Presco Plc, an Edo-based fully-integrated agro-industrial establishment with oil palm plantations, palm oil mill, palm kernel crushing plant and vegetable oil refining as well as fractionation plant, has demonstrated that the Nigerian government at federal and state levels are missing a lot by not mobilising investment from private sector players into the nation’s underutilized agric sector.
This is as the agro-allied company realised N23.47 billion as profit after tax (PAT) during the third quarter (Q3) ended September 30, 2023. The Q3’2023 profit represents an increase of 47.8 percent when compared with N15.87 billion the firm realised as PAT at the end of the Q3’2022.
The Q3’2023 PAT that Presco realised is more than the Internally Generated Revenue (IGR) of 20 states in Nigeria, when compared individually.
Stakeholders in the nation’s agric-value chain have enjoined policy makers to be more serious about the agriculture sector in view of the sector’s potential in terms of foreign exchange earnings, employment generation, inclusive growth in countries such as Indonesia, Malaysia, The Netherlands, among others.
It should be recalled that the gross domestic product of the agriculture sector grew by 1.5 percent in real terms at the end of the Q2’ 2023. Crop production sub-sector grew by 1.82 percent. Crop production accounts for 88 percent of the whole activities happening in the nation’s agriculture sector. The sector also employs a sizable number of Nigerians, especially in the rural and semi-urban areas.
Globally, demand for crude palm oil and associated products has been projected to grow from now through 2028, due to the rising demand for consumer goods in China and India, both of which have almost 3 billion inhabitants.
Meanwhile, Presco’s sales were boosted by the growing domestic demand for crude palm oil and vegetable oil because the firm indicated that all its earnings were generated domestically.
Presco’s Q3 revenue was up by 29.8 percent to N76.87 billion compared with N59.21 billion in the comparable period of 2022, and all the revenue was generated within the Nigerian economy.
Cost of sales continued to rise, mirroring the increasing headline and food inflation rates in the country. According to the firm’s Q3’2023 financials, cost of sales increased by 35.8 percent to N27.93 billion while in the corresponding period of 2022, Presco spent N20.57 billion on the same item.
Gross profit was N48.94 billion as of September 2023 against N38.64 billion as of September 2022, amounting to an increase of 26.6 percent.
Finance cost incurred by Presco rose by just 1.6 percent from January to September 2023 to N6.07 billion whereas it was N5.97 billion during the same period in 2022. Profit after tax as earlier stated was N23.47 billion at the end of the Q3’2023 as against N15.88 billion as of September 2022.
There are 20 states that did not generate up to N23.47 billion as IGR in 2022 according to the data published by the National Bureau of Statistics (NBS).
Cross River generated N21.10 billion as IGR in 2022. Jigawa generated N20.55 billion; Abia, N20.11 billion; Zamfara, N19.44 billion; Imo, N19.34 billion; Nasarawa, N19.28 billion; Borno, N19.06 billion; Kogi, N18,21 billion; Ekiti, N17.03 billion; Niger, N16.93 billion; Benue, N15.95 billion, and Plateau, N15.93 billion.
Others are Bayelsa, N15.90 billion; Gombe, N13.40 billion; Adamawa, N13.18 billion; Katsina, N13.05 billion; Ebonyi, N12.43 billion; Yobe, N10.46 billion; Taraba, N10.24 billion, and Kebbi, N9.15 billion.
Six of the above-aforementioned states, Cross River, Imo, Abia, Ekiti, Bayelsa, Ebonyi, are within the belt that palm oil business could thrive.
Realizing the potential of the oil palm business, Edo State, in the south-south geopolitical zone, has already attracted more than $500 million worth of investments into the state’s oil palm sector, with about 70,000 hectares of land allocated to investors under the Edo State Oil Palm Production Programme (ESOPP).
In Ondo State, the state government has successfully attracted oil palm investment through JB Farms, which invested on 10,000 hectares of farm land. Ellah Lakes also cultivated 5000 hectares of land, for the cultivation of oil palm and cassava in that state.
