Okitipupa Oil Palm Company: An abandoned goldmine

Admin 31 May, 2017 Viewpoint

By Yemi Ogunduboye
Okitipupa Oil Palm Company Plc was established about five decades ago. The company has as its major raw materials palm fruits. The company was served by oil palm estates scattered across the three local governments of Okitipupa, Irele and Ese-Odo. They were located in Igbotako, Ilutitun, Ikoya, Igbisin Oloto, Ode-Irele, Ajagba, Erekiti etc.

The company produced palm oil and kernel, it also produced crude palm oil, technical oil, pharmaceutical sterin, palm wine, brooms, seedling, ashes and brown soap.

The company served industrial users that manufacture soaps, margarine and vegetable oils, its lower grade oil is for household market.

In its early days, the old Okitipupa Division and its headquarters, Okitipupa township, where the company was located and the various towns where the Estates were sited were beehives of economic activities and the economic base of the old Ondo State which now consist of Ondo and Ekiti States.

The economic activities of that time was so great that people from far and wide migrated to Okitipupa and its environs to be employed in the mill and the plantation estates scattered all over.

People from Ondo, Akure, Akoko and Ekiti came down for employment and some of them have remained in Okitipupa even after the “death” of the company and the Estates.

The company and the Estates served as major sources of employment for the people and for revenue to the state government either in form of company income tax and pay as you earn taxes from employees.

Majority of the educated citizens from that place got themselves educated by doing holiday jobs both at the Mill and the plantation Estates. The fact that people from that areas were few in the state public service cannot but be traced to the fact that majority of them were employed in those outfits. Because of the condition of work: Better pay and better condition of service, which were not applicable in the public service then.

Today, the story is that of abandonment and neglect. The once buoyant and booming oil palm company is dead, while the economy of the area has suffered greatly. The aftermath is the lingering youth unemployment, crime of all sorts, illegal harvesting, poaching, political hooliganism, kidnapping and sea piracy, pipeline vandalism etc.

Unfortunately, successive administrations have refused to address the issue of resuscitating both the mill and the ageing plantation estates with the required zeal, instead, they only put their surrogates to siphon whatever they can lay their hands on. Also, they prefer to establish new ones as done in Ore, where millions of naira was used to import seedlings from Malaysia and everything was left wasted. Not a single seedling was planted, as the purpose for which it was imported was to siphon public funds. A visit to the now abandoned Ore-Agro business centre will confirm my assertion.

It is rather unfortunate that the state and by extension Nigeria had to import palm seedlings from Malaysia. History has it that in the 1960s Malaysia and Nigeria were both developing countries and that palm seedling was taken from Nigeria to Malaysia. Today, Malaysia and Indonesia are the world leading producers of palm oil. It got to a time in the recent past that Nigeria had to be importing red oil to complement the local production. What an irony!

Today, while Nigeria is still being referred to as developing with huge debt burden both local and international and with high unemployment rate, Malaysia and Indonesia are referred to as Asian tigers with high Gross Domestic Product and high standard of living. Malaysia is one of the most sought after countries that Nigerians and Africans now migrate to after the United States and Canada. Their main source of revenue is based on red oil production; palm tree is also being planted in the city centre to add to the beauty of the city to combat the effect of climate change.

Without going International, Okomu Oil Palm Plc which is located in Okomu-Udo, Ovia South West Local Government of Edo State which is not up to the size of the plantation in Igbotako and Ilutitun, is listed in the Nigeria Stock Exchange where its shares are traded regularly.

Every year, Okomu Oil Palm Company Plc holds Annual General Meetings, publishes its statements of Account while dividends are given to their shareholders. That of 2016 will be held on Friday, 23rd of June, 2017 at the Transcorp Hilton Hotel, Abuja, where the Audited Account and other business will be discussed and dividend payments will be approved (The Guardian, Tuesday April 25, 2017).

Another commendable aspect of the operation of the company is in the area of corporate social responsibility to the community in which they are sited. The sum of two hundred million was spent for the benefiting communities in 2017 alone (Guardian, Tuesday, April 18, 2017).

In 2016, lots of projects were commissioned for the benefit of the community in the mandate areas. The company also extended its CRS to government institutions such as Nigeria Police Force, Educational Institutions and the Health Sectors.

If Okumu which is not up to one third of the size of Okitipupa Oil Palm in terms of hectares of plantation cultivated, can be profitable and beneficial to both the people and the government of Edo State in the areas of Employment, source of income to the people and government as well as provide social amenities to the people, why can not Okitipupa, with its many plantation estates do the same if not more? Is it that the manager of Okomu came from another planet?

Another notable example of a success story is in the former Rivers State Oil Palm Company, which suffers the same fate with Okitipupa Oil Palm Company, but had been revamped, having been handed over to a private company to manage. Today, the once moribund company is now thriving with economic activities in River State outside the exploitation of crude oil.

The Okitipupa outfit can also be revamped if the government is ready and willing to take the bull by the horns and put in place the machinery to address the man-made challenges that turned the one-time buoyant outfit into a sorry state.

Some of the identified problems of the Okitipupa Oil Palm Company include; management, corruption, ownership structure, Boardroom Palaver, high cost of maintenance of the obsolete mill, centralisation of the mill, abandoned plantation estates, ageing plantation, illegal harvesting of fruits, litigations, neglect of land owners, debts owed to contractors for materials that were supplied and others not supplied but claimed to be supplied.

For the company to get back on its feet once again, the state government must have the political will and give priority to Agriculture as one of its five point-agenda to address youth unemployment and enhance the economic fortune of the state in the face of the dwindling revenue from the federation account.

Other solution to salvage the situation are the resolution of the ownership structure, invitation credible investors, putting in place management committee that are experts in business turnaround, planting of new and improved seedlings, localisation of mills, and installation of new technology (Mills), resolving pending litigations, involving the local people as is being done in the Niger Delta, keeping of register of contractors and Decentralising the management structure.

A situation where a single management team based in Okitipupa will be saddled with the running of the Estates spread across three local governments may not be the best.

The recent efforts of the state government to address the low fortune of the cocoa sub-sector, should also be extended to the oil palm sub-sector as the derivatives from the oil palm are more than that of cocoa.

Related Posts

Comments are closed.

Follow Us on Twitter

Like Us