Presco Plc and Okomu Oil Palm Company Plc, two of Nigeria’s top palm oil producers, witnessed a combined profit surge of 70.2% last year, according to data compiled by BusinessDay. Their total after-tax profit reached an impressive N51.62 billion, significantly exceeding the N30.33 billion recorded in 2022.
Strong sales fueled this financial success, which climbed to N130.7 billion from N100.8 billion the previous year. Okomu generated N67.04 billion in revenue from the domestic market and an additional N7.95 billion from exports, while Presco focused solely on the local market, generating N103.1 billion.
Individually, Presco saw its sales revenue grow by 39%, reaching N27.6 billion, while Okomu Oil reported a 27% increase, reaching N103.14 billion. These figures highlight the thriving palm oil industry in Nigeria and the strong performance of these two leading companies.
While Presco Plc saw earnings growth in the first half of 2023, its domestic competitor, Okomu Oil Palm Company Plc, did not fare as well. Analysts at CardinalStone attribute Presco’s success to its niche product offerings, which cater to specific customer needs and have shielded the company from the negative impacts of smuggling on market share.
Despite Presco’s positive performance, Nigeria’s palm oil industry as a whole remains in its infancy and requires significant investment and transformative policies. Although the industry was a major revenue generator for the country in the 1960s, it has since fallen behind, with Nigeria now ranking as the fifth largest producer of crude palm oil globally, holding less than 2% of the total market share. This decline is a stark contrast to the 1960s when Nigeria held the top spot with a 43% global market share.
To revitalize this once-thriving industry, Nigeria needs to prioritize funding and implement policies that encourage growth and innovation. This will help the country reclaim its position as a leading player in the global palm oil market.
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