Edo State-Sime Darby cooperation in oil palm plantation would create new opportunities for developing agriculture and infrastructure to support farming. Sime Darby’s investment is needed to sustain agriculture and improve productivity and livelihoods in Edo State. Sime Darby investment in oil palm business in Edo State would support local farmers and households can be involved in palm oil production and this would have major improvement for the livelihoods and food security of many people n Edo State. Sime Darby and Edo State government envisioned a global marketplace based on socially acceptable and environment-friendly production and sourcing of palm oil. They aim to encourage increased demand for, and use of, goods produced using such practices
Everything seems to point at the possible expansion of oil palm plantations in Edo State revitalizing old ones and establishing new ones- both aimed at the national and international market. Local communities should be aware that local and state governments may in the future – as NIFOR demands- “provide land areas to oil palm farmers to encourage mass production of palm oil.” The increasing imports of palm oil -widely used by the Nigerian people as edible oil- may help to explain the recent Sime Darby and Edo State government’s interest in palm oil production. In general terms, Edo State government is currently establishing enabling environments for large-scale corporate investments in industrial palm oil production, in many cases within the broader framework of export-oriented agrofuels and agricultural commodities.
With better management practices, the palm oil industry could provide benefits without threatening some of our most breathtaking natural treasures in Edo State. Sime Darby and Edo State government will work on a number of fronts to achieve this, including:
Defining, implementing and promoting better practices for sustainable palm oil production, which is a large, international group of palm oil producers, palm oil buyers, and environmental and social groups
Encouraging companies to use certified sustainable palm oil in the products they make and sell
Eliminating incentives for palm oil production that lead to the destruction of forests
The leader of the Malaysian delegation announced the intention to establish an oil palm processing refinery shortly after visiting Governor Obaseki of Edo State. He revealed that it was the intention of Sime Darby Plantations to bring some of the new technological know-how in oil palm processing to the state and regretted the state of obsolete equipment in some of the oil estates visited.
So everything seems to be set for this investment. There are however two questions that need to be posed. The first one is related to the Malaysian firm itself: what is Sime Darby’s business? According to the company’s own web page, it is “Malaysia’s largest and oldest conglomerate” and “owns or has interests in more than 270 companies, primarily in Asia. Its core business activities include the distribution of autos (BMW, Ford, Land Rover) and heavy equipment (Caterpillar); the manufacture of finished rubber products (mainly tires); plantations (oil palm, rubber, cocoa, and fruit crops); property development; and trading. Sime Darby is also acquiring generation assets.”
In relation with oil palm, the following is revealing: “The company is trusting that the diversity of its holdings will secure growth. While palm oil prices are falling, hurting the plantation business, there is increasing demand for Sime Darby-supplied automobiles and heavy equipment.” The second question is related to oil palm itself. Oil palm plantations are spreading throughout the tropics and in all cases where large scale plantations of this crop are implemented.
Edo State Governor, Mr. Godwin Obaseki, has said the state is ready to commit between 100,000 to 150,000 hectares of land to the cultivation of oil palm plantations over a period of five to ten years.
Obaseki disclosed this when he received Malaysian investors who were on a business visit at the Government House in Benin City, Edo State.
Obaseki said his administration is determined to expand the total land available for oil palm cultivation in the state from the current 40,000 hectares to between 100,000 to 150,000 hectares of land.
He said, “The state is the home of oil palm cultivation in Africa with the three biggest oil palm producing companies located here. At a time in history, huge revenue accrued from oil palm production was used to drive development before the discovery of crude oil, which is no longer sustainable. Returning to oil palm production for us in Edo is the way out.”
The governor noted that his visit to Malaysia in October 2017 was to see how the state can use proceeds from oil palm cultivation to transform her economy using the development model perfected in Malaysia and the entire South East Asia, adding, “My administration intends to take advantage of progress made in cultivating high yield varieties of oil palm in Malaysia and South East Asia, to attract more benefits and transform the economy of the state.”
He maintained that “In this part of the world, we have climatic condition similar to Malaysia, which makes the state suitable for cultivating oil palm.”
Obaseki noted that his administration had entered into agreement with Proforest to conduct audit of all the state’s forest assets, noting, “We are keen on re-building some of the forest parks and restoring some of the species we are fast losing.”
Head, Sime Derby Renewables, Azli Razali, who led the delegation of Malaysian investors on the business visit, said that they were in the state to explore business opportunities and seek possible ways to partner with the Edo State Government on oil palm production.
Razali said, “The team of investors from Malaysia considered Edo State a choice destination for cultivating oil palm and the business visit presents opportunity for them to explore the state’s forest assets.
On his part, Principal Sustainability Officer, Sime Darby Renewables, Carl Dagenhert said, “Expanding the land bank for oil palm cultivation is crucial for effective oil palm plantation. Africa is the largest market for oil palm cultivation which is the reason why Sime Derby Renewables is seeking investment opportunities in Africa.”
In Nigeria, oil palm is indigenous to the coastal plain, having migrated inland as a staple crop. For millions of Nigerians, oil palm cultivation is part of the way of life –indeed it is part of their culture. However, during the past decades the country has become a net importer of palm oil. While in the early 1960s, Nigeria’s palm oil production accounted for 43% of the world production, nowadays it only accounts for 7% of total global output.
In Nigeria 80% of production comes from dispersed smallholders who harvest semi-wild plants and use manual processing techniques. Several million smallholders are spread over an estimated area ranging from 1.65 million hectares to 2.4 million hectares and to a maximum of 3 million hectares.
