Presco Plc is committed to its investment efforts which are aimed at boosting profitability and ensuring increased returns to their stakeholders. The oil palm production company recently earmarked some fifteen thousand [15,000] hectares of land for cultivation in 2018, in its first step at also checking competition.
According to Mr. Felix Nwabuko, Presco’s Managing Director, the expansion efforts are also in tandem with the policies of the Edo State Government and the Federal Government of Nigeria to reposition the Agric sector as one of Nigeria’s main sources of revenue generation.
Presco is investing in green energy production through our biological assets – our plantation. -Felix Nwabuko
More details about Presco’s expansion efforts
Information available on the company’s website has it that Presco recently concluded the acquisition of 17,600Ha in Edo State, where it plans to plant oil palm and rubber.
Already, the company [in 2013] upgraded its processing capacity from 40 to 60 tonnes per hour in order to ensure efficiency. By 2016, more upgrades were carried out in the production mill, such that it began to produce 90 tonnes per hour, even as some “four (4) units of fully automated tilting sterilizers” were installed and commissioned.
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These are just a few of the many investments the company is making to improve production/processing capacities, as well as storage.
Other possible reasons for the expansion
Asides the afore-mentioned reasons, it is apparent that Presco Plc is also expanding in order to remain relevant in the market. The company currently faces stiff competition from Okomu Oil Palm Plc and PZ Wilmar, two of the biggest oil palm production/processing companies in the country. These companies are equally making serious investments, taking advantage of available resources and expanding the market.
Late last year, it was reported that Okomu Oil Palm Plc has finalised plans to invest the sum of $45m towards the construction of the largest oil palm mill in Africa. The company also in January this year, began the process of commissioning its Extension 2 Estate at Ovia North East LGA in Edo State. According to its recently published financial year report, it earned ₦20.2 billion in the year ended December 2017. It currently has a market share price of ₦72.70.
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PZ Wilmar is equally undergoing expansions and better positioning its self to lead the market. While it may not present much competition to Presco (with a share price of ₦22.30, it is still a competitor nonetheless.
Meanwhile, Presco Plc has a market share price of ₦72.00 as at 4th of April, 2018. This puts it slightly below Okomu Oil Palm Plc; a clear indicator as to why its expansion efforts are indeed necessary.
The company is yet to release its financial statement for the year ended December 2017. A statement released on its website apologized to stakeholders for the delay and gave August 13th as the latest date to make public its 2017 financial statement.
Presco Plc is a subsidiary of Siat s.a, a Belgian agro-industrial company which owns 60% stakes in it. It was originally incorporated in 1991 as a private liability company but became a PLC in 2002. It is a wholesome agro-allied company, engaged in the plantation, harvesting, and processing of palm fruits. Its stocks are very much traded on the floor of the Nigerian Stock Exchange.