Olabode Abiodun Omiyale, the Chief Executive Officer of Duke Farms, a palm oil manufacturing industry located in Ikire, Osun state with operational office in Ibadan, speaks with FAVOUR DAVID-BOLADE on economic value of palm oil production, financial constraints, why southwest is his target and other issues.
What do you do in your farm?
We are involved in the entire chain value of palm oil industry from nursery till the production of palm oil. Basically that’s what we do. I coordinate the entire business activity from setting strategy to driving the daily operations of the business. Presently, we market by words; we speak to businesses that use palm oil like restaurants, schools, Garri processing companies etc. and sell to them.
How would you say palm oil can help the economy?
Right now there is a supply gap in the market and we therefore cannot attain maximum economic potentials. We can’t keep importing palm oil into the country if we want to use it to boost economy. Increasing our production means we import less and that will lead to creation of employment opportunities. Nigeria needs an average of 2.5 million metric tonnes annually and we produce about 1.4. So we have a gap and we can’t meet up with the demand. I must add that about 90 per cent of things we consume in the supermarket have palm oil in it. So that’s how huge the demand of palm oil is industrially and domestically. It’s an industry that can’t be overlooked.
How has government helped the palm oil industry?
From information available to me, Central Bank of Nigeria (CBN) has been trying to help but most of the funding has actually not trickled down to small holders who actually produce and own 70 per cent of what we have in the market; the gestation period of a plantation is about five years, although it would start fruiting from around the third year and is usually capital intensive for small holders who probably don’t have that information required for them to get funding. So most of the support have been going to the top layers.
How easy is it to make profit from palm oil?
One will make profit but it is not an investment that brings immediate returns; if you cultivate today, it will take years before you will be able to break even on that investment, you will probably be holding it for the next 10 years. Funding is a major challenge.
What other challenges do you encounter?
We have infrastructural challenge. We can’t go through the whole process alone; we need stable power to keep the mill running. We need good roads to get fruit from the plantation to the mill and also get the final output whether palm oil or palm kernel back to the consumers. We need housing because plantation requires lots of people working on it. So these are the things one has to first create themselves as a player in the palm oil value chain.
While I love the fact that people have been encouraged to go into agriculture, the fact is that agriculture business requires lot of funding if we want to do it at a level where it will start to solve most economic issues nationally. It’s also a challenge to us because we haven’t been able to scale up as much that we want to.
What’s your unique selling point?
For us as a medium player, one thing we tell people is the oil we sell; we know what has happened to it at every point from cultivation to production. We are sure of the quality because we nurtured it from the nursery to the plantation and harvest to production which are done in line with international practices. We are almost done with our NAFDAC approval, so before the year runs out, we will be on the shelves in stores across the south west. We want to bring quality but affordable oil to the market. We are saying we want to come a bit lower in price not because we are inferior but because we have the people in mind.
What’s your vision as a brand?
As a brand, we want to use agriculture to educate, entertain and feed people. These three things are always in our minds when we want to ensure any strategy.
How can agriculture be used to entertain people?
I tell people there’s a whole lot we are missing by living in urban areas, we want to create a farm settlement that will have chalets where people can come for vacation; take in fresh air, take a break from the city and relax. What we are looking out for is using agriculture to bring people back to natural environment and encourage them to go into farming. So many people think agriculture is far away from them. People can learn a lot by visiting the farm and we hope we can deliver that.
What is your advice to stakeholders?
I will like to tell anybody thinking about investing in palm oil that a lot of cash will be required, I’m not scaring them. It’s an investment that gives profit but get yourself aligned with people that have experience. If I had known a lot of things I know now when I started, we would have moved better than we have done with the same resources. So I would tell them not to gamble, don’t assume and be sure of what you are putting in the ground. Don’t cut corners, buy from the right source and more importantly, get mentored to learn from the mistakes of others who have been there. We have an association, try and be a part of it to get ideas and support.
I want to appeal to government to consider the welfare of small holder farmers involved in cash crops; they are very sensitive and can determine our future economically. It is capital intensive and government funding schemes do not get to them; they should remodel schemes to make it accessible to small holder farmers.
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