Wilmar's growth journey in Africa

Africa, with a projected population of 1.3 billion by 2030 and rapid economic growth, offers exciting business potential.

Wilmar entered Africa about 14 years ago through investing in two trading companies, making it the largest exporter of edible oils into East and South Africa. The group later diversified and undertook other agricultural projects in Africa.

Today, Wilmar has a footprint in 12 African countries, engaging in the cultivation of oil palm, rubber, edible oils refining and packing, specialty fats production, soap and detergent manufacturing, oilseed crushing as well as sugar plantations.

Oil palm projects
The group owns directly and through joint ventures over 58,000 hectares (ha) of oil palm planted area in West Africa and Uganda. The joint ventures also manage over 140,000 ha under a smallholders and out-growers scheme1.

Uganda was home to our first oil palm project. In 1998, the Ugandan government, with technical and financial support from the World Bank and International Fund for Agricultural Development, initiated an oil palm project in Kalangala, one of the remotest and impoverished districts in the country.

Together with our joint venture partner, we set out to develop a first class plantation and mill that would improve the locals’ livelihood, which at that time was mainly dependent on subsistence farming. Working closely with the district and local leadership, the joint venture contributed to local infrastructure developments including schools and healthcare services.

"Today, the project is held up in Africa as a model of success in achieving operational efficiency, while creating tangible and meaningful benefits to the host country and its people."

The next project was in Cote d'Ivoire through an investment in Sifca, the country’s leading agri-group, for large-scale rubber and oil palm plantations and processing plants, as well as smallholder schemes.

In 2011, with PZ Cussons, we made a successful bid for six plantation sites totalling about 27,000 ha in Cross River State, Nigeria through a tender process. Most of these plantations were first planted in the 1960s but abandoned in the 1970s. The rigorous tender process included a technical and financial bid submission that involved extensive negotiations and consultations with both the Cross River State Council on Privatisation and other key stakeholders, including local communities, before the acquisition process could be concluded.

The Group’s joint venture, PZ Wilmar, inaugurated the Calaro, Ibiae and Biase oil palm plantations in Mbarakom in November 2012. We have given an undertaking to the Cross River State government in Nigeria to develop a first class, large-scale and sustainable palm oil industry while at the same time, help the local community by building good schools and medical clinics, training staff as well as establishing an outgrowers scheme.

Our vision is to revive the palm oil industry in Nigeria and restore its past glory by investing in the entire palm oil value chain including plantations, mills, refineries and production of consumer pack edible oil. Establishing such a value chain would increase the country’s oil production to satisfy increasing local and export demand, as well as create employment opportunities.

Also in 2011, we acquired a 77 per cent stake in Benso Oil Palm Plantation Limited which owns over 4,000 ha of oil palm plantation in Ghana.

Oilseed crushing
Through joint ventures, we process palm kernel, soybeans, sunflower seeds and cottonseeds in South Africa, Zambia and Zimbabwe, Uganda, Cote d'Ivoire, Ghana and Nigeria.

Edible oil refining
Through joint ventures, we operate edible oil refineries in South Africa, Zambia, Uganda, Zimbabwe, Ghana, Nigeria and Cote d'Ivoire.

Consumer pack oils
We produce and sell branded consumer pack oils in Cote d'Ivoire, Uganda, South Africa, Ghana, Zimbabwe, Zambia, Ethiopia and Nigeria. The leading brands in most of these countries are owned by the Group.

Soaps and detergents
Our first operation in Ethiopia is through a joint investment with Repi Soap and Detergent S. Co, which engages in the manufacturing of soap and detergent products. Its quality products are marketed under a portfolio of consumer brands including Largo, Ajax, O2, ROL and Maya.

Sugar
We hold a 27.5 per cent equity stake in Cosumar S.A., Morocco’s sole sugar supplier and the third largest sugar producer and second largest refiner in Africa. It operates a refinery in Casablanca and seven beet and cane sugar mills in Morocco.

Positive outlook
With more than 60 per cent of the world’s unutilised agricultural land, plentiful mineral resources and a young and rapidly growing population, Africa has great potential for agricultural development and consumer markets.

Tapping into this potential requires a willingness to invest significant financial and human resources in long-gestation projects such as plantations, manufacturing plants and establishing branded consumer products. Companies with the patience and the right people to develop the projects successfully will be substantially rewarded.

1 http://www.rspo.org/en/smallholders

This article was written by Wilmar's Corporate Communications and Africa teams.

 

 

 

NTU-SBF Centre for African Studies

 

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