Nigerian oil palm enterprise Presco Plc. has secured a full ownership stake in the Ghana Oil Palm Development Company (GOPDC).
According to Presco, the acquisition is valued at approximately US$124.9 million. Initially, Presco will pay US$64.9 million, with the remaining amount to be paid later.
Presco anticipates that this acquisition will support its currency diversification strategy, as GOPDC earns around 41 percent of its revenue from export sales.
Samuel Avaala, President of the Oil Palm Development Association of Ghana (OPDAG), informed the B&FT that the deal is unlikely to result in job losses for current GOPDC employees. However, he noted that the new owners might alter the company’s direction and potentially replace current management.
GOPDC is currently a subsidiary of Societe d’Investissement pour l’Agriculture Tropicale (Siat) SA, which is also a major shareholder in Presco. The company’s operations mirror those of Presco, involving the cultivation of oil palm, extraction of crude palm oil, and palm kernel oil, along with the production of refined oil products.
GOPDC currently operates from two oil palm estates in the Eastern Region of Ghana – the Kwae Estate and the Okumaning Estate – encompassing approximately 21,000 hectares of oil palm plantations, with 13,000 hectares already developed.
The company has processing facilities that include 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.
The company can produce 35,000 tonnes of palm oil and palm kernel oil annually. It also has storage facilities with a capacity of 21,000 tonnes.
GOPDC produces red palm oil and vegetable oil under the ‘King’s’ brand. The company employs about 30,000 workers during its peak harvest season.
For the fiscal year ending December 31, 2023, GOPDC reported net revenue of US$30.6 million, with a gross profit of US$18.1 million and an operating profit of US$12.6 million.
GOPDC achieved an operating margin of 41.2 percent for the fiscal year ending December 31, 2023, highlighting its strong operational performance.
Projections indicate that the company’s revenue will reach US$80.95 million by 2028, though its operating margin is expected to slightly decrease to 39.7 percent.
Presco cites reasons for the acquisition, including an expanded market share and customer base. The company anticipates that this transaction will increase its plantation area by 19 percent, from 43,457 to 51,760 hectares.
Another justification given by the company is economies of scale, as the deal is expected to bolster Presco’s competitive position and optimize resource utilization.
The acquisition is projected to enhance Presco Plc.’s market value on the Nigerian Stock Exchange, thereby providing the company with easier access to capital in the future.
GOPDC was established by the Government of Ghana (GoG) in 1975 and is now a leading oil palm plantation and processing company. However, the current government ownership percentage is not known.