Document of

Common Fund for Commodities

For official use only

IMPROVING THE INCOME GENERATING POTENTIAL OF THE OIL

PALM IN THE WEST AND CENTRAL AFRICAN REGION

(CAMEROON AND NIGERIA) – FIGOOF/28

to be financed under the

SECOND ACCOUNT

Appraisal Report

12 September 2008

Table of contents

Page

1. Overview of the commodity .............................................................................................. 1

2. Institutions involved and responsibilities ........................................................................ 7

3. Project Organization and Management ........................................................................ 10

4. Counterpart contribution and co-financing .................................................................. 12

5. Objectives and Rationale ................................................................................................ 13

6. Potential of the Oil Palm in West Africa…………………………………………… .15

7. Project strategy ................................................................................................................ 17

8. Results and expected impact…………………………………………………………...21

9. Feasibility and commercial viability .............................................................................. 22

10. Related projects and previous work ........................................................................... 25

11. Activities and work plan .............................................................................................. 27

12. Beneficiaries and Benefits ............................................................................................ 32

13. Sustainability………………………………………………………………………….34

14. Environmental aspects ................................................................................................. 34

15. Intellectual property rights ......................................................................................... 35

16. Cost and financing ........................................................................................................ 35

17. Project Financial Management ................................................................................... 37

18. Organization and Management .................................................................................. 37

19. Supervision, Reporting, Monitoring and Evaluation………………………………38

20. Risks ............................................................................................................................... 39

ANNEXES

Annex 1: Project log frame .................................................................................................... 40

Annex 2: Swot Analysis......................................................................................................... 52

Annex 3: Budget by Output................................................................................................... 55

Annex 4: Detailed Workplan ................................................................................................. 59

Annex 5: Institutions selected to participate in project activities ...................................... 62

List of Abbreviations

B-L Budget Line

CI Collaborating Institution

CEMAC Central African Economic and Monetary Community

CEREPAH International Research Center on Oil Palm Tree

CENEMA National center for Studies and Experimentation of agric. mechanization

CFC Common Fund for Commodities

ECOWAS Economic Community of West African States

FFB Fresh fruit bunches

IC International Consultant

ICB International Commodity Board

IGG Intergovernmental Group

IRAD Institute of Agricultural Research for Development

LC Local Consultant

LDC Least Developed Country

MAN Manufacturers Association of Nigeria

NIFOR Nigeria Institute for Oil Palm Research

NISER Nigerian Institute of Social and Economic Research

NPSC National Project Steering Committee

OSAN Oil Seeds Association of Nigeria

PEA Project Executing Agency

PPLC Palmol Plantations Limited

PRODA Projects Development Institute

RMRDC Raw Materials Research and Development Council

RPSC Regional Project Steering Committee

SB Supervisory Body

SES South East Asia

SME Small & Medium Enterprises

UNEXPALM Union of Palm Oil Growers of Cameroon

UNIDO United Nations Industrial Development Organization

WACA West and Central Africa

Project summary

The proposed project has, through market based technical assessment of the oil palm sectors

in the target countries identified problems that limit the potential of the oil palm in the region.

By analyzing the factors that have contributed to the success oil palm stories in SES,

interventions have been formulated to address specific problems along the value chain in

both the short and long term. Emphasis has been laid on value addition at the enterprise level

with the small- scale processors as the main beneficiaries. Issues of productivity, efficiency

of operations, product improvement and diversification as well as capacity to supply the

markets in quantities and quality demanded are to be addressed at the enterprise level. To

ascertain project success and sustainability, issues of productivity and competitiveness at the

farm level are also to be addressed to ensure a sustainable supply of raw materials to the

processors at competitive pricing. In addition, the potential for environmental degradation

from activities relating to palm oil production has been recognized and interventions along

the value chain designed to minimize this risk. The project further focuses on individual and

group training and empowerment at the community level and particularly in supporting

small-scale entrepreneurs to develop or improve their crude palm oil processing for improved

market access. Three key strategic issues of technology, markets and environment have thus

been addressed.

PROJECT SUMMARY

Improving the income generating potential of the oil palm in West and Central

African region (Cameroon and Nigeria)

Objective and Scope: To promote the development of a sustainable oil palm sector for

income generation and poverty alleviation in the WACA

region (Cameroon and Nigeria)

Sponsoring Institution: Intergovernmental Group on Oil, Oilseeds and Fats

Project Executing Agency: United Nations Industrial Development Organization

Collaborating Institutions: Cameroon: CEREPAH, CENEMA, PPLC

Nigeria: NIFOR, PRODA, OSAN

Supervisory Body: Intergovernmental Group on Oil, Oilseeds and Fats

Location of the Project: Primary locations in Cameroon and Nigeria

Duration of Project: 48 months

Estimated Total Cost: USD 4,656,040

Financing Sought from CFC: USD 2,886,040

Co-financing: USD300, 000 (UNIDO)

Counterpart contribution: ** USD Cash. 800,000 (Cameroon)

USD Cash. 500,000 (Nigeria)

Private sector contribution: USD 30,000 Small- scale palm oil processors (in-kind)

USD 140,000 Large- scale palm oil processors (in-kind)

** The counterpart contribution is in cash and will be transferred to the UNIDO project account

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1. Overview of the commodity

1.1 Commodity Strategy

The worldwide area planted with oil palm (Elais guineensis) has increased by more than 150

percent in the last 30 years. Most of the increase has occurred in South East Asia (SES) with

spectacular production increases in Malaysia and Indonesia. The reason for this rapid

expansion has been attributed to strong crude palm oil and kernel oil prices, a consequence of

the increase in demand for edible oils in developing economies of India and China. In

addition, crude palm oil and palm kernel oil are adaptable vegetable oils and command a wide

range of markets in the food and oleo chemical industries. Presently palm oil contributes

significantly to the global trade in fats and oils

Given the rate of expansion of the industry and its impact on key ecosystems and species, the

strategy of the commodity body is to promote an economically viable and environmentally

sustainable palm oil industry. For sustainable expansion of the palm oil industry,

appropriate sites for the location of plantations should be identified, practices that increase

their efficiency adopted, input usage reduced, waste minimized and valuable by products

created from the waste.

In addition, it has been proposed to use the oil palm in developing countries to improve rural

livelihoods. Although primarily an estate crop, the oil palm has been successfully adapted to

suit the needs of smallholders and has proved a powerful tool for poverty alleviation in

developing countries. For example approximately 2.5 and 1.3 million ha have been developed

as smallholder projects respectively in Indonesia and Malaysia bringing improved standards

of living to more than 12 million people (Better crops international vol.13).

To stabilize palm oil prices, the feasibility of palm oil as bio fuel has been investigated and

today, Malaysia is installing the technology for the utilization of palm oil as bio fuel (should

be operational by end of June, 2006) (Better crops international vol.13). The oil palm

remains a formidable competitor with the vegetable oil crops in terms of yields per hectare a

characteristic most suitable in selecting crops suitable for the production of renewable energy.

If the trend for increased utilization of bio fuels continues around the globe and is found

competitive, the international price of crude palm oil could significantly increase at least in

the short term.

1.2 Relevance of the project to the commodity strategy

One of the objectives of the intergovernmental group on fats, oils and oilseeds is to identify

specific problems calling for short-term action and consider measures that could contribute to

the solution of medium and long-term problems in the fats and oils sector.

The proposed project has, through market based technical assessment of the oil palm sectors

in the target countries identified problems that limit the potential of the oil palm in the region.

Then, by analyzing the factors that have contributed to the success oil palm in SES,

interventions have been formulated to address specific problems along the value chain in both

the short and long term. Emphasis has been laid on improving the productivity and

competitiveness at the enterprise level. However, to ascertain project success and

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sustainability, issues of productivity and competitiveness at the farm level have also been

addressed. The risks for environmental degradation emanating from activities relating to palm

oil production and processing have been recognized and addressed both at the farm and at the

processing level. This project for example favors the rehabilitation of existing palm oil

plantation in the target countries as opposed to the clearing of tropical rain forest for the

establishment of new plantations. Furthermore cleaner production technologies including

waste minimization and by product utilization will be promoted at the enterprise level. The

project focuses on individual and group training and empowerment at the community level

and particularly in supporting small-scale entrepreneurs to develop or improve their crude

palm oil processing for improved market access.

2.1. World Overview

The oil palm is a highly versatile crop grown mainly for its fruit bunch that contains 23 to 30

% oil and is the highest yielding of vegetable oil crops. National average yields exceed 3 tons

of oil per hectare/year in Malaysia, Indonesia and Colombia, compared to less than 2 tons per

hectare for canola, groundnuts and sunflower seeds. Although, the oil palm is native of West

Africa growing from the gulf of guinea inland 100 to 150 Km towards North (100

N), the

national average yields are estimated at only 2.5 tons/hectare. The most favorable agro-

climatic areas for the oil palm are 1,780 to 2,280 mm rainfall per year, average maximum

temperature of 30-32°C minimum of 21-24°C, high relative humidity and total sunshine hours

of not less than 1500 per annum. The major oil palm producing countries in Africa are

therefore Nigeria, Ivory coast, Ghana, Democratic republic of Congo, Cameroon, Benin Togo,

Sierra Leone, Liberia, Guinea, Central Africa, Equatorial Guinea, Sao Tome and Principe,

Tanzania, Gabon, Angola, Burundi and Madagascar.

In SES most of the oil palm is produced in large and medium scale plantations. Small scale

organized production has also been reported in some SES countries. However, in Africa,

most of the oil palm is cultivated in small and medium scale holdings with fewer large-scale

plantations. Wild groves are also vast and common.

The Palm oil was the first vegetable oil to be commercialized. In 1961, 78.1 % of the world

palm oil production was from Africa while Asia contributed only 19.3 %. However, in 2002,

Africa’s contribution hugely declined to 6.4 % while Asia’s share increased to 87 %. Latin

America, (where the plant was only introduced in the mid 1970’s) already contributes to 5.9

% of the world production. In 2002, the total world production of palm oil was 24.9 Million

metric tones, with Africa contributing 1.34 Million tons while Asia and Latin America

contributed to 21.4 and 1.57 million tons respectively.

By products of the oil palm industry include; the palm kernel that also contains about 45 to

50% oil, the fiber recovered from fruits that is used as fuel, shells of the kernel used as gravel

for the maintenance of access roads and for production of reinforced slab, flooring tiles and as

fuel. The press cake that contains 18 % protein is largely used as livestock feed. In fact, the

kernel meal is an excellent fuel for boilers necessary in the oil extraction firms. The empty

fruit bunches are also used as fuel after drying or returned to the farms for mulching or as

manure.

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Sap tapped from palm tree trunk (stem of the felled tree), is fermented to produce wine or

alcoholic beverage. The wood is some times used for construction; the huge potential for

utilization of the wood of palm tree after felling is not yet widely exploited. In Malaysia, oil

palm fronds and trunks have been successfully converted into raw material for furniture. The

stems of the branches are used for weaving baskets.

Production costs for palm oil vary considerably from one country to another depending on

yields, labor wages and foreign exchange rates. Indonesia is probably the world’s lowest cost

producer with high yields and low wages. With a share of over 54% (18 million tons), palm

oil dominates the global vegetable oil export trade. Soybean oil is a major competition to the

palm oil as soybeans are principally produced for the protein rich meal and the oil is only a

by-product with the oil contributing only 30-40% of the total product value of soy beans.

Consequently, palm oil prices are subject to wide price fluctuations as they are linked to soy

bean oil supply and prices. Despite this, palm oil is still a profitable business as has been

demonstrated by Malaysia.

Historically, oil palm plantations and the oil palm industry were developed by big agro –

industrial groups. However, due to land constraints relating to land tenure, land use rights of

local populations, conservation of forests and protection of the environment large

development projects the world over are slowing down in favor of small-scale plantations (a

few hectares to a few dozens of hectares). The shift towards small-scale production creates

enormous potential for Africa where currently most of the oil palm is produced in small- scale

holdings.

The oil palm, (a dynamic and versatile crop) can thus be developed to play a key role in the

sustainable development of many parts of the tropics and the developing world. It has been

suggested that as the oil palm is highly productive, it can provide a family with decent living

from a smaller area of land than most other crops.

2.2. Oil Palm in Africa

The demand for the palm oil in the African region is growing mainly due to increased

incomes of the people of the region, increased use of palm oil for none food applications such

as soaps, margarine and non- traditional refined edible palm oil. The current demand in the

West African region alone was approximately 2.1 million metric tones in 2003.

In addition, to the wild groves that cover an estimated area of 2.3 million hectares, more than

60% of palm oil cultivated in the West African countries comes from small private holding

farms. The farmers intercrop their palm farms with food crops such as Cassava, Yam, Plantain

and other cash crops to increase their food security

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Table 1: Production of palm oil World and Africa and four major palm oil producing

countries. Nigeria, Ghana, Cameroon and Ivory Cost (‘000 metric tons):

Country/year 1998 1999 2000 2001

2002 2003 2004 2005

FAOSTATS/FAO statistics Division

1.3 Constraints Hindering the Development of Palm Oil Industry in West Africa

In 2003 UNIDO and national partners in Nigeria, Ghana and Cameroon conducted studies

along the palm oil value chain from production to market. These studies highlighted many

sector-specific constraints and opportunities many of which are common across the region.

The main constraints affecting the utilization of the oil palm in West African countries

include; lack of Integration of the upstream sources and downstream processors;

fragmentation of the sector, lack of coordination between the operators of the sector (research

institutes, raw material suppliers, processors and traders); inefficient process technology at

small scale level for producing competitive products, little concern to the environment; lack of

access for improved technology and absence or very low level GMP, Quality control and

HACCP, low degree of by-product (wood the stems, leaves, wood, kernel cake, shells

utilization) in small and micro processors, low level of design and manufacturing of small

scale palm oil processing equipment, and, inability to disseminate the technologies.

In December 2003, UNIDO held an expert group meeting in Akosombo, Ghana that brought

together a group of palm oil experts from Cameroon, Ghana and Nigeria. The EGM consisted

of industry leaders, leaders from the organized private sector, farmer associations, financiers,

policy makers, and palm oil research scientists. This EGM was held to discuss and to

recommend possible options for market based development of the oil palm sector and to

Malaysia 8,319 10,554 10,842 11,804 11,909 13,355 13,976 15,130 Indonesia 5,100 6,250 7,000 7,480 8,850 10,530 12,080 12,800 Thailand 405 495 525 535 650 640 668 670 Papua New Guinea 215 264 336 325 304 326 345 350 sub total Asia 13,824 17,299 18,367 19,819 21,409 24,851 27,069 28,950

Nigeria 690 720 740 750 775 915 920 920 Ghana 183 195 215 236 259 108 114 114 Cote D'Ivoire 275 282 266 275 270 310 292 292 Cameroon 120 133 140 145 151 162 172 158 sub total Africa 1148 1330 1361 1406 1455 1495 1498 1484

Colombia 424 501 524 547 520 526 631 660 Ecuador 200 230 238 240 245 220 261 290 Costa Rica 115 110 113 123 140 155 195 200 Honduras 88 80 78 94 94 158 170 185 Brazil 89 93 97 110 115 129 142 160 Venezuela 54 68 81 84 83 54 54,3 54,3 Guatemala 47 52 58 70 71 85 87 90 subtotal Latin

America 1232 1398 1525 1593 1572 1327 1540,3 1639,3

Others 715 604 572 537 531 882 897 903

TOTAL 16,919 20,631 21,825 23,355 24,967 28,555 31,004 32,976

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develop a draft proposal to improve the potential contribution of the oil palm contribution to

the national economies in the region.

