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 make an initial payment of US$64.9 million, with the remaining balance to be settled later.
Presco expects this acquisition to support its currency diversification efforts, as GOPDC generates about 41% of its revenue from export sales.
Samuel Avaala, President of the Oil Palm Development Association of Ghana (OPDAG), stated that the deal is unlikely to result in job losses for current GOPDC employees, although there may be changes in the company’s direction and management.
GOPDC, currently a subsidiary of Societe d’Investissement pour l’Agriculture Tropicale (Siat) SA, a major shareholder in Presco, operates similarly to Presco. Both companies are involved in oil palm cultivation 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 Ghana’s Eastern Region – the Kwae Estate and Okumaning Estate, covering about 21,000 hectares of oil palm plantations, with 13,000 hectares already developed.
The company has extensive 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.
It has an annual production capacity of 35,000 metric tonnes of palm oil and palm kernel oil and a storage capacity of 21,000 metric tonnes. GOPDC produces red palm oil and vegetable oil under the ‘King’s’ brand and employs around 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, with 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 anticipates that the acquisition will expand its market share, customer base, and plantation size by 19%, from 43,457 to 51,760 hectares.
The acquisition is also expected to strengthen Presco’s competitive position, optimize resource utilization, potentially increase its market value on the Nigerian Stock Exchange, and facilitate 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.
