Fifteen years after it was revived, the moribund Okitipupa Oil Palm Plc has begun to contribute to the country’s economy by providing jobs for thousands of Nigerians. The Managing Director, TAIWO ADEWOLE speaks on his team’s drastic decisions in the last three years that revived the old oil palm giant.
Okitipupa Oil Palm Plc today, is a totally rebranded company with far greater potential never explored in the last 30 years, what’s the magic?
When we came in 2018, the company was in total comatose with no hope for the future. But today, we want to thank God that it has become a totally different company. It holds the promise for the future, because the result that is coming out today is totally different. The various strategies and drastic decisions we have taken in the last three years, has paid off with great results.
In what ways have the rebranding been done?
Well, it has been a continuous re-engineering process. In 2018, when we came in, we started with cashless policy, which gave us the opportunity to have full control of our income. Also, because of the huge illegality going on in our plantations, with the support of the Ondo State government that provided the required security, we were able to have some measures of control of the plantations, which prior to our coming, had been totally taken over by illegal harvesters, some of who even set up illegal mills close to some of our plantations.
That is to tell you the extent we had lost out the company and to prove that it was no longer in the hand of management. The plantations, collectively is the soul of the company. However, in 2020, we had to change strategy, which was very novel and at the end of 2020, our result has shown to us that we were right with the strategy we adopted, we now have over 200 per cent return on revenue and for the first time the company has reported a profitability that is enough to wipe our 12 years of consistent losses. This for us, is monumental and we believe that when we consolidate in 2021 to further drive up the profit up looking of the company.
We have also embarked on a strategic move to commence the development of our green fields, which is about 6,000 hectares that has never been done in the last 40 years.
What do you mean by the development of the green fields?
We have about 14,000 hectares and about 9,000 of it was developed between 1968 and 1974. After that, there has not been any development in OOP. The land has been there with a lot of encroachment here and there, but because of the level of change that we have achieved within three years, we discovered that, this is the best time to start planning for the development of the 6,000 hectares green fields, so that we can push up our revenue and be able to face our real development. Today, most of our palms are very old, we can’t deny that.
We believe that by the time we have fully developed the green fields and they start yielding, then, we can put in place a plan to start re-planting the old ones.
That has also enabled us to start developing the nursery, which has never been done before. The company never had the Nursery but today we have started developing nurseries and hopefully, the company should be able to develop about 700,000 seedlings over a 10-hectare field. We believe that this move is very strategic to our plans for the future. We believe that this is the right direction to go.
Considering the challenge of finance facing the company over the years, how will you raise funds to do all these?
Yes, we know it is a huge project, however, with proper planning and proper deployment of our generated revenue, we have the capacity to develop it even without resorting to borrowing. What is required is the judicious utilisation of the funds that we generate, and today, we are generating a substantial amount of revenue and we only just need to put it to better use to further enhance our revenue generating capacity.
If this had been done consistently over the years, the company should really not be looking for money. The company has the capacity to generate the fund that is required to develop all its available plantations and even to support other activities in the entire value chain.
Does this declaration presuppose that you have been able to liquidate some of the accumulated debts you met on ground?
Of course, in the last three years, we have worked assiduously to enable the company substantially liquidate most of the indebtedness that we met and freed the company from the burden of indebtedness, to banks, host communities, customer-depositors, employees and contractors. And our focus in the year would be to look at indebtedness to various regulatory bodies, so that we would be fully compliant as a responsible organisation.
One other issue is the case of unmet responsibilities to the landowners over the years.
What is the situation today?
On the issue of landowners, we recognised the fact that they are critical stakeholders, but unfortunately, the company has not looked at what was indebted to them in the last 31 years.
Today however, the story is changing for good as our administration has for a start, effective from 2018, has carried out a 400 per cent upward review in the yearly payments to the host communities and these obligations had been fully met.
The host communities and the company are in cordial relationship today, which had never been the case in the past, and we intend to build on it so as to ensure that we have a sustainable relationship that is fully beneficial to both sides. At the end of the day, the company is looking forward to a better responsibility towards the host communities in all its ramifications and particularly looking at how to help enhance the quality of lives in these host communities by way of Corporate Social Responsibility (CSR).
What about banditry going on in those host communities before you came, stealing which led to gun duel, between them and your security personnel?
It is expected because as an organisation, we have responsibility towards these communities and if we fail to discharge responsibilities expected of us, the outcome would be all forms of criminality, which is understandable.
Now, we are of the honest view that we should be responsible to these communities and therefore, all the banditry and criminality have their roots in the company not fulfilling its obligations in the past. Now that we have begun to live up to our responsibilities to them, now they have risen to our defence.
One of the strategies is licensing the farms to firms and individuals.
Will you say this strategy is more advantageous than when the company processes the fruits itself?
When we talk about the review of out operational strategies, the old practice was not giving us the result that we expected. So, there was the need to keep thinking through what should be done to arrest the situation and what was very clear in our mind was that we had to find a way to resolve the issue of access to the plantations, the issue of being able to retrieve all the fruits and at the end of the day, we came up with the fact that, the plantations were not in our hands, so, to address the whole challenges, we had to device a new means and we zeroed in on licensing out and that has produced the result that the company has never had, in its entire lifetime.
Not only that, it has also addressed the issue of the rising cost in operation. If you look at our result in 2020, the result is so phenomenal; you have almost 22 per cent increase in revenue. So, if you look at that together, you will see that the company delivered phenomenal result that is unprecedented.