After reviewing the reports produced by the consultants on the oil palm status and sector

papers presented by the various governments, recommendations were made as follows;

1. Marketing strategies and targets

The West and Central Africa (WACA) region is a vast market representing nearly 350

million people. There are numerous market opportunities for palm oil products in the

region; because of the proximity of this market and of existing trade agreements, these

opportunities may be more profitable than those offered in more distant markets.

A trade liberalization agreement exists within the ECOWAS sub-region but is not

being enforced by ECOWAS countries. Information related to the agreement should

be widely disseminated among industrialists and a mechanism for ensure compliance

in all countries should be devised and implemented. This would ensure a preferential

trade in palm oil products within the region.

The Organized Private Sector in the various countries of the region should evolve a

mechanism for market and commodities information gathering and distribution to their

members.

Standards Organizations in the region should establish common standards in tune with

international standards for palm oil products.

To benefit from economies of scale, achieve high quality and ensure competitiveness,

investors need to upgrade the scale of processing operations.

A benchmarking study should be carried out to identify production cost drivers and

enable the formulation of intervention programs to lower those costs.

2. Management of agriculture for industrial development

Countries of the WACA region should evolve strategies for mobilizing farmers and

other producers groups (e.g. processors, traders, etc…) to enable the revival of old oil

palm plantations and the creation of new ones.

A study should be carried out to establish the optimum size of a processing unit and

the size of the catchments area needed to supply the raw materials

A capacity building program targeting oil palm growers should be developed to

increase farmers skills not only in agricultural techniques but also in agro-business

management and entrepreneurship.

3. Financing for agro-industrial development

Agro-business requires a long term financial commitment. Current lending practices at

high interest rates and over short periods are not favorable to the development of agro-

industries. Soft credit facilities offering low interest rates and long repayment periods

should be sought and communicated to palm oil sector stakeholders.

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4. Opportunities for hardware manufacturing for industrial applications

The development of agro-industries requires the acquisition of various types of

equipment from farm machinery to processing factories and transportation equipment.

When importing equipment, efforts should be made to identify components that can be

manufactured locally and contract them out to local firms. This would reduce the cost

of the equipment and give business opportunities to local firms.

A hardware manufacturing strategy including engineering design, standardization,

capacity building, commercialization and support to key institutions should be

developed and implemented.

5. Manpower and skills development

There is great need to establish centers of excellence for appropriate technology

development; such centers should set up pilot facilities to serve as models for

replication by the private sector, as training centers for entrepreneurs and as source of

information on profitability to be used by potential investors.

Skills and manpower development centers in the region should be identified and their

needs assessed so that a capacity building program can be formulated. The program

should focus on entrepreneurship development, policy formulation and

implementation, capital goods production (especially agro-processing machinery), and

in total quality management to meet international standards

6. Alternative livelihoods

Farmers who are displaced from their land or whose land is used for the supply of raw

materials to a processing factory should receive compensation for their land preferably

in the form of an equity share in the processing factory.

Farmers should be encouraged to form association such as cooperatives or

shareholders’ groups.

Skills training programs should be set up to address the needs of farmers, particularly

those whose lands are being used to supply agro-industries.

Displaced farmers should be considered for employment in new infrastructure such as

health centers and clinics, schools, recreational facilities, and water and electricity

services.

7. Environmental impact

For the sustainable development of agro-industries, it is imperative to introduce soil

fertility management and water conservation strategies that are environmentally

friendly. Cleaner Production methods at the enterprise level should be adopted to

ensure proper handling of effluents from processing factories.

A biodiversity preservation program and reforestation strategy should be undertaken

by crop research institutes and forestry services in each country of the region for a

sustainable exploitation of oil palm resources and for greater protection of forest

resources

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8. Infrastructure development strategies

Roads, electricity and water availability in the rural areas is instrumental to the

development of agro-industries. National development strategies should put greater

emphasis on the provision of such essential utilities, as well as other social

infrastructure such as health centers, schools, markets, etc…

Innovative ways of public and private sectors partnership in rural infrastructure

development should be sought and encouraged.

Therefore, the development of agro-industries in the WACA region, particularly those based

on palm oil, stands to contribute to raising farmers’ income, creating employment in rural

areas, stimulating the provision of basic infrastructure and bringing accelerated development

in areas that have so far been neglected in the development process.

Thereafter representatives from the participating governments requested UNIDO to:

Play a catalytic role, in mediating the development of the palm oil-based agro-

industries by building capacity among the stakeholders, assisting governments in the

formulation of supportive policies and assisting the private sector improve its

industrial competitiveness.

Formulate interventions and develop strategies that will strengthen the palm oil sector

particularly in the areas of policy formulation, capacity building, benchmarking and

competitiveness.

Facilitate recurrent meetings of the Expert Group to assist in the monitoring and

guidance of programs to sustain the palm oil sectors.

*Subsequent follow up by the project national team members and new partners not

represented at the meeting has resulted in the current proposal.

2. Institutions involved and responsibilities

2.1. Supervisory Body (SB)

The Intergovernmental Group (IGG) on Oilseeds, Oils and Fats an organization under the

umbrella of FAO will supervise the project. The IGG was established in 1965 and provides

the only international forum for countries to discuss global oilseeds, oils and the oil meals

market situation and outlook, to exchange information and take up policy issues that can have

implications for production, trade, consumption and food aid. One of its objectives is to

identify specific problems calling for short-term action and consider measures which could

contribute to the solution of medium and long-term problems. It is open to all FAO member

nations and associate members substantially interested in oilseeds, oils and the oil meals

market.

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Intergovernmental Group on Oilseeds, Oils and Fats

Peter Thoenes Commodity Specialist and

Secretary, Intergovernmental Group on Oilseeds, Oils and Fats

FAO, Commodities and Trade Division

Via Terme Caracalla, 00100 Rome, Italy, Phone: +3906 57053498

2.2. Project Executing Agency (PEA)

The United Nations Industrial Development Organization (UNIDO) will function as the

Project Execution Agency (PEA) and will assign a Project Manager for the project.

United National Industrial Development Organization (UNIDO)

Agro-Industries and Sectoral Support Branch, Food Processing Unit

P.O. Box 300, A-1400 Vienna, Austria

Tel: (0043) 1 260 26 3846

Fax: (0043) 1 213 46 3846

Email: K.Bucyana@unido.org

UNIDO as the United Nations specialized agency for industrial development will take over

the role of the PEA due to its longstanding experience with implementation of technical

assistance projects, particularly in African countries.

UNIDO has the required logistic and administrative infrastructure in WACA (Regional

Office in Nigeria and Country Office in Cameroon) to assure smooth implementation and

management of the regional project activities in the field;

Various line Ministries and organizations in the countries need to be involved tackling the

entire value chain, from the raw material supply to processing and marketing. In order to

coordinate the interests of these entities, an objective and independent PEA institution is

required; UNIDO as an Honest Broker is in the position to strengthen the required inter-

ministerial cooperation;

Within its Project Development and Technical Cooperation Division (PTC), the AGRO

industries branch will provide an experienced Project Manager from the Food Unit;

PTC/PSD (private sector development branch) of PTC will provide assistance on

entrepreneurship development;

Experience and lessons learned from prior and on-going UNIDO projects particularly in

West and Central Africa will be a valuable asset for the successful implementation of the

project.

UNIDO is familiar with the implementation of CFC projects. UNIDO is currently

implementing the following CFC financed projects: 1. MARKET-BASED DEVELOPMENT WITH BAMBOO IN EASTERN AFRICA -

EMPLOYMENT AND INCOME GENERATION FOR POVERTY ALLEVIATION

2. INDUSTRIAL DEVELOPMENT OF SORGHUM MALT AND ITS UTILIZATION IN

THE FOOD INDUSTRIES - GHANA AND NIGERIA 3. HIDES AND SKINS IMPROVEMENT SCHEME IN SELECTED WEST AFRICAN

COUNTRIES (BURKINA FASO, MALI, NIGER AND SENEGAL)

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2.3. Collaborating Institutions

In Nigeria the major collaborating institutions (Collaborating Institutions –CI) will be

Nigerian Institute For Oil Palm Research (NIFOR) and the Projects Development

Institute (PRODA).

NIFOR will be involved in activities focused on improving productivity at the farm level

including the transfer of small-scale oil palm producing implements. The institution will be

key in the dissemination (in Nigeria) of oil palm varieties/hybrids found most suitable for the

region. NIFOR- has been in research on oil palm since 1930’s. It was established as Oil Palm

research station OPRS in 1939 to serve for Anglophone West African countries. In 1951 the

centre became the West African Institute for oil Palm Research (WAIFOR) in Benin City Edo

state Nigeria with branch stations in Ghana and Sierra Leone. With independence of the

countries In 1960’s the centre started serving as research centre for Nigeria as NIFOR

(Nigerian Institute for Oil palm research). Since then the research institute has played very

crucial role in the development of the Oil Palm in Nigeria and other neighboring countries.

PRODA’s mandate focuses on Power Equipment Systems and Accessories. PRODA will

thus be involved in the training of small-scale entrepreneurs in palm oil processing

(involvement at the enterprise level). PRODA has in the past been involved in the designing

and fabrication of SME food processing machines for palm oil and palm kernel cracking,

steam cookers, digesters and clarifiers. PRODA has also been involved in training

stakeholders in the use of the machines and has fabricated and supplied palm oil processing

machines to rural women’s groups.

In Cameroon, the major collaborating institutions (CI) will be the Specialized Regional and

International Research Center on Oil Palm (CEREPAH), P.O .Box 2123Yaoundé,

Cameroon, and, The National Center for Studies and Experimentation of Agricultural

Mechanization (CENEEMA).

CEREPAH will be involved in the dissemination of oil palm varieties in Cameroon. The

Institution will also be involved in the training of farmers on production methods necessary to

achieve highest yields possible. CEREPAH is the main governmental Agricultural Research

Institute in Cameroon. Its activities cover 5 domains namely: Annual crops, Perennial crops,

Forest and Environment, Animal and Fisheries and Farming Systems. CEREPAH is

responsible for designing and implementing and disseminating research on oil palm. Their

main activities include, selecting and improving oil palm varieties, improving farming

systems with special focus on small-scale growers and seed distribution.

CENEMA will be involved in the transfer and standardization of appropriate oil palm

production technologies (farming implements for oil palm producers in Cameroon).

CENEEMA is a public industrial and commercial establishment under the Ministry of

Agriculture and Rural Development. It is responsible for defining and implementing

Government policy in the area of agricultural mechanization. To this end, it is in charge of:

Studying and adapting machines to the agricultural conditions of Cameroon;

Testing and then approving agricultural machines intended for rural areas;

Training agricultural machine users and farmer leaders;

Elaborating, on request, agricultural project files notably in the area of agricultural

mechanization;

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Providing services on behalf of third parties;

Ensuring assistance to individual and corporate bodies in the area of agricultural

mechanization

Other institutions that may be involved in the implementation of the project activities

especially as members of the steering committee will include:

The Association Africaine pour le Developpement du Palmier à Huile et Autres

Olegineux Perennes, a regional Palm oil body will be involved in activities relating to the

review of the regional policy on palm oil. In addition, collaboration will be sought towards

the end of the project in the organizing of a regional conference on palm oil. The project will

use the conference as a platform for a wider regional dissemination of the positive outcomes

and lessons learned during the project implementation process.

Association Africaine pour le Developpement du Palmier à Huile et Autres Olegineux

Perennes, 15 BP 341, Abidjan 15, Ivory Coast

Oil Seeds Association Of Nigeria (OSAN)

OSAN was formed in 1994 with the objective of promoting the development of oil

seeds in Nigeria. Its members include farmers, millers, manufacturers, exporters, and

research institutes in the oil seeds sector. It is a national umbrella organization for oil

seeds producers and processors and acts as pressure group that promotes the

development of the industry. Involvement of this institution would be at the marketing

level.

PPLC in Cameroon

PPLC has an established research department for the multiplication and propagation of

seedlings.

3. Project Organization and Management

Project coordination. The PEA will identify and recruit a highly qualified national project

coordinator (one for Cameroon and one for Nigeria) to manage the implementation of the

project at the national level. Regular meetings will be organized between the two project

coordinators. The NPC will be under the supervision and will report directly to the UNIDO

project manager, managing the execution of the project. The UNIDO project manager will

manage the execution of the Project in direct cooperation with the UNIDO Field Offices in

Cameroon and Nigeria. The offices in the two countries will be utilized for financial project

administration, coordination activities and logistical support to serve the collaborating

Institutions (CI) and other stakeholders.

UNIDO as PEA has standing agreements with the Ministry of Trade & Industry in each

country (Nigeria and Cameroon) with regards to tax exemption for project expenditure.

In Cameroon the major line (counterpart) ministries involved in the project execution will be

the Ministry of Agriculture and Rural Development and the Ministry of Commerce. Support

will also be sought from the:

Ministry of Industry, Mines and Technological Development (Cameroon)

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Ministry of Economy and Finance (Cameroon)

Ministry of Scientific Research and Innovation (Cameroon)

In Nigeria the major line (counterpart) ministries that will be involved in the project

implementation will be the ministry of Commerce and the ministry of Agriculture. Support

will also be sought from the ministry of Trade when needed.

Steering Committee

In each participating country a NPSC will be established, composed of the line ministries as

described above, the respective IA’s and representatives from the private sector. The National

Project Coordinator will serve as the Secretary of the NPSC, and will call for regular project

meetings. He/She will report to the Project Manager. The NPSC’s will supervise the

implementation of project activities within their respective countries and conduct the short-

term planning according to the national project work plan, under the directives received from

the Regional Project Steering Committee (RPSC).

The RPSC is composed of the Project Manager, the NPSC’s from Cameroon and Nigeria a

representative of the SB and a representative of CFC. The Project Manager will convene

meetings of the RPSC once a year; three meetings are foreseen in Nigeria and in Cameroon.

Fig 1. Project organizational structure

3.1. Members of NPSC’s and Collaborating Institutions (CI’s)

NPSC Members and CI’s for Nigeria:

Ministry of Industry (Main Counterpart)

Ministry of Agriculture (Secondary counterpart)

Nigerian Institute for Oil Palm Research (CI)

PRODA (CI)

OSAN (Oil Seeds association of Nigeria) (MSC)*

CFC

secretariat

IGG fats and

oils (SB)

PEA-Field

Offices

(UNIDO)

NPSC

Cameroon

CI

RPSC

NPSC

Nigeria

CI

PEA-HQ

UNIDO

12

Small and Medium Scale Oil Palm Processors MSC)

VODEP Presidential Initiative for Oil Crops (Vegetable oil Development

Programme) (MSC)

NPSC Members and CI’s for Cameroon:

Ministry of Industry, Mines and Technological Development (Main

counterpart)

Ministry of agriculture and Rural Development (secondary counterpart)

CENEMA: The National Center for Studies and Experimentation of

Agriculture and Mechanization (CI)

CEREPHA: Specialized Regional and International Research Center on Oil

Palm( CI)

Ministry of Scientific and Technical Research (MSC)

Ministry of Planning, Development Programming and Regional

Development (MINPLADAT) ( MSC)

Ministry of Commerce (MINCOMMERCE) (MSC)

Association of Processors of Palm Oil Products (ATPO) (MSC)

The Union of palm oil growers of Cameroon (UNEXPALM) (MSC)

o Chamber of Agriculture, Livestock and Forestry of Cameroon (CHAGRI)

(MSC)

PPLC: Palmol Plantation limited (MSC)

* MSC member of the steering committee

Private Sector Representatives

2 NPSC representatives (per country) form the private sector will be determined before the

start of project implementation.

