Palm oil makers’ sustained gains pull N2.13trn investments

The sustained profits of Nigeria’s palm oil makers have drawn more than N2.13 trillion investment into the thriving industry in the last seven years, creating thousands of jobs and giving hopes to smallholder farmers.

Presco PLC and Okomu Oil Palm Company, Nigeria’s biggest palm oil makers, have posted record profits for seven straight years despite challenging economic conditions.

Driven by strong demand, foreign exchange (FX) scarcity, rapid rising population and favourable market trends, Nigeria’s palm oil markers are showing that the industry holds tremendous promise for those interested in seizing the opportunity.

Okomu Oil Palm Company and Presco Plc collectively recorded a profit after tax of N136.2 billion in the first half (H1) of 2025 from N5.1 billion 2019, according to data compiled by BusinessDay.

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“Presco and Okomu sustained record gains are showing that it makes business sense to invest in palm oil business,” said Celestine Ikuenobe, former executive director of the Nigerian Institute for Oil Palm Research (NIFOR).

“Their strong results are also attracting investments in the palm oil business,” he said, noting that the businesses mirror what is possible in investing in the production and processing of the edible oil.

With the tripled profits recorded by both firms, Ikuenobe noted that there is even more potential for Nigerian producers to make profits both from local and international markets as the use for palm oil rises daily.

“Everybody consumes palm oil daily in one form or the other and its industrial use is also increasing. This shows that there are lots of promise in palm oil production,” he explained.

Palm oil production, consumption

Data in the oil palm sector show that the country produces 1.4 million (MT) per annum, with local consumption estimated at 2.7 million MT, according to data from the Food and Agricultural Organization (FAO).

The figure indicates a demand-supply gap of about 1.3 million MT. The 1.3 million MT supply gap in the country shows potential for new investors, experts say.

About 90 percent of palm oil is used in the production of foods, while the remaining 10 percent is used by the non-foods industry.

Foods like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil. Also, companies are now using it as biodiesel and aviation fuel, further driving demand.

Potential

According to experts, Nigeria needs a total plantation of about three million hectares of land if it wants to be self-sufficient in the production of oil palm to meet local demand.

“We are seeing a pull of new investments in the industry, and the sustained record profits by listed palm oil producers is one of the main factors driving this surge,” said Alphonsus Inyang, president of the National Palm Produce Association of Nigeria (NPPAN), in a telephone response to questions.

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He noted that despite the economic downturn that squeezed most manufacturers in the country in 2023 and 2024, palm oil makers were still able to record a stellar performance, with the industry driving new investments.

“It is one subsector that has attracted investments the most in the last three years,” he said.

Uchenna Uzor, a marketing professor and academic director of the Africa Retail Academy at Lagos Business School, said investor confidence in the palm oil industry is getting higher owing to a combination of factors.

Uzor explained that constant record profits, quest for local sourcing, creative usage of palm oil beyond the conventional uses and export potential in palm kernel are making investors bet big on the industry.

“The confidence of investors in the palm oil industry is very high and the record profits by listed operators are fuelling it greatly,” he said.

Growing palm oil investments

Nigeria’s palm oil investments are growing rapidly. The sector has recorded N2.13 trillion worth of investment in seven years, according to BusinessDay’s compilation of reported investments in the industry.

BUA Group and Alfa Laval PVT Limited signed a deal in April 2025 to construct a 1000 metric-ton-per-day (TPD) palm oil refinery and fractionation plant. The cost of the investment was not made public.

As of 2024, the United Nations Industrial Development Organisation (UNIDO) and the National Palm Produce Association of Nigeria (NPPAN) said they attracted a €300 million investment to Nigeria’s palm oil industry.

In 2023, Sunora Foods invested $100 million in an oil palm plantation in Edo State to boost local production of the commodity.

In 2020, the Central Bank of Nigeria (CBN), through its intervention programmes, disbursed a total of N34.3 billion to major oil palm companies to support the industry with a plan to plant 100,000ha of palm oil trees by 2025, from 20,000ha in 2020.

As of 2018, PZ Wilmar had invested over $150 million in oil palm plantations in Cross River State alone, BusinessDay was told.

Others are investments stated by the Edo Oil Palm Development Programme and the Delta State Commercial Oil Palm Plantations Growers Cooperative Society Limited (DELCOM) initiative.