Offer) and a fixed price to retail investors (Retail Offer).
The company’s Chief Executive Officer, Karl Toriola, talking about the sale of the shares yesterday in a press conference clarified that the sale of the shares was never an initiative of funds raising but an attempt to deepen the company’s shareholding and in order to enable more Nigerians to partake in the prosperity of the company.
“The offer opens at 8:00am today and is scheduled to close at 5:00 pm on December14, 2021. It is priced at N169.00 per share and the minimum subscription is for 20 shares and lots of 20 shares thereafter. The offer includes an incentive in the form of one free share for every 20 shares purchased, subject to a maximum of 250 free shares per investor. The incentive is open to retail investors who buy and hold the shares allotted to them for at least 12 months, post the allotment date,” the CEO said.
The retail offer is the first in Nigeria to be delivered via a digital platform. It aims to facilitate the maximum possible participation by Nigerian investors leveraging on technology. Similarly, It is the first time the company will invite subscription from the public nearly two years after it listed on the Nigerian Exchange Limited (NGX).
Speaking about the offer, MTN Group President and Chief Executive Officer, Ralph Mupita, said the offer was MTN’s strategic priority to create shared value. “In the last 20 years, we have worked diligently to connect 68 million subscribers onto voice and data networks and ensure that we deliver the benefits of a modern connected life. With this offer, we will contribute to the further deepening of Nigeria’s equity capital markets. It is the first in a series of transactions as MTN Group implements its plans to ensure broad-based ownership by reducing its shareholding in MTN Nigeria to 65 per cent over time. We thank the Nigerian authorities for the support we as MTN Group have received in the various approvals related to this Offer, and remain committed to playing our humble role in driving digital and financial inclusion across the country over the medium-term, ” he added.
Investors will be able to submit applications through the issuing houses, receiving agents (authorised stockbrokers and Nigerian banks) and online via a unique digital application platform, Primary Offer, administered by the Nigerian Exchange Limited.
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