Presco Plc hit its all time high this week closing at N48.48 on Wednesday 11th February. The local oil palm giant posted a 9 months profit after tax of N1.65billion and is set to end the year with lower profits compared to the year before. The rise in its share price however, may not be unconnected with its plans to diversify into rubber production considering the challenges been faced in oil palm space.
As Bloomber reports, the foreign owners Siat, are already considering going into rubber production and have acquired 10,000 hectares of land for that purpose. The company currently sells 100% of its oil palm locally in Nigeria with the likes of Dangote Cement, Nestle and PZ. According to Bloomberg;
That’s not to say it’s abandoning palm-oil expansion plans. Presco is planting 1,500 hectares this year and targeting 20,000 hectares by 2020, Pilani said. It already has 11,760 hectares planted, according to its website. Presco doubled processing capacity at its palm-oil mill to 70 metric tons an hour last year and is expanding its refinery to 300 tons a day from 100.
In total, Siat intends to invest 8 billion naira in the next eight years in Nigeria, which accounts for about 30 percent of its income, Pilani said, citing “strong” local demand for palm oil and forecasts for economic growth.
It also reports its palm-oil and rubber expansion plans may result in annual profit of 20 billion naira to 25 billion naira, and sales of more than 100 billion naira, Pilani said, without specifying a year.
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