4. Counterpart contribution and co-financing

UNIDO will provide a co-financing of cash contribution of US-$ 300,000 (Subject to

approval of the UNIDO Executive Board). Technical Support Service will be provided by the

PEA with a total of 6 work months valued at US-US-$ 15,000 each adding up to US-$ 90,000.

In addition to the in cash contribution, within the framework of its Integrated Programme

Phase I from 2000-2005, UNIDO has supported with over $100,000, activities to build

entrepreneurship capacities in Cameroon and Nigeria and plans to continue this support in

future activities; The institutional capabilities were strengthened (trainers trained; manuals

prepared; physical facilities upgraded; information system and data base established) and will

be utilized e.g. during activity 1.2.3. In addition UNIDO has already utilized USD 150,000 for

sector analysis in the three countries.

Table 4 in Annex 3 gives a detailed overview of in-cash and in-kind contributions that have

been committed by the co-financiers, UNIDO and other stakeholders.

13

Country Type of contribution US-$

In cash contribution –

(confirmed)

Cameroon Salaries of National Project Coordinators and

technical staff, Renovation of buildings, facilitation of

and workshops, provision of land for demonstration

plantations and for the procurement of some of the

equipment

800,000

Nigeria 500,000

Total Counterpart Contribution 1,300,000

The Private Sector

6 (4 in Cameroon and 2 in Nigeria) small-scale processing operations will be upgraded. The

selection of beneficiary enterprises will be based on their capacity to provide contribution in

cash and in kind of up to $5,000 adding up to $30,000. We propose to approach large-scale

palm oil processing companies in the three countries to commit a contribution of at least USD

$140,000. Total private sector contribution-USD170,000

Total UNIDO Contribution: $ 300,000.00

Total counterpart contribution: $1, 300,000.00

Total beneficiary contribution (small scale processors) $ 30,000.00

Private sector contribution $ 140,000.00

Grand Total: $1, 770,000.00

5. Objectives and Rationale

5.1. Project objectives

The long-term objective of the project is to promote the development of the sustainable

production and utilization of the oil palm in West and Central African countries, with a focus

on markets as the driving force behind such sectoral development. The project will contribute

to the reduction of poverty in rural areas where palm oil is widely cultivated creating rural and

urban employment and value-addition to ultimately improve the economy of the target

countries.

To achieve this, the project will address technical input requirements in present oil palm

production systems to increase productivity quality and value by; improving the

diversification of products with large sustainable markets from the oil palm; providing

increased access to markets for producers, and, providing an environment for more equitable

sharing of benefits amongst stakeholders. Technical support will be provided in the

dissemination of tested and proven interventions along the value chain. Models will be

developed along proven options in pilot trials and then replicated in other locations within the

framework of the project.

The project will achieve its objectives by focusing its interventions on three areas as follows:

14

Improving the technological and skills inputs in palm oil processing through technology

transfer.

Developing capacity for the sustainable development and supply of fresh palm fruit

bunches.

Improving market access and competitiveness for palm oil produced in the region.

5.2. Project Rationale

This proposal is based on several facts.

1. Palm oil can play a key role in sustainable development in many parts of the tropics.

Because it is highly productive, oil palm can provide a family with decent living from

a smaller land area than most other crops. Past development efforts to develop the

palm oil industry in the region have however been hampered by an environment not

conducive for industrial development and a volatile political climate that has in many

cases resulted in the destruction of infrastructure and national expertise.

2. With the existing and improved political calm in the two target countries the risks to

project failure are minimized and development agenda can be pursued. This project

proposes to replicate and improve in Africa (-the origin of the oil palm) on the

successes of oil palm production and processing demonstrated in South East Asia

(SES). Currently, SES is the dominant region of oil palm production accounting for

83% of the world’s palm oil production. Malaysia is presently the world’s leading

exporter of palm oil having a 60% market share with export figures at 9.3 million

metric tonnes.

The Case of Malaysian and Indonesian Oil Palm Industry The palm oil industry in Malaysia has been cited as the key injecting the

much needed economic growth and rural development. In Malaysia, oil

palm presently occupies 3.7 million hectares with 60% under private sector

plantations, 30 % under government supported schemes, and 10 % under

small scale producers. According to the 2002, Malaysian palm oil association

report, the national fresh fruit bunch yield per acre was recorded at 17.98

tons/hectare with an extraction rate of 19.91 %. The oil palm sector provides

direct employment for more than 400,000 people plus other multiplier effects

and spin offs. It is a major foreign exchange earner with reported earnings

of RM 27 billion in 2003.

In Malaysia, the success of the oil palm is attributed to many factors which

include favorable climatic conditions, well established infrastructure,

management skills and technology for palm oil cultivation and a land

ownership structure which favors land scale estate type production.

Scientific and managerial aspects that have contributed to the success of the

crop in SES include genetic improvements and production of high quality

planting materials, the development and application of sound agronomic

practices, efficient organization of the palm oil plantations and the

continuous R&D in the various disciplines such as crop physiology,

agronomy genetics etc. It can be surmised that intensive R&D (both the

public and private sector are involved in R&D) accounts for the sustainable

production and competitiveness of the oil palm in SES. Notable is the

15

campaign on improving productivity in the oil palm industry and the

accelerated replanting programmes that are supported by the government.

Several challenges however face the oil palm industry in the South East

Asia-the main one being labor productivity. At present, labor in Malaysia,

the dominant producer is a problem. Consequently, oil palm yields have

stagnated over the last 20 years with oil extraction ratios falling below 20%

due to the inability to maintain correct harvesting standards. It is estimated

that one man can produce 70 tons of palm oil per year compared to 70 tons

of soy oil possible per man per week. It has therefore been predicted that

unless labor productivity is improved, palm oil could have a higher

production cost that Brazilian and Argentinian soya oil.

3. The stagnating productivity in Malaysia has led to the aggressive expansion programs

in other SES countries competing to meet the market deficit-a good opportunity for

Africa to jump on board.

4. Due to its intrinsic qualities the palm oil on the global oils and fats scene is an

important and versatile raw material for both food and non-food industry. Being

competitively priced and nutritionally whole some, palm oil contributes to the diets of

millions around the world particularly the worlds poor. FAO estimates that there are

still 780 million chronically malnourished people in the developing world where

thousands succumb to starvation every day. At 182 giga joles per hectare palm oil

could significantly contribute to the providing calorific energy for the starving

millions the majority of whom are in sub-Saharan Africa.

5. There is an estimated doubling in demand for palm oil (for food, industry and bio

diesel) by 2020, which translates into a doubling of area under palm oil cultivation

(6.5.Million Ha) if yields remain the same. Opportunities therefore exist in the present

for the African countries to enter into oil palm production and global palm oil trade to

meet the deficit from SES. However to achieve this their products will need to meet

the market demands in terms of quality and price-the products must be competitive

and the region will need to venture in sustainable and integrated oil palm production

systems.

6. The Potential of the Oil Palm in West Africa

Table 2. Comparison of the performance of the oil palm sector in Malaysia and the

region

West Africa now West Africa possible

(from research

bodies)

Malaysia now

Tonnes bunches/ha 8 25-30 30

Oil yield 12% 18-22% 22%

Tonnes palm oil/ha 2.5 4-7 6.6

Tonnes kernel oil 0 0.2-0.3 0.33

The above table indicates that with improved agronomic practices and improved processing

technologies the African oil palm sector can compete in terms of yield and costs with the

Malaysian producers.

16

Africa has the cumulative advantage in oil palm production; A climate that favors the

cultivation of the oil palm, traditional experience in the cultivation of the oil palm,

extensive utilization of the crop not only for palm oil production but also for the palm kernel

oil, palm wine, vegetables etc. In addition, there exist a huge regional market (Table 3) for

the various products possible from the oil palm. Furthermore, despite the scourge of

HIV/Aids that is affecting labor supply in the Sub-Saharan Africa, labor the major constraint

in the leading palm oil producing countries is readily available as well as affordable (cheaper)

in Africa.

Africa therefore can competitively build and develop her infant palm oil industry for

economic development and poverty alleviation following best practices proven in South East

Asia.

Table 3.

IMPORTS VALUE (1000 US$)

Commodity Cameroon Central African

Republic Nigeria

Equatorial Guinea

Palm oil 11,184.00 538 180,000.00

2004

Soya sauce 3 10

Soybean cake 5,724.00 5,700.00

Soybean oil 8,767.00 413 850 2,542.00

Soybeans 1 33

Palm oil 13,009.00 103 160,000.00

2003

Soya sauce 4 165

Soybean cake 3,719.00 6,800.00

Soybean oil 10,629.00 246 1,500.00 4,528.00

Soybeans 14 600

Palm oil 4,482.00 91 187,000.00

2002

Soya sauce 2 122

Soybean cake 4,170.00 4,500.00

Soybean oil 5,125.00 56 900 2,411.00

Soybeans 104 123

Palm oil 1,082.00 169 169,000.00

2001

Soya sauce 6 100

Soybean cake 3,706.00 6,800.00

Soybean oil 2,378.00 32 400 770

Soybeans 174

Palm oil 1,861.00 197 97,500.00

2000

Soya sauce 1 10.84

Soybean cake 2,314.00 3,034.23

Soybean oil 2,573.00 116 80.36 770

Soybeans 174 851.71

FAOSTAT | © FAO Statistics Division 2006 | 09 November 2006

17

Table 4. Palm Oil Exports from WACA

EXPORTS VALUE (1000 US$)

Commodity Cameroon Central African

Republic Nigeria

Equatorial Guinea

Palm oil 8,958.00 3,500.00

2004

Soya sauce

Soybean cake 52

Soybean oil 5

Soybeans 2,500.00

Palm oil 13,660.00 7,000.00

2003

Soya sauce

Soybean cake

Soybean oil 5

Soybeans 2,500.00

Palm oil 3,777.00 3,250.00

2002

Soya sauce

Soybean cake

Soybean oil

Soybeans 2,100.00

Palm oil 3,688.00 5,000.00

2001

Soya sauce

Soybean cake 110

Soybean oil 130

Soybeans 1,800.00

Palm oil 4,134.00 5,000.00

2000

Soya sauce 0.1

Soybean cake 51

Soybean oil 159.79

Soybeans 1,980.00

FAOSTAT | © FAO Statistics Division 2006 | 09 November 2006

7. Project strategy

The project strategy has been developed utilizing the value chain approach with interventions

formulated to target critical areas along the value chain from production of the raw material at

the farm level to processing at the enterprise level and marketing. Emphasis has however been

laid on the value addition with focus on small scale palm oil processing enterprises.

Specifically, the project will achieve its objectives by focusing its interventions on three areas

as follows:

Improving the technological and skills inputs in palm oil processing through technology

transfer.

Developing capacity for the sustainable development and supply of fresh palm fruit

bunches.

Improving market access and competitiveness for palm oil produced in the region.

18

To achieve the desired results in each of the three areas above the project will initiate

stakeholder training, exchange of experiences and technology transfer both between the

countries and from Malaysia and Indonesia. The training and technology transfer will be

supported by pilot operations to evaluate the practical efficiency of the proposed technologies.

The pilot operations will include;

-6 pilot centers (4 in Cameroon and 2 in Nigeria) will receive assistance with palm oil

processing and by product utilization

-Small- scale plantations/farms within a 5 km radius of the selected pilot centers will

be assisted to rehabilitate and replant existing plantations with better varieties using

improved production methodologies that are environmentally friendly. To avoid

serious environmental degradation that results from the clearing of tropical rain forests

during the creation of palm oil plantations, this project will promote the rehabilitation

and replanting of existing palm oil plantations that are unproductive in place of

promoting the development of new plantations. In addition as much as possible the

possibilities of intercropping oil palm with other crops will be explored to avoid

problems associated with monoculture production systems.

-In addition, assistance will be provided to the pilot centers established to produce

products meeting quality specifications demanded by the market. Clustering of small -

scale processors and farmers will be promoted so as to increase the capacity to supply

in volumes required.

All interventions will lay a strong emphasis on creating south-south cooperation especially in

regard to technology transfer and technical capacity building between WACA region and

South East Asia, in particular with countries like Malaysia and Indonesia. It is expected that

this approach will further contribute to the establishment of long-term dialogue between the

two continents. Costa Rica known for the supply of oil palm genetic resources has been

contacted for possible collaboration in the implementation of this project.

7.1. Farm Level

At the farm level, efforts will be made to improve yield and productivity per hectare by

promoting; the utilization of high yielding quality planting material, improved management of

the oil Palm plantation, increase utilization of inputs such as fertilizers and pesticide.

Horizontal and vertical linkages will be established between farmers and processors.

7.2. Enterprise Level

At the enterprise level, the project will focus on technology transfer for both the extraction

of crude palm oil and by product utilization. In addition the technical and business and

entrepreneurial capacities will be upgraded. The market supply capacity of the producers

will be enhanced through the creation of vertical and horizontal linkages. By improving the

technology of the small and micro processing companies who at the present produce more 60

% the palm oil produced in Nigeria and Cameroon, the small-scale factories that extract only

10 to 14% of the available 23 to 30 % oil in the fruit. This efficiency can be improved to 17 to

20 % by improved technology and technical skills capacity upgrading (training). In addition

19

the quality of the oil palm produced in the small scale processing industries will be improved

and harmonized with market requirements providing for improved participation in the national

and regional and even global supply chains. Vertical and lateral linkages will also be

established to improve raw material supply and inputs procurement at the farm and enterprise

level.

End pipe waste management will be promoted to minimize the negative impact of the palm oil

industry on the environment.

UNIDO proposes to support existing community based small - scale palm oil processors

(CBO’s) who have demonstrated entrepreneurial skills. UNIDO will support activities that

will enhance the performance of the said entities. Several feasible entities have been

identified both in Nigeria and Cameroon but a participatory stakeholders workshop to select 3

of the most suitable units to be supported in this project is scheduled to take place June 30th

.

It is proposed that the CBO’s will be reorganised to allow them to function more efficiently

and profitably and also to ensure that financial gains are fairly distributed amongst the

stakeholders. Based on past UNIDO experience a stock based CBO is proposed. The capital

investment will be translated into shares that the members can purchase. Dividends will also

be paid according to the number of shares. This increases member commitment and leads to a

higher success rates of the CBO’s.

The Proposed Management Structure of the CBO’s

BOARD

Management

Divisions e.g.

Production

Steering Committee

Working groups e.g.

Finance

Public relations

Marketing

Warehousing

Personnel

Accounting

Member promotion

20

Board of directors or Management Board is responsible for running the CBO and can only

make decisions on the explicit authority of the members. The members appoint the board of

directors. The steering committee control the decisions made by the board. The steering

committee consists of elected members.

The plant manager will be a qualified technical individual not necessarily a member of the

CBO but an employee with the major task of efficiently and profitably running the processing

unit. Plant employees can be part of the members but must be remunerated.

7.3. Policy Level

At the policy level, governments will be supported in the review of policies especially those

relating to the creation of an enabling environment that promotes investment in the

sector. These will include land ownership, infrastructure, incentives for foreign and domestic

investment etc without which it would be difficult to become globally competitive. The

development of a regional policy on the oil palm sector will be pursued.

