Oluwakemi Abimbola speaks with Taiwo Adewole, the managing director of Okitipupa Oil Palm Plc, about the rising prices of food items and other economic issues, in light of recent calls for the Federal Government to establish commodities boards to oversee the situation.
Nigeria is currently experiencing difficulties with foreign exchange. What are the nation’s chances of earning foreign exchange in the market where you operate?
We firmly believe that we are a Nigerian business. The current production level is less than the local demand given the state of the nation. Given the local market gap, why would you want to go after the overseas market? I won’t, however, close the door on that opportunity; instead, we will take care of our local market’s needs before looking into international markets. Rather than searching for opportunities abroad, we would rather contribute to the economic transformation of our nation out of loyalty to it. In any case, we are depriving our people and the local economy of its potential if we export the goods we produce. Thus, we’ll be a part of the team that works to grow our local market and meet local demand before considering export opportunities.
We are importing farm products, which is one of the factors contributing to the pressure on the dollar. How can we, as leaders in this field, become self-sufficient enough to stop importing some of these products?
My response is that we are concentrating on the local market because of this. Now, as we export more goods and there is a local shortage, the demand for our products will grow, which will continue to put pressure on the dollar. We are among those who support the idea that Nigeria should not import palm oil for any reason. Invest locally if you are a user or a producer of that product. Rather than pressuring the government to release funds for you to import processed palm oil, invest in businesses and local farmers who are making these goods so you can support their economy. Nigeria is the birthplace of oil palm. My opinion is that we should concentrate on regaining that top spot in the world and that we should have enough resources to produce enough for local use before exporting.
How are you incorporating innovation and technology into your daily operations?
You will soon realize that we live in a digital age. In order to process and possibly refine oil palm and create a variety of products, we will be building new, extremely efficient factories. In order for the business to use technology to run its operations, we will also implement new software to manage the various processes along the value chain.
The government has been urged to set up commodity boards in order to control the escalating price of food. Is that really the best course of action?
We ought to examine free enterprise, in my opinion. Allow the government to focus only on establishing rules and a supportive atmosphere for companies to prosper. Commodity boards were something we had previously. What benefit did they provide to the farmers and business owners in that industry? Although I’m not sure if I’m comfortable with commodity boards, the business sector will prosper if the government implements the proper laws and policies that will draw in foreign direct investments and honest businesspeople. It is important for me to inform you that agriculture continues to be the primary source of employment and opportunities for labor. Therefore, the government should concentrate on fostering an atmosphere that will draw the necessary level of investment. That is among the topics we are discussing today. The goal is for us to be able to broaden the scope of our work, generate job opportunities, instill values in people and practitioners, and ultimately improve as a result.
Being involved in an industry that plays a vital role in the Nigerian economy, what are the main obstacles you see and how can we start tackling them, given that farmers don’t seem to be drawn to this sector any more?
I believe that security is the one issue that every Nigerian faces right now. It is no longer safe for farmers to leave the farm and hope to return. The President’s approval of the establishment of the state police makes us very happy. From our perspective, it appears that the current administration is making significant progress in tackling the security issue head-on. For everyone, security is paramount. Even for Nigerians like us, insecurity poses a significant problem because we can’t just go to work and leave, or we can’t even be certain that we’ll return. Therefore, the government addressed the issue of insecurity. In my opinion, this will greatly improve the environment’s safety for us to conduct business in and for farmers to visit their farms.
How far along are you in your efforts to recapitalize the business, particularly now?
This is a big step toward realizing the change that over the past six years, we have all been striving for. Even though we are currently among the biggest agribusinesses in Nigeria, we feel that our recapitalization program, which we began a few years ago, has reached a significant role or milestone. We have completed the numerous approval procedures.
What will be the focus of the new funding?
With this new funding, we’re investing in new technology to grow the company. We’ll establish the ideal conditions for the business to increase sales or profitability. Based on our actions over the past four years, I think so. Okitipupa Oil Palm Plc is expected to perform exceptionally well and hold a sizable portion of the oil palm value chain market.
What’s the magic? Okitipupa Oil Palm Plc has completely changed its name and has far more potential than it did in the past.
The company was completely incoherent and had no prospects for the future when we arrived in 2018. However, we are grateful that the company has changed completely today. Because of the completely different outcome that is being produced today, it holds promise for the future. Over the past three years, we have implemented a variety of strategies and made some bold decisions that have paid off handsomely.
How has the rebranding been implemented?
The process of re-engineering has been ongoing. When we first arrived in 2018, the cashless policy was in place, which allowed us to fully control our income. Due to the extreme illegality occurring on our plantations, we were also able to regain some measure of control over them with the help of the Ondo State government, which supplied the necessary security. Before our arrival, the plantations had been completely taken over by illegal harvesters, some of whom had even established illegal mills in close proximity to some of our plantations.
This is to demonstrate to you how much we had lost out on the business and to show that management was no longer in charge. The company’s soul is the plantations as a whole. However, 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 percent return on revenue, and the company had reported profitability for the first time in its 12-year history, enough to erase our losses. This was really significant to us.
