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 PROJECTS
PALM OIL, IVORY COAST
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Palm Oil, Ivory Coast - Overview
The DekelOil project is a vertically-structured, integrated enterprise based on collaboration between:
- The company – DekelOil, acting as an integrated operational and business entity;
- Financial institutions
- The cooperatives of the oil palm plantation cooperatives;
- Local farmers.
This collaboration is intended to ensure the success of the project while benefiting the local farmers, financial institutions and Ivory Coast's economy. The agricultural sector (which employs 60%-70% of the country's population), suffered greatly during the period of unrest the country has undergone. Funding to cover maintenance and the establishment of new oil production plants was unavailable, and marketing systems collapsed.
Recently, the Ivory Coast government, in collaboration with the large palm oil producers, agreed to increase the price of raw palm oil to €61/ton. Farmers producing 10 or more tons of raw palm fruit per hectare now have the opportunity to substantially increase their income. While the step taken by the government has indeed increased motivation to develop the oil palm industry, funding is still lacking. This is where DekelOil comes in, offering a win-win solution to local farmers, cooperatives and financial institutions – and indirectly – to the country as a whole.
The fact that one company will control the entire chain, from the supply of the feedstock through the production of the palm oil, to its sale and distribution, will enhance efficiency and cost-effectiveness. Moreover, DekelOil's control over all project components and stages greatly increases the attractiveness of the project and its anticipated success.
The products of this enterprise will include both palm oil, intended for energy uses and food industries; and palm kernel oil, intended for the health and cosmetic industries.
Activities
This venture will include a variety of activities, some of which are of a more direct, immediate nature; while others are aimed at achieving medium- and long-term benefits, and will be carried out at later stages of the project.
Activities to be implemented during the initial stage include:
- Cultivation of oil palm plantations.
- Production of crude palm oil and palm kernel oil.
- Marketing and sale of the extracted palm oil and kernel oil locally and on the international commodities market, as well as to specific food, cosmetic and biodiesel industry production plants.
Concurrently, DekelOil will construct a modern technical and economical project management infrastructure to ensure cost-effective operation and management.
Cultivation of oil palm plantations
DekelOil has secured a long-term (2 consecutive 40-year) leasing agreement to farm 68,000 hectares, comprising 52,000 hectares of oil palm plantations at two separate locations. Additionally, DekelOil has signed leasing agreements for an additional 12,000 hectares of open cultivated land. More oil palms may be planted on this land, without the need to cut down forests.
The raw material used for oil production in DekelOil's facilities will be grown on these fields. The quantity of oil palm fruit harvested is currently estimated at 300,000 tons annually, and is projected to increase to approximately 900,000 tons annually by 2013, and to approximately 1,170,000 tons annually by 2017.
Oil production
Oil from the oil palm fruit harvested from DekelOil's fields will be extracted in two large, modern palm oil extraction plants, to be built by the company. The construction of such plants is looked upon favorably, and even encouraged by the Ivory Coast government, due to the shortage of oil extraction facilities in the country.
DekelOil's plants are expected to begin oil extraction by the end of 2009, at a rate of 125,000 tons of oil during the first 12 months. The company plans to increase this quantity to a total of 260,000 tons of crude palm oil and 20,000 tons of palm kernel oil per year by 2017.
Marketing and sales
DekelOil will establish an effective marketing and sales system that will carry out activities in main markets, particularly in Europe and the USA. It will build on the broad experience and existing business connections of its parent group – the Rasin Group, as well as on new contacts that are presently being formed, and will continue to develop in the coming years.
Activities to be implemented in later stages include:
- Establishment of two modern nurseries, in which seeds of a high genetic quality will be developed to produce high-yielding oil palms.
- Establishment of an R&D program aimed at developing a genetic variation of palm seed that will yield mature fruit year-round.
- Replacement of oil palms planted in old plantations yielding small harvests with new trees that will generate high yields.
- Sharing of know-how and technical training.
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