Why focus on small- scale producers and processors

The objective of this project is to reduce extreme poverty by increasing rural incomes earned

from the production of the oil palm in the palm oil producing areas of the WACA region.

Lessons learnt from the palm oil sector in SES with regard to small holdings and the impact on

poverty reduction have been taken into consideration in the formulation and design of the

interventions.

Lessons from Malaysia The incidence of poverty in Malaysian rural areas declined from 21.8 per cent in 1990 to 11.8

percent in 1997. The decline in poverty) has been largely attributed to enhanced incomes from

agricultural smallholder program including those involving oil palm. Noteworthy is that 20.82

per cent of palm oil producers in Malaysia are independent smallholders under smallholder

schemes with the smallholder involvement in oil palm cultivation accounting for more than 41

per cent of the total oil produced in the country.

(www.unctad.org/infocomm/diversification/bangkok/palmoil.doc).

Lessons from Papua New Guinea Relative increase in incomes to small-scale producers of oil palm who are linked to large scale

oil millers in Papua New Guinea have been reported in a social-economic study conducted by the

Australian National university jointly with the Curtis University of Technology and Papua New

Guinea oil Palm Association (1997). However, also reported in the same document, were

conflicts (between small holders and the large oil millers) arising from lost incomes to the

farmers, due to the inability of the oil mills to collect, transport and process all the ffb’s that are

produced and delivered to the mill by the produced by the small-scale producers. Such loss

could be avoided if the small holders had the capacity to process the ffb into crude oil (which has

a longer shelf life). The crude could then be sold to the oil millers for refining in the off season.

In addition to reducing the post harvest losses due to lack of processing capacity this approach

would also contribute in the generation of additional non farm employment in the rural area

(sustaining production and livelihoods among oil palm small holders: a Social-Economic study of

the Bialla Small holder Sector)

21

8. Results and expected impact

The project is expected to strengthen cooperation and coordination between the various CI’s

and stakeholders with the target of providing sustainable training and other services to the

beneficries. It is believed that by focusing on sustainable palm oil production management

and development, on transfer of technology and expertise, and on improving the enabling

environment in which oil palm is produced, processed, marketed and used the livelihoods of

rural poor in oil palm producing areas can be improved.

The high productivity and versatility of the oil palm offers significant opportunities for

income generation at national and local levels. Employment creation will be generated along

the value chain from farm to the market, in oil palm support industries such as input suppliers,

(packaging materials, fertilizers, pesticides, equipment repair and maintenance, research etc).

Increased incomes will improve the purchasing power at the national level increasing demand

for products from other sectors, and thus stimulating economic development and industrial

development.

As the nature of the palm oil industry demands that industries are located near raw material

production centers, the project will contribute to rural development and could contribute to

slowing the rural to urban migration.

In particular, the project will achieve the following:

Policies that are conducive for investment in the oil palm sector in the region will be

developed

An improved and more efficient crude palm oil processing industry that is linked to the

global supply chains will be promoted. 6 pilot commercially operable demonstration

processing units will be established for technology transfer and technical skills upgrading

Improved marketing of final products through the establishment of linkages (forward and

backward as well as vertical and horizontal linkages ) between the various players along

the value chain.

A sustainable commodity supply is crucial to build up industries with a long-term

perspective. Support institutions supported during the programme in the target countries

will be upgraded to improve research and development of the oil palm and to provide

long-term training and service for oil palm production and processing in the region. The

institutions will be responsible for the training of trainers on the regional level, the

preparation of graphical training manuals to be translated into local languages, applied

research on technology to upgrade product quality etc. For sustainability it will be

proposed that a levy is applied for every liter of palm oil processed and marketed and will

be injected directly into the respective institutions.

The capacity of target institutions to provide extension services to farmers especially

small-scale holders upgraded.

A private sector led regional association of palm oil producers similar to (MPOA in

Malaysia) will be promoted to address regional issues relating to palm oil production,

processing and trade.

22

9. Feasibility and commercial viability of small scale processing in

Nigeria and Cameroon

9.1. Financial and economic viability of small scale processing of oil palm

National experts in Cameroon and Nigeria have conducted a preliminary diagnostic study of

the currently operational small-scale processors. The study identified the following constraints

for the existing inefficiency and lower profitability, and approaches to overcome these by the

project.

Poor logistics: Due the poor condition of road networks and other infrastructure, the

delay in transportation raw materials after harvesting leads to spoilage of palm fruits

which in turn reduces the quality and price of crude palm oil.

Strategy: Selection appropriate site for the factory and utilization of tractors specially

in the rainy season will increase timely transport of raw materials to the factory and

serves to dramatically reduce fruit spoilage and consequently the yield and the price of

the CPO.

Lower efficiency of process equipment (as low as 40%): Small scale processors

and the manufacturers of equipment in both Nigeria and Cameroon have little idea of

the efficiency of their equipment as they do not calculate their input and output. They

are more concerned about the ease of extraction than efficiency.

Strategy: Appropriate design/selection of extraction technology and training of

operators will increase the yield and the financial return upto 100%. The pilot centers

will demonstrate these possibilities

Lower quality product: Due to lack of training in process parameters by the small

scale processors, the CPO produced by small scale processors does not meet the

requirement of the large scale downstream processors which are the main constant

market outlets of the CPO.

Strategy: Training in control of process parameters and post handling of raw materials

and CPO will give the processors higher prices and consequently the profitability of

the investments

Weak linkage to the market: The survey conducted by the experts both in Cameroon

and Nigeria shows that the down the medium and large scale downstream processors

which presently work at lower than their capacity due to lack of raw material are

willing to source part of their input from small scale processors provided that the CPO

meets their standards.

Strategy: Through the pilot demonstration centers, the project will demonstrate that

longer term contractual agreements can be signed between the small scale processors

and downstream processors for continuous supply of CPO according to the quality

requirements/specification of the downstream processors thereby assuring the supply

of the CPO to large factories and guaranteed market to the small scale processors

23

9.2. Projected Financial performance for small-scale processors in Cameroon and

Nigeria

Financial performance evaluation of artisanal, small scale and medium scale enterprises was

performed in BOGSO (150 Km from Yaounde) region in Cameroon and Cross River State

region in Nigeria with the following results.

i) Artisanal Processors.

The artisanal processors using traditional small scale equipment and processing less that 1 ton

a day were found not competitive in terms of efficiency of operations, quality assurance and

guarantee and consistency of operations. Besides the use of firewood for the processing

operations is of environmental concern.

ii) Small-Scale processors using modern and more efficient processing technologies

According to the feasibility studies commissioned by CFC, 3 different scenarios of a palm oil

project were analyzed for the processing of 1,5 tons, 3 tons and 6 tons per hour with an

investment cost of (in '000 US$) 53, 92 or 169 respectively. The internal rate of return on

investment (IRR on Total Investment), was determined to be 52.7%, 80.15% or 93.24%

respectively.

9.3. Preconditions for small-scale processors establishing modernized small scale

processing mills ( Determinants of viability)

In addition to a minimum plant capacity of approximately 36 tons/day, other factors that

determine the viability of such an investment include sufficient raw material supply, and the

prerequisite infrastructure e.g. communication, power and water.

i) Raw material supply:

The location of the pilot models will be carefully selected to ensure consistent raw material

supply. The project, when selecting the final sites will take into consideration areas where the

government initiatives to increase the raw material supply have been implemented.

ii) Infrastructure:

Power supply is not a major constraint as the project proposes to use the by products to

generate power and in cases where electricity is not available the use of gensets that run on

crude palm oil is an option. Once gensets are installed it will be possible to access water

(pumps).

Poor road/rail networks complicate the logistics for the supply of raw material and the

marketing of the final crude palm oil and has contributed to the under performance of some of

the small scale operations. However, it has been determined that small scale enterprises

located near functioning motorways have fewer problems in delivering their products

throughout the year. The use of tractor trailers to deliver fruit from the plantations has been

found feasible. It is the intention of this proposal to install the model pilots on sites with close

access to the transportation.

24

iii) Investment capital

Investment capital has largely been unavailable to investors in the agro business sector, with

big lending institutions preferring to lend in less risky sectors such as trade and housing.

Processors in the past therefore have had to self finance or use micro credits whose upper

limit is much less than what is required for an estimated investment cost of over $70,000. Self

financing or an investment this size is also clearly not possible in the region This however has

been addressed within the initiatives by both governments of Nigeria and Cameroon which

have made access to financial investment resources in the sector possible.

Cameroon

Within the commercial banks and micro-credit systems there exist possibilities of

financing palm oil processing activities.

In addition the Cameroon government has launched a project called small Holder

Development Program (PDPV) with approximately 4.6 million Euro for the purpose of

crude palm oil production.

Nigeria

The Presidential Initiative on Palm oil (PSI) has a scheme that guarantees credit

availed to small- scale processors. The processors must apply for credit with detailed

feasibility studies and business plans. This is a function that UNIDO can support

using the blue prints developed in the various palm oil processing regions.

The lending rate of interest on loans for all aspects of the production of vegetable oils

is limited to 7%annually

The PSI is also working on making available long term financing

Micro credit schemes are also available although the amounts loaned are relatively

small to cater for the capital investment needs of a small scale processing about 40

tonnes/day.

iv) Conditionality for Credit Access

Even with the government providing guarantees for financing operations in the palm oil

sector, there is still a condition that applicants must submit a complete feasibility study and

business plan. Many of the processors based in the rural areas lack the capacity to conduct

these studies and therefore cannot benefit from the initiatives. The blue prints provided by

UNIDO will alleviate this problem.

v) Market

Fluctuating prices at the market place for crude palm oil has also discouraged investment

in the sector. However, with the government policies in both countries to regulate

quantities of imported vegetable oils into the country, the prices for the crude palm oil

have relatively stabilized.

Inconsistent quality: The technical inability of the artisanal processors to deliver crude

palm oil of consistent quality and standard specifications to the refineries who constitute

the major market for their product is a major constraint and has in the past limited market

access for small scale processor. In addition poor quality products fetch lower prices.

25

Important to note is that the studies indicated the oil refineries were willing to enter into

subcontract arrangements with the small scale processors as long as they were guaranteed that

the products would meet the quality specifications. They also indicated a willingness to

collect the crude oil from the processors as long as the volumes to be collected justified the

transport costs.

Noteworthy is also the fact that the market outlet for crude palm oil is varied with a large

quantity being marketed directly to other industries such as the soap making industries whose

primary raw material is the palm oil. Crude palm oil is also sometimes preferred for direct

utilization in the rural villages.

Interventions to address the constraints of volume, access to credit, quality and logistics are

contained in the project document. In the model demonstration centers, which will be

replicated by other communities (investors), UNIDO’s technical assistance will be provided to

improve the factors for lower efficiency along all the value chains mentioned above, the

profitability could be increased from 3 to 4 fold thereby guaranteeing commercial viability the

sustainability. Furthermore, clustering of these small enterprises will increase their

productivity and performance specially the joint marketing and transportation of the finished

products to the bigger factories.

9.4. Ownership model

Various options exist for the Ownership of the small- scale palm oil processing units. These

include sole ownership, company limited or a community based organization. Sole ownership

will largely depend on the capacity of the individual to access credit. In the case of an

individual investment, collateral is required before the credit is awarded. Many entrepreneurs

in the region do not have sufficient investment for collateral. The same principal applies for

a company limited leaving the most feasible option as that of a CBO. Little collateral is

required for CBO’s and the governments in both countries are willing to guarantees any credit

awarded to organizations.

10. Related projects and previous work

The following projects relating to the production of edible oils including palm oil are

currently under implementation by UNIDO

Under joint UN project for Human Security in the United Republic of Tanzania,

UNIDO is implementing a project that is focusing on improving the utilization of palm

oil for increased rural income generation. The project is to promote the use of the

palm oil for the generation of electricity. The project has been able to demonstrate

that clarified palm oil can be used in slightly modified gensets.

Also in URT UNIDO is implementing a project on sunflower seed processing in rural

Dodoma an area without access to grid electricity. The project is upgrading an

existing small- scale sunflower seed processing community based initiative into a pilot

but commercially operable demonstration and training unit. The project will promote

the use of the clarified sunflower seed oil in gensets to keep the production costs low.

26

Additional funds are being sought to install a closed loop edible oil processing system

in the area whereby the by products are used in gas generation for the supply of

energy.

In Sierra Leone within the UNIDO Sierra Leone integrated program, UNIDO is

implementing a palm oil project and establishing two pilot but commercially operable

demonstration units with focus on improving the efficiency of operations and

competitiveness for the small scale processors.

UNIDO has in also in the past successfully implemented projects targeting micro scale

processing of palm oil sector in Ghana

27

11. Activities and work plan

COMP 1: Technology transfer and skills development for increased productivity

Objective Increase the efficient use of production and processing inputs such as raw

materials and tools.

Output 1.1 Small- scale processors are able to use recommended palm oil and palm

kernel oil processing technologies.

Activity Description Months Responsible

Party

1.1.1

-In each country assess and identify pilot palm oil

processing units operated by community based

initiatives with potential for upgrading

-Assess and recommend upgrading needs in terms of

renovations, equipment and training requirements.

-Enter into an agreement that permits UNIDO to

upgrade processing equipment and thereafter to use

the facilities for technical and business skills training

1-4

UNIDO

AGRO

1.1.2 Based on renovation recommendations carry out

renovation works on selected units to meet

international guidelines for food processing facilities.

(4 units in Cameroon and 2 in Nigeria)

4-12

1.1.3 Based on the recommendations for equipment

upgrading procure, install and commission

equipment for both palm oil and palm kernel oil

processing and establish a model small –scale pilot

and commercially operable pilot demonstration unit

in each of the selected units

4-12

1.1.4 Provide direct technical assistance in the operation of

the processing units and the optimization of

processes

12-15

1.1.5 To ensure sustainability prepare and implement a

training programme on equipment repair and

maintenance.

12-18

1.1.6 Based on the training needs assessment prepare

modules and a training manual in small scale palm

oil processing, business management and

entrepreneurship

8-15

1.1.7 Use the training materials prepared to conduct

trainers training in palm oil processing, by product

utilization and waste (end pipe treatment at the

established centers) and in business management.

12-36

28

1.1.8 Using the trainers trained conduct training in palm oil

and palm kernel processing (business management

business plans, book-keeping, product costing) for

existing and potential entrepreneurs in selected

regions

15-48

1.1.9 Provide direct support start up operations for

commercialisation of the units

12-48

Output 1.2. Small scale processors are able to use technology and skills transferred to

process and utilize by products and waste from the palm oil processing

Activity Description Months Responsible

Party

1.2.1

In the palm oil processing units established above,

assess potential quantities of by products that will be

generated. Assess the quantities of other oil palm

byproducts including the wood or trunk press cake,

kernel shells, empty fruit bunches, leaves, fibres etc

within a radius of 5 Kms.

Identify by products from palm oil extraction that have

a market potential

Identify and recommend technology and training needs

for feasible specific by products/waste

processing/utilization

1-4

UNIDO

AGR

ECPB

1.2.2. Based on the recommendations, procure, install and

commission equipment preferably on same sites as the

palm oil processing units.

4-12

1.2.3. Based on the training needs assessment, prepare and

implement a training program for trainers and then for

selected communities on by product processing (animal

feed, palm wine, energy generation etc)

12-48

1.2.4. To enhance knowledge on by product utilization

Conduct a study tour for selected entrepreneurs and

extension staff to Malaysia and Indonesia on palm oil

by product utilization

12-18

1.2.5 Provide direct technical assistance in the start up

operations of the by product processing units and the

optimization of processes and in the commercialization

of the by products in selected units.

