The managing director of Okitipupa Oil Palm Plc, Taiwo Adewole, talks to Oluwakemi Abimbola about the issue and other economic concerns in the wake of recent calls for the Federal Government to create commodities boards to control the rising cost of food.
Nigeria is currently having problems with foreign exchange. What is the country’s potential for earning foreign exchange in the market you operate in?
According to our own beliefs, our company is based in Nigeria. Given the current state of the nation, there is less production than there is demand locally. Given that there is a market gap locally, why would you want to go after the foreign market? I won’t shut the door on that opportunity, but we will take care of our local market and opportunity before looking into international markets. Our allegiance is to our country, and rather than seeking opportunities abroad, we would rather contribute to the economic development of our nation. In any case, if we export the goods we make, we are depriving our community and the local economy of its full potential. Thus, before considering our options for exporting, we will be a part of the team that works to grow our local market and meet local demand.
The fact that we import agricultural products is one of the factors contributing to the pressure on the dollar. Being a pioneer in this field, how can we become self sufficient enough to stop importing some of these goods?
Our attention is on the local market, which is why I respond as I do. Now, since your demand will keep growing, the more we export our goods and the gap within locally, the more pressure you’ll have on the dollar. We are among those who argue that Nigeria, for whatever reason, has no need to import palm oil. Invest locally if you use the product or if you are its producer. Invest in businesses and local farmers who are making these goods so you can support their economy instead of pressuring the government to give you money so you can import processed palm oil. Nigeria is where oil palm first appeared. That being said, I believe that we should concentrate on regaining that top spot in the world and that we should have enough resources to produce enough for both local consumption and export.
What innovative and technological practices are you implementing in your business?
You’ll realize that we live in a digital age now. To create a variety of products from all parts of oil palm, we’re going to set up new, extremely efficient factories for processing and maybe refining. Additionally, in order to enable the business to leverage technology in its day-to-day operations, we will be implementing new software to manage the various processes throughout the value chain.
To control the escalating cost of food, proposals have been made for the government to set up commodity boards. Consider that the best course of action.
I believe that free enterprise should be our focus. Let the government to focus only on establishing the rules and favorable conditions necessary for companies to prosper. In the past, we’ve had commodity boards. To the farmers and business owners in that industry, what benefit did they provide? Commodity boards may not be to everyone’s taste, but if the government sets the proper rules and regulations to encourage foreign direct investment and real businesspeople to enter the industry, the business community will prosper. I must inform you that agriculture continues to be the main industry that employs people and generates opportunities. Therefore, the government’s primary goal should be to establish an atmosphere that will draw the necessary investment. That is included in our conversation today. Our goal is to broaden the range of our activities, generate job opportunities, instill values in people and practitioners, and ultimately improve ourselves in the process.
As a participant in a sector that holds significant economic importance for Nigeria, what are the main obstacles you see and how can we start to actually overcome them, given that farmers don’t seem to be drawn to this sector any more?
Security is, I believe, the one issue that every Nigerian faces right now. Farmers can no longer leave their farms in safety and hope to return. We are overjoyed that the President approved the establishment of the state police. It is evident to us that this government is tackling the security issue head-on with some very commendable initiatives. For all people, security is paramount. Even as Nigerians, we face significant challenges due to insecurity, as we are unable to simply leave for work and return, or even know if we will return at all. The government has taken steps to address the issue of insecurity, and I think that things will be mostly safe for us to do business in and for farmers to visit their farms.
To what extent have you succeeded, particularly now, in your attempt to recapitalize the company?
In the last six years, we have all worked toward this transformation, and this is a big step toward realizing it. Even though we currently rank among Nigeria’s biggest agribusinesses, we feel that a significant component of our recapitalization program, which we initiated a few years ago, has been achieved. We’ve completed all of the approval procedures.
What is the intended use of the new funding?
With these additional funds, we’re implementing new technology to advance the company. We’ll set up the proper conditions so that the business can increase sales or profits. With what we have accomplished over the past four years, I think. With a solid market share in the oil palm value chain, Okitipupa Oil Palm Plc is expected to perform exceptionally well.
What is the magic of Okitipupa Oil Palm Plc, a completely rebranded company with far greater potential than it has ever explored in the past?
The business was completely dead and had no chance of survival when we arrived in 2018. However, we are grateful that it has evolved into a completely new business today. Given that the outcome that is being produced today is completely different, it holds promise for the future. Over the past three years, the different approaches and bold choices we have made have paid off handsomely.
How has the rebranding been carried out?
In other words, the process of re-engineering has been ongoing. We implemented a cashless policy when we first arrived in 2018, which allowed us to fully control our income. Additionally, due to the extreme illegality occurring on our plantations, we were able to regain some measure of control over the land, which had been completely taken over by illegal harvesters prior to our arrival. Some of these harvesters had even established illegal mills in close proximity to some of our plantations. This was made possible by the support of the Ondo State government, which supplied the necessary security.
That’s to demonstrate to you the extent of our company’s loss and to show that management was no longer in charge. The company’s spirit is the collective strength of the plantations. But in 2020, we had to make a very unusual strategy change. By the end of 2020, our results proved that we were correct in the strategy we had chosen; we had over a 200% return on revenue, and for the first time, the company had reported a profitability sufficient to erase our twelve years of continuous losses. This was very important to us.
