12/2/2004 BUSINESS TIMES - SEVERAL Malaysian plantation companies areinterested in expanding their operations to Nigeria which needs up to US$3billion (US$1 = RM3.80) in foreign direct investments in the next 10 to 15years to reinvigorate its oil palm sector.
Nigeria's African Investment Development Agency chairman Dr Bode Kalejaiyesaid the companies are currently in talks with the Nigerian authorities onstarting a base in the country. The agency is a trade and investment armof Nigeria's Federal Ministry of Foreign Affairs.
"We have invited several oil palm producers from around the worldincluding from Malaysia to invest in our oil palm industry by opening newor turnaround existing estates, setting up mills or refineries," Kalejaiyetold reporters in Kuala Lumpur yesterday.
He was met on the sidelines of a conference on "Attracting Foreign PrivateInvestors into Nigeria's palm oil industry".
"Most of the Malaysian companies have expressed interest in buying new ortaking over existing oil palm estates," said Kalejaiye. He, however,declined to name the companies involved.
Currently, there are no Malaysian plantation companies operating inNigeria. The country has about 10,000ha in oil palm plantations owned bythe Government, private companies and smallholders. Malaysia, incomparison, has more than 3.6 million ha in planted area.
Nigeria is currently the world's third-largest producer of palm oil behindIndonesia (second) and Malaysia (first). Coincidentally, Malaysia's firstoil palm seeds originated from the African country more than 100 years agowhen they were brought to Malaysian shores mostly by British, Indian andChinese traders. Oil palm is a native crop of Nigeria mostly in coastalareas and is a staple crop for millions of its people, especiallysmallholders. Nigeria has a population of over 120 million. It was only inthe 1960s that Malaysia developed the commodity in a serious way underthen-Prime Minister Tun Abdul Razak Hussein.
As at 2003, Nigeria was one of the world's top producers of palm oil atmore than 790,000 tonnes, or 6.4 per cent, of Malaysia's total 2003 palmoil production of 12.2 million tonnes.
"There is enormous opportunity in Nigeria's oil palm sector because it isthe gateway to other African countries in the continent," said Kalejaiye.The African continent palm oil market is estimated to be valued at overRM1 billion a year.
"Malaysian companies could benefit because Nigeria is nearer to theEuropean market and (the country's) soil conditions are similar if notbetter than in Asia," said Kalejaiye.
Many Malaysian plantation companies have ventured overseas in recent yearsbecause industry experts said the country is expected to be the mostcostly producer by 2010 and in terms of competitive edge, it is cheaper tooperate outside of the country.
Malaysia exported 750,492 tonnes of palm oil and its products to Africalast year, accounting for 6.1 per cent of Malaysia's total palm oilexports of 12.2 million tonnes to more than 140 countries.
Over 40 countries from the African continent bought the commodityamounting to more than RM1.2 billion. Other major oil palm producersinclude Indonesia, Ivory Coast, Columbia and Thailand. Many Malaysiancompanies had in recent years ventured abroad such as in Indonesia, PapuaNew Guinea and the Netherlands either as a grower, refiner or a miller.