12-48

29

COMP 2: Developing the capacity for the sustainable development and supply of raw

material (FFB)

Objective Increase the quality and quantity of the raw material (FFB).

Output 2.1. Oil palm farmers are planting new and improved varieties of the oil palm

and are able to use new farm management practices and recommended

agricultural tools

Activity Description Months Responsible

Party

2.1.2 Assess the current farm management practices and

quality of planting materials in selected farms and

identify constraints that lead to low productivity of oil

palm plantations at the farm level. Make

recommendations

1-4 UNIDO/

AGR

2.1.2. Based on the findings (of activity 1.4.1.) establish pilot

model demonstration micro-plantations on farmland in

selected villages.

4-18

2.1.3 Prepare training modules and training manuals for

training of trainers and extension staff as well as for

training farmer groups in farm management, utilization

of inputs and agro-machinery. Translate in local

languages

9-12

2.1.4 Using the manuals and trainers above, conduct on site

(at the model micro plantations) community based

training on small –medium scale oil palm plantation

management, utilization of inputs and use of agro-

machinery in selected rural areas Cameroon and

Nigeria.

12-48

2.1.5 At the same time, assess the availability, affordability

and use of agro-machinery in selected farms and

identify appropriate equipment for each region. Also

identify and make recommendations on equipment and

training needs for selected potential farm equipment

fabricators in each country

1-4 UNIDO/

AGR

2.1.6 Based on the recommendations (of activity 1.4.2),

develop a strategy to increase production and to

standardize affordable agro-tools and machinery in the

target countries. Procure and install essential tools for

selected artisanal equipment fabricators

4-12

2.1.7 Provide technical assistance to improve the quality and

quantity of artisanal equipment fabricated, costing and

marketing and in the standardization of other farm

equipments. Demonstrate the use of equipment in the

model farms established above. Link farmers to the

fabricators

12-24

30

Output 2.2 Staff of research and support institutions are disseminating and promoting

new agro practices and palm oil and waste minimization processing

technologies to farmers and processors

Activity Description Months Responsible

Party

2.2.1 In each country, assess the capacity of the existing

research and technology development institutes to

carry out applied research to enhance palm oil

productivity (yields, disease resistance, disease control

farm management skills, etc). Identify 2 institutes (1

in each country) capable of undertaking extensive oil

palm research

1-4

UNIDO

AGR

2.2.2 Identify and recommend essential equipment and

training gaps in the selected institutes

2.2.3 Based on recommendations, procure, install and

calibrate equipment

4-12

2.2.4 Organize a study tour for selected staff of the palm oil

research institutions to Malaysia to further enhance

their core research skills

8-18

2.2.5 Provide technical assistance to develop, adopt,

propagate and disseminate higher yielding/ disease

resistant etc. varieties for dissemination in the medium

term. (With good quality planting materials and

agronomic practices, oil palm begins producing the

oil bearing fruit bunches as early as two and a half

years after planting).

18-48

Output 2.3 Policies conducive to the development of the oil palm sector are reviewed

and submitted to Govt for enactment

Activity Description Months Responsible

Party

2.3.1 -Review the oil palm and other relevant laws and

regulations in each country in respect to (a) land

tenure, (b) investment in the agro-sector (c) trade in

palm oil and palm oil products, etc.

1-4 UNIDO

PSD

ITP

2.3.2. Based on the findings, develop and propose policies

that would promote investment in the oil palm sector

(land ownership, investment and marketing).

4-8

2.3.3. Conduct 2 national policy workshops (one in each

country) to discuss the proposals.

8-12

2.3.4 Conduct (1) regional policy workshop to validate

recommendations made at the national level.

12-15

31

2.3.5 Based on the recommendations, develop a long-term

regional (policy) strategy document for the

development of the oil palm sector to be implemented

by the respective govts

15-18

2.3.6 Provide technical support to the governments in

implementing the recommendations

18-48

COMP 3: Increasing Market Access

Objective To improve the quality and safety of palm oil products processed as well as

the supply capacity of small -scale processors.

Output 3.1 Processors and traders in selected communities are producing and

marketing products meeting regional and international food safety and

quality assurance regulations

Activity Description Months Responsible

Party

3.1.1 Review the national and regional standards and

regulations on palm oil products. Identify gaps with

international requirements and make recommendations

1-4 UNIDO

AGR

TCB

3.1.2 Provide technical assistance in the development of

palm oil regulations and standards

4-18

3.1.3 Assess gaps in food safety and quality between small-

scale processors and the national or international

standards. Identify and recommend upgrading needs in

terms of small enterprise level analytical tools and

training.

1-4 AGR

3.1.4 Based on the technical assessment, procure and install

and calibrate equipment for palm oil analysis

4-12

3.1.5 Based on the training needs develop training modules

and manuals on food safety, quality assurance and

traceability. Translate material developed into French.

8-15

3.1.6 Identify and train trainers who will train the small,

medium and micro oil palm processors in product

quality management, HACCP implementation

12-15

3.1.7 Using the trainers trained above implement training

programmes and GMP, HACCP and ISO 22000

implementation programmes for small scale palm oil

processors.

15-48

3.1.8 Assist the processors in the pilots identified above in

the use of appropriate packaging and labeling of palm

oil and palm oil products for improved market access

15-48

32

Output 3.2 Farmers and processors are marketing their products and purchasing

inputs in clusters

Activity Description Months Responsible

Party

3.2.1 Taking in consideration social /cultural aspects of the

selected communities in each country devise and

propose a mechanism for clustering of small scale oil

palm producers and processors

1-4 UNIDO

PSD

3.2.2 Based on the above develop guidelines for cluster

development, management and dispute settlements

4-8

3.2.3 Conduct a workshop to validate proposal 8-10

3.2.4 Provide technical assistance to register and to process

binding contracts to groups of farmers and processors

willing to cluster. Register clusters established

10-36

3.2.5 Provide technical assistance to link farmer clusters to

processing clusters and processing clusters to market

(large scale palm oil refineries). Also link both clusters

to input suppliers as well as micro credit schemes in

the same region

12-36

3.2.6 To enhance the capacity for self- upgrading and new

investment in palm oil processing to capable trainees,

create linkages between processors and micro credit

financiers by facilitating 2 workshops between micro-

credit financiers and entrepreneurs in each country.

12-36

3.2.7 To ensure consistency in quality and safety of products

from specific clusters, prepare and implement a

training programme for the palm oil processing on

product safety and quality for clusters. Training should

include self product quality and safety audits

12-48 AGR

12. Beneficiaries and Benefits 12.1. The poorest strata of the population in rural areas –Small-scale producers

These are in the foreground of the project and the low absorption capacity and the lack of

monetary assets for investment to increase or rehabilitate acreage and palm oil production

systems have been considered during project development and are reflected in activities like

the policies on land tenure, subcontracting, clustering and the transfer of appropriate and low

cost technology and skills upgrading,

12.2. Small and medium sized enterprises involved in the commodity production,

processing and trade in palm oil

The second group of beneficiaries consists of small-scale palm oil processors operating

inefficiently, with limited market access or ability to effectively participate in palm oil

domestic and national supply chains, a consequence of high product price and quality. These

33

will benefit primarily from technology and skills transfer as well as from linkages vertical and

horizontal that the project proposes to establish. 2 Community based and commercially

operating enterprises will be selected in Nigeria and four in Cameroon for upgrading. The

project will improve on existing technologies and provide skills training (technical) for

operators and business skills for the management staff. The units will be used as technology

transfer center once fully operational. The project proposes to train up to 350 potential

entrepreneurs in each of country. Furthermore the trainees will be linked to credit financing

mechanism to ensure that at least 70% of those trained apply their skills

It has to be realized that the project has to limit itself on pilot activities in selected

communities in the target countries. The selection of community based palm oil processing

operations in each country will play a crucial role for the success or failure of the project and

has to be undertaken with care at the outset of the project. The selection of beneficiary

operations will be based on a criteria such as the one provided below:

Existing initiatives on palm oil processing

Access to ffb

Existing infrastructure for market access (transport, middlemen, local market places)

Income level, land ownership

Alternative livelihoods

Level of village organization and traditional village structures (existing farmer/producer

groups, female participation, joint marketing activities)

Existing extension structure provided by the Government (Ministry of Agriculture)

Willingness of the local government to provide land for pilot plantations

Detailed success indicators to measure the impact of the project will be determined during the

project implementation. It is expected that around 50 families per village can benefit from the

establishment of the commercially operable production units (50 x 6 pilots) = 300 families) –

at an average of six family members approximately 1800 direct beneficiaries in total. It is

expected that an additional 10,000 per country will directly benefit from the training that will

be conducted during the 4 year lifespan of the project. Overall more than 1 million people are

expected to benefit from improved incomes along the value chain. It is also estimated that the

project will create 1000 direct employment (jobs) per country in the farms, and processing and

in trade. More will be employed from spin off activities. During project implementation it

will be emphasized that 30-50% women are integrated in to the project.

12.3. Other Beneficiaries

Large scale and medium scale palm oil processors especially those with refinery capacity will

benefit from increased supply of crude palm oil as well as ffb. Other operators along the

palm oil value chain including animal feed processors from increased demand for services and

products.

All collaborating/implementing agencies involved will be beneficiaries as their capacity for

technology transfer related to palm oil will be improved. As the CI’s are closely linked with

the line ministries and various activities are targeting policy makers, it is expected that palm

oil as a commodity will impact on the overall economic development of the target countries.

34

13. Sustainability

In order to assure the sustainability of the activities beyond the actual project duration, the

project has been designed under the following considerations:

Utilization of existing institutions and organizations

The institutions will be strengthened by means of capacity building to function as long-term

multipliers of palm oil related technology. As all CI’s receive their operational budget from

the respective government; the project will mainly upgrade the technical equipment available

and the capacity of the existing training/research staff to ensure enhanced performance of the

CI’s. The transfer of palm oil technology is already part of the CI’s long-term mandates.

Private sector involvement

The project will strongly involve the private sector, ranging from the rural oil palm growers to

Civil Society Organizations like producer associations. Foreseen at each national level is the

formation of a private sector led palm oil body whose mandate amongst others will include;

provision of representation for the industry at both domestic and international levels, lobbying

special interest and needs of the industry, providing long strategic thinking and direction,

shaping policies and priorities, supporting national marketing and promotion efforts and to

disseminate industry relevant information to members. In Nigeria such a body already exist

and this project will focus on strengthening its capacities. The possibilities of linking the

national bodies to form a regional body will then be explored. The body is to be financed by

levies agreed upon by the industry and imposed on the industry.

Lean project administration

Extensive project administration bodies not only cause high overhead costs during the project

period but also will usually cause projects to collapse after the funded project period. By

utilizing the existing Field-Office structure of the PEA-organization and the secondment of

National Project Coordinators by the respective governments, costs are kept low.

Duplication/Dissemination of Results: The infrastructure developed during the project

period will be used to disseminate positive outcomes relating to technology transfer and skills

upgrading throughout the WACA region. A regional conference/ workshop would be

organized in the third/fourth year of the project. **Budget is included in the overall

training/workshops estimates.

14. Environmental aspects

End pipe waste management will be incorporated in the technical skills training and will also

be incorporated in the model palm oil demonstration and processing units. In addition,

cleaner production technologies will be promoted in the processing enterprises. Focus will be

laid on by- product utilization with the aim of reducing the overall waste generated. This

would reduce the negative environmental impact that would result from the disposal of

industrial wastes. In addition the project will promote rehabilitation and replanting of existing

oil palm plantations as opposed to clearing of forest for new plantations. As much as possible

high yielding competitive varieties that require minimum use of inputs will be promoted.

35

15. Intellectual property rights

This project is not expected to develop any technologies or processes, which would qualify for

patent applications or similar actions. None of the project activities or outputs is expected to

violate any existing intellectual property rights. It is also clear that any documentary outputs

of the project are considered to be the property of the Fund.

16. Cost and financing

Summary of project cost by component and by year

Summary project Cost by Component

and year (USD) Y1 Y2 Y3 Y4 Total

Component 1 : Technology transfer and

skills development for increased

productivity 534000 546,000 366000 168000 1614000

Component 2. Development capacity for

the sustinable supply of raw materials 230,000 388000 266,000 103,000 987,000

Component 3. Incresing market access 117500 148000 131000 95500 492000

Project Management./shared costs 261,000 191,000 171,000 171,000 794,000

subtotal 1142500 1,273,000 934000 537500 3,887,000

vehicle operating costs 60,000

0verhead costs 357,850

Contigencies 5% 131,190

supervision/evaluation costs 175,000

Project Preparation Facility 45,000

4,656,040

Project costs by Financier Component CFC UNIDO Counterpart Contribution Total

Cost

CAMER

OON

NIGERI

A

PRIVAT

E

SECTOR

Component 1. Technology

transfer and skills

development for increased

productivity

761000 180000 436,500 236,500 1,614,000

Component 2. Developing

capacity for the sustainable

development and supply of

raw materials (FFB)

522700 31500 166,400 96400 170,000 987,000

Component 3. Increasing

Market Access

171375 86625 117000 117000 492,000

Project management costs,

supervision, monitoring and

evaluation, contigencies,

vehicle operating costs and

overhead costs

1,430,965 1875 80,100 50,100 1,563,040

Grand Total 2886040 300000 800,000 500,000 170,000 4,656,040

36

Summary of project cost by Category of Expenditure

Category Total Cost USD

% of total

budget

CFC Contribution (USD)

CFC contribution - % of

total Cost

UNIDO Contribution

UNIDO Contr.

%

Counter-part

Contribution

contr.as %

Private sector contr.

PS contr. as %

I Machinery and Equipment

986,000 21.2% 746,000 75.7% 0 0.0% 240,000 24.3% 0 0.0%

II Civil works 320,000 6.9% 0 0.0% 0 0.0% 320,000 100.0% 0 0.0%

III materials and supplies

280,000 6.0% 180,000 64.3% 0 0.0% 100,000 35.7% 0 0.0%

IV Personnel 806,000 17.4% 336,000 41.6% 0.0% 470,000 58.4% 0 0.0%

V Technical Assistance and Consultancy

585,000 12.6% 322,500 55.1% 262,500 44.9% 0 0.0% 0 0.0%

VI Duty travel 424,000 9.1% 424,000 100.0% 0.0% 0 0.0% 0 0.0%

VII Dissemination and training

486,000 10.4% 270,000 55.6% 30,000 6.2% 16,000 3.3% 170,000 35.0%

Subtotal 3,887,000 86.3% 2,278,500 56.7% 292,500 7.3% 1,146,000 31.8% 170,000 4.2%

VIII operating costs (CFC contribution)

60,000 1.3% 60,000 100.0% 0 0.0% 0 0.0% 0 0.0%

PEA overheads (10%)

357,850 7.6% 227,850 63.7% 0 0.0% 130,000 36.3% 0 0.0%

PEA subtotal 4,304,850 92.5% 2,566,350 59.6% 292,500 6.8% 1,276,000 29.6% 170,000 3.9%

ICB supervision costs

80,000 1.7% 80,000 100.0% 0.0% 0.0% 0.0%

IX Supervision, monitoring and Evaluation

95,000 2.0% 95,000 100.0% 0 0.0% 0 0.0% 0 0.0%

CFC PPF - to be returned to 2nd Account

45,000 1.0% 45,000 100.0% 0.0% 0.0% 0.0%

X Contingencies (%)

131,190 2.8% 99,690 76.0% 7,500 5.7% 24000 18.3% 0 0.0%

Grand Total 4,656,040 2,886,040 62.0% 300,000 6.4% 1,300,000 27.9% 170,000 3.7%

37

17. Project Financial Management

Financial management of the part of the project financed by the CFC shall be in accordance

with the provisions of the CFC Financial Procedures Manual.

