Singapore-based firm in $1.3 billion fertilizer investment in Gabon

Singapore-based commodity firm Olam International Ltd. said in mid-November it will set up a $1.3 billion ammonia-urea fertilizer complex in the central African nation of Gabon. The project is a joint venture with the Government of Gabon, in which Olam will own an 80 percent stake.

Olam said in a statement the complex should commence operations by the first half of 2014 and run at a full capacity of 2,200 metric tonnes of ammonia and 3,850 metric tonnes of urea per day by the fiscal year of 2015, producing a total of 1.3 million metric tonnes of urea per annum.

"The investment will be financed on a debt/equity ratio of 65:35. The debt portion estimated at $845 million is expected to be entirely funded through non-recourse debt financing at competitive terms," the company said.

"Olam's share of the equity investment is estimated to be $364 million, to be phased across the three-year development and construction period."

Olam will either self-fund its portion of equity or partly sell down the investment through a partial sale to strategic or financial investors, it said.

Separately, Olam also said it has entered into another joint venture with the Gabon government to set up a 300,000 hectares palm oil plantation which will require an investment of $236 million over seven years.

Olam, which has 70 percent stake in the palm oil joint venture, said planting will start in 2012 and is targeted to be completed in 2016.

Reuters

Cassava: Gabon seeks Nigeria’s help

by Siaka Momoh

Gabon, a West Central African country which has a rich agro ecological zone, plans to develop its cassava industry by tapping planting materials, skills and information from Nigeria, a Gabonese top official has said. The country intends to improve cassava production, making it a source of income for farmers and a major tool in poverty eradication.

“The Nigerian government has agreed to offer assistance to Gabon by providing planting materials among others. We also see the International Institute of Tropical Agriculture (IITA) as an important partner in assisting Gabon in this regard,” Francois Banga Eboumi, Gabonese Ambassador to Morocco who is also the Special Adviser to the President of that country said during a courtesy visit to IITA in Ibadan.

In the last 42 years, the IITA in collaboration with national and international partners has developed and released several cassava varieties in Nigeria and beyond, making Nigeria the world’s largest producer of cassava with 45.7million tonnes per annum.

Despite the offer of planting materials to Gabon, Eboumi said his country would want to acquire the skills and capacity to develop the cassava industry on its own. Said he, “We are not only asking for fish, we also want you to teach us how to fish.” According to him, Gabon would want IITA to build the capacity of Gabonese scientists and also help the country with improved planting materials and information that would increase the yield of cassava and other crops in that country.

Cassava plays a significant role as a source of dietary intake for the people of Gabon.
Eboumi said there was need to boost production in order to keep pace with the ever increasing demand for the crop.

Nigeria is the world’s largest producer of cassava with a current statistic of 49 million metric tonnes a year (FM AR 2007) which is grown by over 40 million farmers in the country.

Cassava is fast becoming a potential engine of growth in many developing countries and exerting a powerful influence on world trade, courtesy of efforts of governments and the private sector in developing unique, value-added, cassava-based products for human consumption and industrial purposes.

The federal government of Nigeria and other agencies have established various programmes for the development of the cassava agribusinesses, all working in tandem to increase production and processing, and to promote willful consumption of cassava products through increased marketing opportunities’. Policy focus such as increasing duty tariff or total ban on the importation of corn starch and wheat flour plus the 10-20 percent ethanol blenching policy will further create enough stimulation and motivation for farmers to increase cassava production.

Business Day

African Development Bank funds rubber, oil palm projects in Gabon

The African Development Bank (AfDB) Group has signed an agreement for a loan of € 10 million under its private sector window with the Tropical Agriculture Investment Company (SIAT) of Gabon to finance an agriculture expansion project in the country.

The agreement was signed on February 19 in Tunisia, where the bank has its headquarteres.

Speaking after the signing ceremony, Mr. Gantsho of the AfDB noted that the rubber and oil palm plantations expansion project will create some 520 permanent employment with women constituting about 35% of the permanent workforce and about 40% of the seasonal workers, thereby making a positive impact on the population of Woleu-Ntem and Moyen-Ogooue provinces of the country.

“The development of a dynamic private sector in the Regional Member Countries ranks high among the Bank Group’s priorities to support sustainable development and reduce poverty in Africa. We give special attention to projects that are designed to provide high development impact,” he emphasized.

Noting that the agricultural expansion is one of such projects that have proved to be effective midway between large private firms and micro and small enterprises, because of its outgrower rubber scheme which will support 500 farmers and provide them with training to enhance their skills and improve their productivity.

Mr. Gantsho noted that collaboration with the SIAT Group began in December 2002 with an approval of a € 7.14 million loan to Ghana Oil Company, adding that the signing of Tuesday’s agreement marked the consolidation of the collaboration between SIAT and the Bank Group.

“We have been impressed by the good governance demonstrated by the SIAT Group in the Ghana project. We look forward to this new project and hoping that SIAT Gabon will become an example of best practices for corporate governance, transparency and accountability, which could be replicated in future Bank interventions of similar nature,” Mr. Gantsho said.

Speaking on the occasion, SIAT-Gabon Chairman, Pierre Vandebeeck, explained that the company, which has invested heavily in Ghana, Nigeria, Cameroon and Cote d’Ivoire, started operations in Gabon four years ago following the acquisition of 7,000 hectares of state plantations which now provide jobs for 3,600 people. The company has moved on level up with a programme to invest 40% equity shares in the local stock exchange in Gabon as one way of empowering the workers.

SIAT-Ghana is the company’s biggest investments with 20,000 hectares under cultivation and employing 6,500 farmers, among other huge investments. The company is doing big agro-business in Nigeria where it is listed on the Nigeria. It moved into Cote d’Ivoire in 2007.

“I believe we have established a track record with the African Development Bank and we hope to continue doing business with you, “ he said.

The AfDB Executive Director for Cote d’Ivoire, Frederic Korsaga, for his part, said the boards and management of the Bank Group were placing more emphasis on private sector ventures like SIAT for rapid and sustainable growth capable of helping poverty reduction and job creation efforts in African countries.

He noted that given the continent’s rising population, which is projected to reach 2.5 billion in 2030, two major challenges that the continent would face would be food self sufficiency and job-creation.The private sector must be fully involved as such huge tasks cannot be left with governments alone, he added.

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