Nigerian oil palm company Presco Plc. has acquired a 100% equity stake in the Ghana Oil Palm Development Company (GOPDC) for approximately US$124.9 million.
Presco will initially pay US$64.9 million, with the remaining balance to be settled in the future.
Presco anticipates that this acquisition will aid its currency diversification efforts, as GOPDC generates around 41% of its revenue from export sales.
According to Samuel Avaala, President of the Oil Palm Development Association of Ghana (OPDAG), the deal is not expected to result in job losses for existing GOPDC employees, although there may be changes in the company’s direction and management.
Currently a subsidiary of Societe d’Investissement pour l’Agriculture Tropicale (Siat) SA, a key shareholder in Presco, GOPDC’s operations mirror those of Presco.
Both companies are involved in the cultivation of oil palm and the extraction of crude palm oil and palm kernel oil, as well as the production of refined oil products.
GOPDC operates from two estates in the Eastern Region of Ghana – the Kwae Estate and Okumaning Estate, encompassing about 21,000 hectares of oil palm plantations, with 13,000 hectares already developed.
The company has significant processing facilities, including a 60 metric tonnes per hour fresh fruit palm oil mill, a 100 metric tonnes per day refinery, a 60 metric tonnes per day palm kernel mill, a fractionation plant, and a palm kernel cake pellet plant.
Its annual production capacity is 35,000 metric tonnes of palm oil and palm kernel oil, and it has a storage capacity of 21,000 metric tonnes.
The company, which produces red palm oil and vegetable oil under the ‘King’s’ brand, employs approximately 30,000 workers during peak harvest season.
For the year ending December 31, 2023, GOPDC reported a net revenue of US$30.6 million, a gross profit of US$18.1 million, and an operating profit of US$12.6 million, achieving an operating margin of 41.2%.
Forecasts suggest GOPDC’s revenue will reach US$80.95 million by 2028, with a slight decrease in the operating margin to 39.7%. Presco expects the acquisition to increase its market share, customer base, and plantation size by 19%, from 43,457 to 51,760 hectares.
The deal is also anticipated to strengthen Presco’s competitive position and optimise resource utilization, potentially increasing the company’s market value on the Nigerian Stock Exchange and facilitating future access to capital.
GOPDC, established by the Government of Ghana in 1975, is a leading oil palm plantation and processing company, although the current percentage of government ownership is unknown.