Procurement will be in accordance with the Fund's Regulations and Rules for the

Procurement of Goods and Services for items financed by the Fund.

Grant disbursements against the purchase of equipment; materials; consultancy

services; operating expenses costing USD 500 or more will be fully documented.

Other expenses and expenditures will be disbursed against certified statements of

expenditure (SOE). Documentation for withdrawals under SOE need not be forwarded

to the Fund but will be maintained in a central location by the PEA and the

collaborating institutions for inspection during supervision missions and for

authentication by the Auditors. The PEA shall receive disbursements from the grant

for implementation of the Project into a designated bank account as defined in the

Project Agreement. The Fund will make an initial deposit in an aggregate amount,

equivalent to an estimated six months' worth of expenditures eligible for the Fund's

financing, less credit and those expenditures to be disbursed directly, into the PEA's

Project Account. Based on the agreed Work Plan and the allocation of responsibilities,

the PEA may provide funds from the Project Account to PCI’s for the implementation

of their respective parts of the project. The PEA, if it so desires, can request the Fund

to directly transfer the required amount to a designated account of the local

collaborating institution for implementation of its part of the project. The Project

Account will be replenished in accordance with the Fund's procedures for operating a

Project Account.

18. Organization and Management

Organization and coordination of activities

The PEA will allocate international experts who will report to the Project

Manager. He/she will manage specific activities of the Project in direct

cooperation with the UNIDO Field Offices in Nigeria and Cameroon. The

major line ministries involved in the project execution are:

· Ministry of Trade and Industry (Cameroon and Nigeria)

· Ministry of Agriculture and Rural Development (Cameroon and

Nigeria)

· Ministry of Scientific Research and Innovation (Cameroon)

In each participating country a NPSC will be established, composed of the line

ministries as above, the respective PCI’s, as well as representatives of other

public institutions (Chamber of Commerce) and the private sector (minimum

two representatives). In each country the PEA will appoint a National Project

Coordinator who will serve as the Secretary of the NPSC and will report to the

Project Manager. The NPSC’s will supervise the implementation of project

activities within their respective countries and conduct the short-term planning

according to the national project work plan, under the directives received from

the Regional Project Steering Committee (RPSC). No sitting fee shall be

payable to members of NPSC for attending the meetings.

38

The RPSC is composed of the Project Manager, the NPSC’s from Cameroon

and Nigeria, a representative of the SB and a representative of CFC. The

Project Manager will convene meetings of the RPSC once a year; three

meetings are foreseen in Cameroon and 2 in Nigeria.

The Intergovernmental Group on Oil, Oilseeds and Fats will be the

Supervisory Body (SB) of the project.

19. Supervision, Monitoring, Reporting and Evaluation

A progress report on the project activities and outputs will be prepared and submitted

to the SB and CFC every half year. The report for study tour, training course and

seminar activities will be prepared and submitted to the SB and the CFC no later than

3 months after their implementation, or according to the applicable regulations of the

SB and the CFC. The project completion report will be prepared and submitted to the

SB and the CFC no later than 3 months after the completion of the project.

The project steering committee and/or the SB and the CFC may visit the project site

for reviewing and monitoring the project at least once a year. The project may be

subjected to an ex-post evaluation at the discretion of the CFC. The date of the

evaluation shall be agreed upon by the SB, the CFC and the PEA. The PEA shall

assist, on request by the CFC and the SB, in organizing any such evaluation.

Reporting

In each project country, National Coordinators will report to the Project Manager and

will prepare an annual report on technical and financial matters. The Project Manager

will be responsible for producing a comprehensive annual report and will report to the

CFC and the Supervisory Body on behalf of the PEA as further specified in the Project

Agreement.

Supervision

The Intergovernmental Group on Oil, Oilseeds and Fats (FIGOOF) will act as

Supervisory Body for the project. It will review the reports submitted by the PEA and

share with the CFC its opinion regarding the project progress. The PEA will submit

for consideration and approval by the SB and the CFC its Annual Work Plan and

Budget no later than 2 months before the start of the relevant project period.

The PEA will provide Progress Report annually, supplementing it with an Interim

Report for the first 6 months of each reporting period. The mid-term evaluation of the

project will take place at the end of the second year of the project.

The CFC will carry out its own regular monitoring of the project. The project provides

for annual monitoring visits by the CFC and by FIGOOF as the Supervisory Body.

After the completion of the project, an evaluation will be carried out to determine

39

achievements against the project's pre-set objectives, to assess the overall impact and

to derive lessons from the project that may be relevant for other CFC projects.

20. Risks

Cooperation between the PEA, the PCI’s and the host Governments is very important

to achieve the outputs. The PEA shall promptly report to the CFC and SB any

developments that could be expected to influence the delivery of the project results.

Political stability will continue in the region and that elected governments taking

office in the course of project implementation will continue providing support to the

programme. Risks are likely to be encountered in activities whose outcome is heavily

dependant on the presence of a enabling environment at the national level should the

counterparts fail to meet their obligations. The effects of such a risk are likely to be

minimal on the project itself, but may affect the long-term sustainability of the

activities after project completion. A strong involvement of the private sector into the

NPSC shall ensure the long-term “drive” of the project.

While willingness to adopt new technologies and skills is not considered to be a risk,

the lack of capacity to do so may exist amongst the communities. The project will

focus on communities that already traditionally process crude palm oil and will

therefore build on inherent capacity, minimising the risk of lack of uptake.

The technical and managerial capacity of the participating institutions could greatly

affect the project's ability to generate results of sufficient commercial interest. To

mitigate the risk of ineffective technology and low skill applications the PEA has

made provision for acquisition of essential technologies and skills upgrading for

collaborating research and equipment fabricating institutions.

Assurances and Conditions to be included in the Grant and Project Agreements

Prior to the first disbursement, it is recommended that, inter alia, (a) approval of commitment

to provide co-financing and counterpart contributions by the governing bodies of the

participating institutions provided in writing; (b) Project Implementation Agreement be signed

between the PEA and Project Implementation Agencies in each participating country,

detailing specific responsibilities, time schedules and budget; (c) Annual workplan and budget

for the first year be agreed by the SB and the Fund.

40

Annex 1: Project log frame

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

PROJECT GOAL: To promote the

development of a sustainable oil palm sector

for income generation and poverty alleviation

in the WACA region. (Cameroon and Nigeria)

% Increase in incomes earned

by actors along the palm oil

value chain

% increase in number of people

employed along the oil palm

value chain at the end of

project at end of project

National statistics on palm

oil sector performance

Employment stats

Field survey

Continuing political stability

in the region.

Outcome

Oil palm farmers, processors and traders use

recommended practices and technologies for

competitive raw material production, palm oil

processing and by product utilization

Number of oil palm farmers

processing and traders who

have adopted recommended

practices and technologies for

the sustainable development of

the oil palm sector.

-Field survey

-National stats

-Farm records

-Factory data

-Market data

-Field surveys

research laboratory reports

Governments in target

countries provide basic

support in terms of pre-

requisite infrastructure,

policies and extension

services

OUTPUTS:

Output 1. 1 Small –scale processors are able

to use recommended palm oil and palm

kernel oil processing technologies

-Number of small- scale

processors adopting improved

technologies in selected

communities

-Number of processors

demonstrating the capacity to

use recommended

technologies.

-% Increase in yields of crude

palm oil ffb

Factory report

Field survey

Training activities are

implemented as foreseen

41

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

-% Increase in quantity of ffb

processed annually

-% Reduction in unit

processing costs

Activities for output 1.1

-In each country assess and identify pilot palm

oil processing units operated by community

based initiatives with potential for upgrading

(2 in Nigeria and 4 in Cameroon)

-Assess and recommend upgrading needs in

terms of renovations, equipment and training

requirements.

-Enter into an agreement that permits UNIDO

to upgrade processing equipment and thereafter

to use the facilities for technical and business

skills training

Based on renovation recommendations carry

out renovation works on selected units to meet

international guidelines for food processing

facilities.

Provide direct technical assistance in the

operation of the processing units and the

optimization of processes

To ensure sustainability prepare and implement

a training programme on equipment repair and

maintenance.

42

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

Based on the training needs assessment prepare

modules and a training manual in small scale

palm oil processing, business management and

entrepreneurship

Use the training materials prepared to conduct

trainers training in palm oil processing, by

product utilization and waste (end pipe

treatment at the established centers) and in

business management.

Using the trainers trained conduct training in

palm oil and palm kernel processing (business

management business plans, book-keeping,

product costing) for existing and potential

entrepreneurs in selected regions

Provide direct support start up operations for

commercialisation of the units

Output 1.2. Small scale processors are able

to use technologies and skills transferred to

process and utilize by products and waste

from palm oil processing

At the end of the project;

-Number or % of processors

adopting technologies and

practices recommended for by

product utilization and waste

minimization.

-Number or % of processors

demonstrating the capacity to

use recommended technologies

and practices.

- Quantities of by products

utilized in by product

processing or energy

Factory reports

Field survey

43

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

generation

Activities for output 1.2

-In the palm oil processing units established

above, assess potential quantities of by

products that will be generated.

-Assess the quantities of other oil palm

byproducts including the wood or trunk press

cake, kernel shells, empty fruit bunches,

leaves, fibres etc within a radius of 5 Kms.

-Identify by products from palm oil extraction

that have a market potential

-Identify and recommend technology and

training needs for feasible specific by

products/waste processing/utilization

-Based on recommendations determine and

renovate premises to house the by product

processing units

-Based on the recommendations, procure,

install and commission equipment preferably

on same sites as the palm oil processing units.

-Based on the training needs assessment,

prepare and implement a training program for

trainers and then for selected communities on

by product processing (animal feed, palm

wine, energy generation etc)

-To enhance knowledge on by product

utilization Conduct a study tour for selected

44

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

entrepreneurs and extension staff to Malaysia

and Indonesia on palm oil by product

utilization

-Provide direct technical assistance in the start

up operations of the by product processing

units and the optimization of processes and in

the commercialization of the by products in

selected units.

Output 2.1. Staff of research and support

institutions are disseminating and

promoting new agro practices and palm oil

and waste minimization processing

technologies to farmers and processors

-Number or % of staff at

research institutions

demonstrating the capacity to

develop and disseminate

appropriate oil palm

technologies

- Number of training

workshops conducted by staff

of research institutions to

disseminate new and adapted

palm oil production

Institutional reports

Field survey

National stats

R&D institutions provide

required resources to meet

their obligations (infra-

structural/and staff as agreed

at the initiation of project)

Activities for output 2.1

In each country, assess the capacity of the

existing research and technology development

institutes to carry out applied research to

enhance palm oil productivity (yields, disease

resistance, disease control farm management

skills, etc). Identify 2 institutes (1 in each

country) capable of undertaking extensive oil

palm research

45

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

Identify and recommend essential equipment

and training gaps in the selected institutes

Based on recommendations, procure, install

and calibrate equipment

Prepare training modules on palm oil research

and technology acquisition and adaptation for

staff. Translate manuals into French

Using modules prepared above conduct (joint

training) specific training relating to palm oil

production for staff of selected institutions.

Provide the manuals for reference and in-house

training purposes

Organize a study tour for selected staff of the

palm oil research institutions to Malaysia to

further enhance their core research skills

Provide technical assistance to develop, adopt,

propagate and disseminate higher yielding/

disease resistant etc. varieties for dissemination

in the medium term. (With good quality

planting materials and agronomic practices,

oil palm begins producing the oil bearing

fruit bunches as early as two and a half years

after planting).

Output 2.2. Oil palm farmers are planting

new and improved varieties of oil palm and

are able to use recommended agricultural

practices and tools

-Number and %of farmers

demonstrating the capacity to

use recommended farm

practices and tolls% Increase in

yield of ffb/hectare

% Increase in earnings/hectare

-Field surveys

-Farm production records

Farmers report accurate

yields/earnings-(may be

reluctant to report actual

earnings to avoid tax related

commitments)

Micro-credit schemes are

46

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

- number of new small holder

farms planting introduced

varieties

functioning

Activities for output 2.2

Assess the current farm management practices

and quality of planting materials in selected

farms and identify constraints that lead to low

productivity of oil palm plantations at the farm

level. Make recommendations

Based on the findings (of activity 1.4.1.)

establish pilot model demonstration micro-

plantations on farmland in selected villages.

-Prepare training modules and training manuals

for training of trainers and extension staff as

well as for training farmer groups in farm

management, utilization of inputs and agro-

machinery. Translate in local languages

-Using the manuals and trainers above, conduct

on site (at the model micro plantations)

community based training on small –medium

scale oil palm plantation management,

utilization of inputs and use of agro-machinery

in selected rural areas Cameroon and Nigeria.

-At the same time, assess the availability,

affordability and use of agro-machinery in

selected farms and identify appropriate

equipment for each region. Also identify and

make recommendations on equipment and

47

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

training needs for selected potential farm

equipment fabricators in each country

-Based on the recommendations (of activity

1.4.2), develop a strategy to increase

production and to standardize affordable agro-

tools and machinery in the target countries.

Procure and install essential tools for selected

artisanal equipment fabricators

-Provide technical assistance to improve the

quality and quantity of artisanal equipment

fabricated, costing and marketing and in the

standardization of other farm equipments.

Demonstrate the use of equipment in the model

farms established above. Link farmers to the

fabricators

Output 2.3. Policies promoting the

development of the oil palm sector are

reviewed and provided to the govt for

enactment

Oil palm policy paper

presented to govt

Government reports The dialogue with

government on policy issues

relating to land tenure is

successful

Activities for output 2.3

-Review the oil palm and other relevant laws

and regulations in each country in respect to

(a) land tenure, (b) investment in the agro-

sector (c) trade in palm oil and palm oil

products, etc.

Based on the findings, develop and propose

policies that would promote investment in the

oil palm sector (land ownership, investment

48

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

and marketing).

Conduct 3 national policy workshops (one in

each country) to discuss the proposals.

Conduct (1) regional policy workshop to

validate recommendations made at the national

level.

Based on the recommendations, develop a

long-term regional (policy) strategy document

for the development of the oil palm sector to be

implemented by the respective govts

Provide technical support to the governments

in implementing the recommendations

Output 3.1. Farmers and processors are

able to organize themselves into clusters

-Number of clusters established

to produce raw materials and

crude palm oil by end of

project implementation

Number or % of farmers and

processors registered as

members of a cluster

-Number of clusters operating

within the selected

communities

-Cluster registration

certificates

-Cluster operation reports

-Number of MOU and

subcontracts signed

Communities are willing to

address social cultural issues

that have in the past limited

successful subcontracting

and cluster development in

the region.

Micro-credit schemes are

functioning and providing

credits to clusters

Activities for output 3.1.

