Africa’s fertile lands and strategic industrial zones (IZs) offer a tempting proposition for palm oil investors, with favorable growing conditions, land availability, and government incentives creating a cost-effective production environment. This lucrative agro-progressing opportunity is ripe for investment.
Palm oil finished products such as cooking oil, margarine and spreads, soap and detergents, cosmetics, biodiesel and animal feed businesses possess great investment opportunities for global investors. The global palm oil market was valued at USD 71.23 Billion in 2023 and is expected to reach USD 103.6 Billion by 2032, at a CAGR of 4.25%.
Beyond crude palm oil, by-products like palm kernel oil and palm kernel cake can be commercialized, further enhancing profitability.
Focus on Sustainability: Look for companies or industrial zones committed to sustainable practices like certified sustainable palm oil (CSPO) production, which minimizes environmental and social impacts.
Transparency is Key: Invest in business processes that demonstrate transparency in their sourcing and production processes.
The palm oil market in Africa is expanding rapidly due to rising demand from various industries. Technological advancements and modernization have led to increased efficiency and productivity in palm oil plantations.
Investment zones like ZIC in Ivory Coast and IPRFZ in Nigeria offer strategic advantages for palm oil cultivation and processing. These zones provide favorable conditions, including infrastructure, regulatory support, and access to markets, enhancing the viability and profitability of palm oil investments.
Other African countries with palm oil business opportunity include: Republic of Congo, Democratic Republic of Congo, Benin, Togo and Malawi.
Tanzania also represents a significant untapped opportunity in the palm oil sector. With suitable climatic conditions and increasing government support for agricultural development, Tanzania has the potential to become a major player in the global palm oil market.
PALM OIL BUSINESS ADVANTAGES IN AFRICA
Global Market Demand: With global consumption expected to reach 200 million tons by 2030, the demand for palm oil continues to rise, driven by its diverse applications.
Ethical Production: By investing in sustainable practices like responsible land use, high-yield cultivation techniques, and fair labor conditions, investors can capture the premium market for ethical palm oil products, fetching significantly higher margins.
Investment in Export: The export market for palm oil and its by-products presents lucrative opportunities for African farmers to tap into international markets. With rising global demand, particularly in Asia and Europe, palm oil exports can lead to increased earnings and foreign exchange inflows.
Research and Innovation: Technological advancements and innovative practices in palm oil production can boost productivity and efficiency. Improved farming techniques, smart farming methods, enhanced varieties, and mechanization can increase yields and reduce post-harvest losses, leading to higher profitability.
Processing and Value Addition: Palm oil can be further processed into refined palm oil, palm kernel oil, and other derivatives used in various industries. By-products like animal feed from palm kernel cake, biodiesel, cooking oil, cosmetics (moisturizers, lipsticks), margarine, spreads, soap, and detergents offer additional revenue streams.
Collaboration among stakeholders such as the Palm Oil Producers Association, the International Institute of Tropical Agriculture (IITA), farmers’ associations, processors, government, and private agencies can facilitate knowledge sharing, technology transfer, and best practices dissemination, further increasing production and driving sales.
Investing in palm oil business in Africa represents a compelling opportunity for businesses looking to leverage the continent’s agricultural strengths. With robust production capabilities, diverse market applications, and supportive government initiatives, palm oil is poised to drive economic growth, enhance food security, and foster sustainable development across Africa.
Dekel Agri-Vision PLC (LON:DKL) aspires to become a leading agro-industrial company in West Africa, one that creates value for shareholders whilst at all times placing the interests of the local communities and environment in which it operates in at the heart of its operations.