Taking in consideration social /cultural aspects

of the selected communities in each country

devise and propose a mechanism for clustering

of small scale oil palm producers and

processors

49

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

Based on the above develop guidelines for

cluster development, management and dispute

settlements

Conduct a workshop to validate proposal

Provide technical assistance to register and to

process binding contracts to groups of farmers

and processors willing to cluster. Register

clusters established

Provide technical assistance to link farmer

clusters to processing clusters and processing

clusters to market (large scale palm oil

refineries). Also link both clusters to input

suppliers as well as micro credit schemes in the

same region

To enhance the capacity for self upgrading and

new investment in palm oil processing to

capable trainees, create linkages between

processors and micro credit financiers by

facilitating 3 workshops in each country

between micro-credit financiers and

entrepreneurs

To ensure consistency in quality and safety of

products from specific clusters, prepare and

implement a training programme for the palm

oil processing on product safety and quality for

clusters. Training should include self product

quality and safety audits

Output 3.2. Processors and traders in the

selected communities use recommended

% Reduction in number of

samples from selected

Survey (Reports from

analytical and food product

Edible oil regulations and

standards are established and

50

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

food safety and quality assurance processes.

communities not meeting

specs.

-Number or % of enterprises

that demonstrate the capacity to

implement GMPs,

HACCP/ISO22000 in their

processing environments.

certification laboratories,

Enterprise quality reports,

Market reports)

-Record on the number of

enterprises that have or can

implement GMPs

HACCP/ISO22000

enforced according to the

project recommendations

Activities for output 3.2.

Review the national and regional standards and

regulations on palm oil products. Identify gaps

with international requirements and make

recommendations

Provide technical assistance in the

development of palm oil regulations and

standards

Assess gaps in food safety and quality between

small-scale processors and the national or

international standards. Identify and

recommend upgrading needs in terms of small

enterprise level analytical tools and training.

Based on the technical assessment, procure and

install and calibrate equipment for palm oil

analysis

Based on the training needs develop training

modules and manuals on food safety, quality

51

NARRATIVE SUMMARY OBJECTIVELY

VERIFYABLE

INDICATORS

MEANS OF

VERIFICATION

IMPORTANT

ASSUMPTIONS

assurance and traceability. Translate material

developed into French.

Identify and train trainers who will train the

small, medium and micro oil palm processors

in product quality management, HACCP

implementation

Using the trainers trained above implement

training programmes and GMP, HACCP and

ISO 22000 implementation programmes for

small-scale palm oil processors.

INPUTS:

1) New technology and advanced technical and

entrepreneurial skills for production and

processing

2) Technical support and policy dialogue

stimulation for improved raw material

production and supply

3) Information on credit access, subcontracting

processes, clustering establishment of linkages,

market dynamics

52

Annex 2: Swot Analysis

Nigeria

Nigeria is the third largest grower of oil palm in the world and first in Africa covering

62,000 ha and producing 770,000 tons of palm oil. Nigeria has 2.3 million hectares of wild

growing oil palm, probably, the largest in the world. Small-scale and medium scale farms

contribute 42% and 69% of total output respectively. Palm oil processing in Nigeria is mainly

in small- scale extraction mills that account for 69.4% of total palm oil processed in the

country. Extraction rates in the small scale operations in Nigera are only 12-14%.

Nigeria requested UNIDO’s assistance in improving the productivity of its palm oil sector.

As the largest producer of palm oil in Africa, Nigeria has existing resource base essential in

achieving project objectives and tangible results in the short term of the project

implementation that can be disseminated to the rest of the region. Positive outcome in Nigeria

could serve as an motivation for other producers in Africa to focus on the oil palm sector.

Cameroon

Cameroon is the third largest African producer of Palm oil and the ninth world producer of

palm oil. The palm growers union estimates that 90% of the palm oil is grown on small scale

holders owning about 1-10 hectares, 8-9% is grown by medium scale growers with app 10-

100 hectares with 1-2 % grown on large scale with about 100-200 ha. Total production of

palm oil for year 2005 stood at 190 000 metric tons. 70% is produced by agro-industries while

small,,medium and large scale holders produce 30%. The national average yield is estimated

at 3.5 tonnes fresh fruit bunches per hectare. Typical yields in small holder and village

plantations is 5-6 tonnes per hectare. The large scale plantations have recorded a yield of

between 6-12 tonnes/hectare.

As is the case with Nigeria, Cameroon also requested for UNIDO assistance in improving its

oil palm sector. Mainly French speaking and with strong ties to Central African French

countries, the strategic location of the country is ideal for the dissemination of positive

experiences of project intervention to central African countries like the Democratic republic

of Congo, Central African Republic, Gabon etc. all of whom have the climactic conditions

necessary for the production of palm oil.

Strengths The region has several; advantages when compared with other countries.

Domestic Demand. The presence of a huge domestic market in is likely the regions

strongest point

Nutrient demand is much less in Africa than in SES therefore less fertilizer

requirements.

Climate. The regional climate is excellent for palm oil cultivation. The oil palm is

native to the region.

There is abundant land suitable for the establishment of palm oil plantations in much

of the region.

53

Familiarity with palm oil grove cultivation. As palm oil is native to the region, and the

major source of edible oil in the country, farmers are very familiar with its cultivation

and only need to adopt new and improved technologies that would be introduced.

Presence of Research and Development (R&D) institutions. Nigeria and Cameroon

have a core of well informed and competent palm oil scientists and technologists.

Weaknesses

Agricultural productivity (yields/hectare) in wild and small-holdings due low due to

low use of inputs and poor plantation/grove management capacity

Extraction rate of the small-scale mills is very low due to poor technologies that are

not standardized and lack of technical skills in palm oil processing.

Quality of the oil produced in the small, and micro enterprises is poor

Linkage with market is poor with many processors unable to not only meet the supply

volumes demanded but also the quality standards demanded by the refineries. In rural

areas, most of the oil is sold unrefined (crude palm oil). In urban centers refined palm

oil is marketed

Only 40% of existing palm oil processing capacity is utilized due to fluctuating raw

material supply, lack of working capital and poor enterprise management.

There is low diversification of products from the oil palm. Utilization of by products

at both the farm and the enterprise level is low as is effective waste management

which further compromises potential incomes that are possible from the oil palm.

Opportunities

Government policies, In its effort to promote the utilization of palm oil, the Nigerian

government on its part has banned the importation of vegetable oils. This is expected

to spur increased investment in oil palm sector both in palm oil plantations and at the

enterprise level. Cameroon is targeting to double its palm oil output from 11,000

tonnes/year to 220,000 tonnes by 2010.

Presidential initiative on palm oil. In addition, the government of Nigeria has also

launched a presidential initiative to develop vegetable oils sector named as Vegetable

Oil Development Project (VODEP), with palm oil as the priority vegetable oil

commodity. The plan is to develop one million hectares of oil palm to produce

15 million Fresh fruit bunches and consequently to process them to 2.25 million tons

of palm oil.

Regional Markets. Opportunities exist in the regional markets for palm oil as it is

widely consumed in the staple diets.

By-products. Markets for by-products especially the oil cakes and palm kernel seed

oil and wastes create opportunities for more integrated palm oil systems.

Rural Employment. In view of the high transportation costs initial palm oil

processing should occur near production areas creating opportunities for rural

employment and contributing to curb rural urban migration.

Vertical Integration. New organisational arrangements within the food chain (e.g.

clustering system, sales of intermediate crude palm oil to medium & large scale

refineries offer opportunities for smaller farmers/processors to link to growth markets.

Technology Development. Building a strong palm oil processing industry will

stimulate technology development in palm oil technologies.

54

Savings in Foreign Exchange. Import substitution will reduce imports of products

that can be substituted with palm oil

Bio Diesel. New market opportunities in Europe and elsewhere with the growing

demand for bio diesel. The quest for rural electrification in areas producing palm oil

could also be realized as clarified palm oil can be used in gensets.

Threats

The major constraints identified as affecting the production of palm oil in the region are:

Land Tenure. Insecure land tenure may hamper the development of large-scale

plantations. Furthermore the acquisition of farmland is affected by the land tenure

system that results in the fragmentation of farms and makes large and medium-size

land very difficult to obtain for farming.

Non-Mechanization of production, harvesting, processing and preservation. Farm

mechanization and industrial processing are not common in oil palm production.

Except for the scanty use of hired tractors, traditional and archaic farm implements are

normally employed. Use of poor untested technologies result in low quality end-

products.

Low yields at the farm level. The present productivity of Nigerian oil palm

production and yield is not high enough to compete with yields in Asian competitors.

Current yield /hectare of 2.5 tonnes/hectare/year in Nigeria and Cameroon compared

to 4-6 tonnes /year of palm oil /hectare in SES.

Poor infrastructure. The generally poor state of infra-structural facilities in the two

target countries and in rural areas in particular, adversely affects the palm oil

processing industry. The high transportation costs are incurred for the transport of

palm fruit bunches from the farm to the processing factories. Supply of utilities in

rural areas also limits investment in palm oil processing.

High raw material cost. The costs of fresh palm fruit bunches is not competitive –that

is it is higher in the region than in competing countries.

High inputs costs. The costs of fertilizers and other inputs are relatively high- among

others because of the high transport costs.

High energy cost. Public utilities such as energy provision cannot be relied upon.

Plants have to arrange for their own energy supply. This implies additional costs.

Lack of social capital. Relationships in societies in Nigerian and Cameroon tend to

lack in trust. Relations are subject to short-term perspectives and often not conducive

to building lasting business relationships.

Smuggling. Building a strong industrial palm oil sector requires at least a temporary

set of tariffs on competing products. Such tariffs are only effective if smuggling will

be prevented.

Globalization of the international market. Nigeria palm oil will face competition

through the increased imports of palm oil and edible oil once the ban on vegetable oil

importation ban is lifted.

HIV/AIDS. While HIV/AIDS is not yet a major problem in the country, the threat for

the immediate future is large and is likely to affect the availability of labor.

55

Annex 3: Budget by Output

Table 4: Detailed List of Inputs by Category of Expenditure

Total incl. Source of Comp

Category of expenditureUnit Conting. Funding

PY1 PY2 PY3 PY4 USD PY1 PY2 PY3 PY4 % Amount

Office Equipment Cameroon lumpsum 10,000 10,000 5 500 10,500 CFC 1,2,3

Offices Cameroon lumpsum 8,000 8,000 8,000 8,000 32,000 - 32,000 CFC 1,2,3

Office Equipment Nigeria lumpsum 10,000 10,000 5 500 10,500 CFC 1,2,3

Offices Nigeria lumpsum 6,000 6,000 6,000 6,000 24,000 - 24,000 CFC 1,2,3

Vehicle Car/Motorcycle Cameroon no 1 35,000 35,000 35,000 5 1,750 36,750 CFC 1,2,3

Vehicle Car/Motorcycle Nigeria no 1 35,000 35,000 35,000 5 1,750 36,750 CFC 1,2,3

Palm oil processing equipment Cameroon no 1 50,000 75,000 75,000 50,000 200,000 5 10,000 210,0002CAM/2CFC 1

Palm oil processing equipment –Nigeria no 50,000 50,000 25,000 25,000 100,000 5 5,000 105,000 CFC 1

By product processing equip-Cameroon no 50,000 75,000 75,000 50,000 200,000 5 10,000 210,0002CAM/2CFC 1

By product processing equipment -Nigeria no 50,000 50,000 25,000 25,000 100,000 5 5,000 105,000 CFC 1

Equipment for research institutions-Cam no 50,000 15,000 35,000 50,000 5 2,500 52,500 CFC 2

Equipment for research inst-Nig no 50,000 15,000 35,000 50,000 5 2,500 52,500 CFC 2

Equipment for agro-machinery workshops-Cameroon no 25,000 15,000 25,000 10,000 50,000 5 2,500 52,500 CFC 2

Equipment for agro machinery workshop-Nig no 25,000 15,000 25,000 10,000 50,000 5 2,500 52,500 CFC 2

Equipment –food safety-Nigeria no 20,000 10,000 5,000 5,000 20,000 5 1,000 21,000 NIG 3

Equipment Food safety -Cam no 20,000 10,000 5,000 5,000 20,000 5 1,000 21,000 CAM 3

Sub-Total I 309,000 369,000 219,000 89,000 986,000 46,500 1,032,500

Renovations of palm oil processing units units-Cam no 33,000 100,000 100,000 5 5,000 105,000 CAM 1

Renovations Palm oil processing units-Nig. no 33,000 100,000 100,000 5 5,000 105,000 NIG 1

Renovations By product palm oil processing -Cam 20,000 40,000 10,000 10,000 60,000 5 3,000 63,000 CAM 1

Renovations by product palm oil processing -NIG 20,000 40,000 15,000 5,000 60,000 5 3,000 63,000 NIG 2

Sub-Total II 106,000 200,000 80,000 25,000 15,000 320,000 16,000 336,000

II Civil Works

Total

Base cost

Contingency

5%

I Machinery and Equipment

Quantity Unit Cost Costs US-$

56

Films, Stationary, Copies, Printing cost, Training Materials,

Cartridges CAM 10,000 10,000 10,000 10,000 40,000 5 2,000 42,000 CFC 1,2,3

Films, Stationary, Copies, Printing cost, Training Materials,

Cartridges NIG 10,000 10,000 10,000 10,000 40,000 5 2,000 42,000 CFC 1,2,3

seedlings /fertilizers/land clearingetc NIG 5,000 30,000 10,000 5,000 50,000 5 2,500 52,500 CFC 1,2,3

Seedlings /fertilizers/land clearing/distributionetc. CAM 10,000 80,000 40,000 20,000 150,000 5 7,500 157,5002CAM/2CFC 2

Sub-Total III 35,000 130,000 70,000 45,000 280,000 14,000 294,000

NPC- and palm oil processing expert w/m 12 12 12 12 2,000 24,000 24,000 24,000 24,000 96,000 96,000 CFC 1,2,3

NPC-and palm oil processing exp w/m 12 12 12 12 2,000 24,000 24,000 24,000 24,000 96,000 96,000 CFC 1,2,3

Driver, secretary and accountant -Cam w/m 12 12 12 12 1,500 18,000 18,000 18,000 18,000 72,000 72,000 CFC 1,2,3

Driver, secretary and accountant-NIG w/m 12 12 12 12 1,500 18,000 18,000 18,000 18,000 72,000 72,000 CFC 1,2,3

LC-By products utilization-NIG w/m 5 10 10 2,000 10,000 20,000 20,000 50,000 50,000 NIG 2

LC-By product utilization-CAM w/m 4 9 9 2,000 8,000 18,000 18,000 44,000 44,000 CAM 2

LC Structural Engineer-CAM w/m 3 2,000 6,000 6,000 6,000 CAM 1,2

LC Structural Engineer-Nig w/m 3 2,000 6,000 6,000 6,000 NIG 3

LC Agro machinery specialist-CAM w/m 5 5 3 2,000 10,000 10,000 6,000 26,000 26,000 CAM 3

LC Agro machinery specialist NIG w/m 5 5 32,000 10,000 10,000 6,000 26,000 26,000 NIG 2

LC Food safety-Cam w/m 3 5 3 2,000 6,000 10,000 6,000 22,000 22,000 CAM 2

LC Food safety -NIG w/m 3 5 3 2,000 6,000 10,000 6,000 22,000 22,000 NIG 2

LC Palm oil production-CAM-FARM w/m 3 8 8 3 2,000 6,000 16,000 16,000 6,000 44,000 44,000 CAM 2

LC Palm oil production-NIG-FARM w/m 5 10 10 5 2,000 10,000 20,000 20,000 10,000 60,000 60,000 NIG 2

LC Palm oil research-CAM w/m 2 2,000 4,000 4,000 4,000 CAM 2

LC Palm oil research NIG w/m 2 2,000 4,000 4,000 4,000 NIG 2

LC Edible standards and regulations-CAM w/m 2 2,000 4,000 4,000 4,000 CAM 2

LC Edible oil standards and regulations -NIG w/m 2 2,000 4,000 4,000 4,000 NIG 3

LC Entrepreneurship and business development -CAM w/m 5 6 6 6 2,000 10,000 12,000 12,000 12,000 46,000 46,000 CAM 3

LC Entrepreneurship and business development _NIG w/m 6 6 6 6 2000 12,000 12,000 12,000 12,000 48,000 48,000 NIG 3

LC policy Review CAM w/m 6 3 2 2 2,000 12,000 6,000 4,000 4,000 26,000 26,000 NIG 1,23

LC policy dReview NIG w/m 5 2 2 2 2,000 10,000 4,000 4000 4000 22,000 22,000 CAM 1,2,3

LC Translator (English-French) w/m 1.5 1.5 2,000 3,000 3,000 6,000 6,000 CA/NIG 1,2,3

Sub-Total IV 210,000 227,000 225,000 144,000 806,000 806,000

III Materials and Supplies

IV Personnel

57

IC Palm oil processing technologies –CAM and NIG w/m 2 2 1 1 30,000 30,000 30,000 15,000 15,000 90,000 5 4,500 94,500 UNIDO 1

IC By products utilization-CAM and NIG w/m 2 2 1 1 15,000 30,000 30,000 15,000 15000 90,000 5 4,500 94,500 UNIDO 2

IC Food safety - CAM and NIG w/m 0.5 2 2 1 15,000 7,500 15,000 15,000 15,000 52,500 5 2,625 55,125 UNIDO 3

IC Edible oils standards and regulations - CAM and NIG w/m 1 1 15,000 15,000 15,000 30,000 5 1,500 31,500 UNIDO 3

IC Agro Machinery expert- CAM and NIG w/m 1 1 1 1 15,000 15,000 15,000 15,000 15,000 60,000 5 3,000 63,000 CFC 1

IC Cluster Development - CAM and NIG w/m 1 1 1 0.5 15,000 15,000 15,000 15,000 7,500 52,500 5 2,625 55,125 CFC 2

IC oil palm plantation manager-Agriculturist- CAM and NIG w/m 2 2 2 1 15,000 30,000 30,000 30,000 15,000 105,000 5 5250 110,250 CFC 2

IC Marketing Specialist - CAM and NIG w/m 1 1 1 15,000 15000 15,000 15,000 45,000 5 2250 47,250 CFC 3

IC palm oil research specialist-CAM and NIG w/m 1 1 1 1 15,000 15000 15000 15000 15000 60,000 5 3000 63,000 CFC 2

Sub-Total V 157500 180,000 135,000 112,500 585,000 29,250 614,250

Local Travel - CAM 20,000 20,000 20,000 20,000 80,000 5 4,000 84,000 CFC 1,2,3

Local travel NIG 20,000 20,000 20,000 20,000 80,000 5 4,000 84,000 1,2,3

International Travel -NIG 20,000 30,000 20,000 20,000 90,000 5 4,500 94,500 CFC 1,2,3

International Travel CAM 20,000 30,000 20,000 20,000 90,000 5 4,500 94,500 CFC 1,2,3

PEA-Mission no 3 3 3 3 7,000 21,000 21,000 21,000 21,000 84,000 5 4,200 88,200 CFC 1,2,3

Sub-Total VI 101,000 121,000 101,000 101,000 424,000 21,200 445,200

VI Duty Travel

V Technical Assistance and Consultancy

58

Technical Training Beneficiaries - Palm oil processing CAM lumpsum 20,000 15,000 5,000 40,000 5 2,000 42,000 CFC 1

Technical Training Beneficiaries Palm oil processing-NIGlumpsum 20,000 15,000 5,000 40,000 5 2000 42,000 CFC 1

Workshop/Seminar Stakeholders-Palm oil sector-CAM lumpsum 20,000 20,000 5 1,000 21,000 CFC 1,2,3

Workshop/Seminar Stakeholders –Palm oil sector -NIG lumpsum 20,000 20,000 5 1,000 21,000 CFC 1,2,3

Technical Training Beneficiaries By product utilization CAM lumpsum 10,000 15000 10,000 35,000 5 1,720 36,720 CFC 1

Technical Training Beneficiaries By product utilization -NIG lumpsum 10000 15,000 10,000 35,000 5 1,720 36,720 CFC 1

Technical training farm Management-CAM lumpsum 20,000 20,000 10,000 10,000 60,000 5 3,000 63,000 P.S 2

Technical training Farm management _NIG lumpsum 20,000 20,000 10,000 10,000 60,000 5 3,000 63,000 P.S 2

Technical Training Beneficiaries Agro machinery- CAM lumpsum 10,000 10,000 5,000 25,000 5 1,250 26,250 P.S 2

Technical Training Beneficiaries Agro machinery -NIG lumpsum 10,000 10,000 5,000 25,000 5 1,250 26,250 P.S 2

Skills upgrading-business management-CAM lumpsum 15,000 10,000 10,000 5,000 40,000 5 2,000 42,000 CFC 3

Skills upgrading Business Upgrading NIG lumpsum 15,000 10,000 10,000 5,000 40,000 5 2,000 42,000 CFC 3

Policy workshop-CAM lumpsum 8,000 8,000 5 400 8,400 CAM 1,2,3

Policy workshop-NIGlumpsum 8,000 8,000 5 400 8,400 NIG 1,2,3

Policy workshop-Regionallumpsum 30,000 30,000 5 1,500 31,500 UNIDO 1,2,3

Sub-Total VII 70000 180,000 166,000 70,000 486,000 24,240 510,240

Total I-VII excl. Contingenicies 1,082,500 1,287,000 941,000 576,500 3,887,000 151,190 4,038,190

Contribution to operating costs for vehicles and offices15,000 15,000 15,000 15,000 60,000

PEA Overheads (10% of CFC contribution, from Table 11)56,400 93,900 38,900 38,650 227,850

PEA Overheads (10% of counterpart contribution)30,000 40,000 30,000 30,000 130,000

Sub-Total VIII101,400 148,900 83,900 83,650 417,850

1,082,500 1,287,000 941,000 576,500 3,887,000Total -I-VIII Exc. Contingencies 1,183,900 1,435,900 1,024,900 660,150 4,304,850

IX Supervision, Monitoring, Evaluation

ICB supervision costs 20,000 20,000 20,000 20,000 80,000

CFC Monitoring costs 95,000

PPF-to be returned to 2nd account 45,000

X Contingencies (5%) 131,190

GRAND TOTAL 4,656,040

VIII Operating Costs

VII Dissemination and Training

59

Annex 4 – Detailed Workplan

output1.1 Description 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

1.1.1

1.1.2

1.1.3

1.1.4

1.1.5

1.1.6

1.1.7

1.1.8

1.1.9

Output 1.2

1.2.1

1.2.2

1.2.3

1.2.4

1.2.5

1.2.6

Y3 Y4Component 1 Y1 Y2

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Output 2.1

2.1.1

2.1.2

2.1.3

2.1.4

2.1.5

2.1.6

Output 2.2

2.2.1

2.2.2

2.2.3

2.2.4

2.2.5

2.2.6Output 2.3

2.3.1

2.3.2

2.3.3

2.3.4

2.3.5

2.3.6

Component 2

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Output 3.1

3.1.1

3.1.2

3.1.3

3.1.4

3.1.5

3.1.6

Output 3.2

3.2.1

3.2.2

3.2.3

3.2.4

3.2.5

3.2.6

3.2.7

Component 3

62

Annex 5: Institutions selected to participate in project activities

Cameroon

The Institute of Agricultural Research for Development (IRAD)

P.O.Box 2123

Yaoundé, Cameroon

IRAD is the main governmental Agricultural Research Institute in Cameroon. Its activities

cover 5 domains namely: Annual crops, Perennial crops, Forest and Environment, Animal and

Fisheries and Farming Systems.

In order to boost the oil palm sector through improved seed production, the Cameroonian

authorities decided to raise the Specialized Research Station on Oil Palm Tree of IRAD in

Debamba to a centre – the Specialized Regional and International Research Centre on Oil

Palm Tree (CEREPAH) by decision N° 42/IRAD/PCA/02/0005 of 21 February 2005.

CEREPAH is responsible for designing and implementing research strategy on oil palm tree

and translating request for development into coherent scientific projects in particular by:

Selecting and improving high yield oil palm tree varieties, resistant to disease and

tolerant to fusarone.

Improving farming systems associated with palm tree by agro-industrialists and small-

scale growers;

Developing methods to fight against major oil palm diseases

Producing and supplying producers with seeds (germinated seeds, plants and

seedlings) in adequate quantity and quality. This implies that its mission involves

specifically three areas: research, commercialization .

Current Research on the Oil Palm tree include the selection and genetic improvement of

the oil palm. Research activities over the period 2004-2005 include:

Selecting and introducing new high yield parents of the second cycle (output of about

18-22 tons of nuts per ha (year);

Installation of two genetic and genealogical tests of the experimental material of the 3rd

cycle put in the nursery in 2000.

Potential for producing quality seeds

The Centre has a potential to attain 3.9 million seeds, if fertilization conditions are met the

real production capacities could reach 5 million seeds.

Partnership

The genetic improvement programme of the Specialized Regional and International Centre for

Research on Oil Palm Tree(CEREPAH) in Dibamba is integrated into an international

network, coordinated by CIRAD and including the following stations Mé (Côte.d'Ivoire),

Pubè (Bénin), Rio Urbain (Brazil and Aek Kwasan – Aek Loba (Indonesia).

PAMOL PLANTATIONS LIMITED (PPLC)

Lobe, NDIAN Division –

Since 1963, PAMOL Plantations, a government owned enterprise has been key in the

development of the palm oil sector in Cameroon.

63

The research department of PPLC started as a research unit for the multiplication and

propagation of banana seedlings. By 1978, PAMOL established a research department mainly

for the production of chatted nuts and seedlings of high yields. The high quality tenera seeds

produced by PAMOL resulted in a boom of palm oil market in the late 70’s to late 80’s. This

attracted public interest from individuals with large and small scale agricultural enterprises.

The implementation of green revolution in Cameroon, the search for a cash crop apart from

coffee and cocoa whose products can readily be sold in the domestic markets supported the

development of small palm oil holdings.

From 1976 – 2005, the research department has produced for PAMOL, smallholders and

exports more than 97.8 million chatted nuts of D * P crossing and 60.3 million seedlings.

Today, the research department of PAMOL serves the needs for the company and establish

itself a firm consultancy for small holders within and out of Cameroon. There is a high need

to carry out research on 3rd generation seedlings which has a higher yield.

THE NATIONAL CENTRE FOR STUDIES AND EXPERIMENTATION OF

AGRICULTURAL MECHANIZATION (CENEEMA)

CENEEMA is an industrial and commercial public establishment. It was set up in 1974 and

reorganized in 1981. It is endowed with a legal personality and financial autonomy. Initially

CENEEMA was under the supervisory authority of the Ministry of Scientific and Technical

Research but currently it is under the Ministry of Agriculture and Rural Development.

It is responsible for defining and implementing Government policy in the area of agricultural

mechanisation. To that end, it is in charge of:

Studying and adapting machines to the agricultural conditions of Cameroon;

Testing and then approving agricultural machines intended for rural areas;

Training agricultural machine users and farmer leaders;

Elaborating, on request, agricultural project files notably in the area of agricultural

mechanization

Providing services on behalf of third parties;

Ensuring assistance to individual and corporate bodies in the area of agricultural

mechanization

Following a performance contract signed with the State in 1991, these objectives were

reoriented towards productivity and profitability. Hence, its current activities concern mostly

the hiring of tractors, machines and farming tools. It is self-financing.

In addition, CENEEMA currently intervenes in some non profit-making activities such as:

Testing agricultural machines with a view to approving them;

Training users of farming machines and peasant leaders;

Supervising trainees in Schools of Agriculture.

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OIL SEEDS ASSOCIATION OF Nigeria (OSAN)

OSAN was formed in 1994 with the objective of promoting the development of oil seeds in

Nigeria. It has membership of such as farmers, millers, manufacturers, exporters, and research

institutes in the oil seeds sector.

The organization’s activities was to form a formidable representation of oil seeds operators,

act as umbrella organization and act as pressure group in achieving the desired promotion and

development of the industry, collect and disseminate information on the new developments in

the sector, represent the Nigerians association in international and regional forums.

The Organization has published a very informative paper “the white paper on the oilseeds

situation in Nigeria” in collaboration with raw material research and development council.

NIGERIAN INSTITUTE FOR OIL PALM RESEARCH (NIFOR) BENIN CITY, EDO

STATE

NIFOR was established in 1964 to conduct R&D on oil palm, raffia palm, coconut, date palm

and other palms of economic importance and extend the research findings to farmers.

A comprehensive programme on breeding and selection of palms, crop management, product

development and agri-engineering were undertaken at NIFOR. Some of the highlights of

achievements include:

The development of hybrids that are capable of producing fruit yield of 30c/ha.

The development of a wide range of products with industrial potential. These

include crude oil, palm wine, soap and refined vegetable oils. However, there

has been no pilot project set up to evaluate their commercial feasibilities.

The agri-engineering unit has fabricated small-scale end-use equipments

categorized into 3 groups for use in farms of different sizes. These are the

NIFOR large (50-100 hp); NIFOR medium (20-50 hp) and NIFOR Mini

(below 20 hp). The workshop takes orders from farmers, designs and

fabricates the machines for sale to the farmers mainly for palm oil processing.

PROJECTS DEVELOPMENT INSTITUTE (PRODA)

PRODA new mandate focuses on Power Equipment Systems and Accessories. Prior to this,

PRODA was involved in the designing and fabrication of SME food processing machines for

palm oil and palm kernel cracking, steam cookers, digesters and clarifiers. PRODA was also

involved in training in the use of the machines. PRODA had the opportunity to fabricate and

supply palm oil processing machines to rural women’s groups and trained the operators of the

machines.

PRODA has a reservoir of resource persons in the training department who can be called upon

to provide services to entrepreneurs in palm oil processing.

65

RAW MATERIALS RESEARCH AND DEVELOPMENT COUNCIL (RMRDC)

RMRDC is a parastatal of the Federal Ministry of Science and Technology and is an umbrella

organization coordinating efforts by public and private sectors in the research and

development of local raw material utilization.

RMRDC has undertaken many techno-economic surveys of the Food Beverage and Tobacco

(FBT) sector. Specifically, the dominant FBT sector is hampered by high production cost,

smuggling, high cost of imported raw materials and heavy dependence on foreign technology

for production. Locally available raw materials showed increases in prices from one harvest

to the other.

On technology development, RMRDC is interested in upgrading capacity in food processing

technologies (machinery) and equipment, processing, agro waste in the oil palm industry and

post harvest loss reduction technologies. To this end, RMRDC is collaborating with NIFOR.

INDUSTRIAL DEVELOPMENT CENTRE (IDC)

The IDC is an arm of the Federal Ministry of Industry charged with the responsibility of

promoting and developing SMEs in Nigeria. Through the adoption of more efficient

technologies of production, better organization and management methods.

In the area of Food Processing, the IDC (Oshogbo) undertakes feasibility reports, fabrication,

installation, management and technical training of the staff of small and medium scale

production and refining of palm oil, palm kernel oil and edible oil.

IDC (Oshogbo) organizes seminars, workshops and training for organized private sector

members and maintains close links with NIFOR.