In 2009, Malaysian conglomerate Sime Darby signed a concession agreement with the government of Liberia on 220,000 hectares of land, on a 63-year lease, to develop palm oil and rubber plantations in the four counties of Grand Cape Mount, Gbarpolu, Bong and Bomi. The company plans to invest US$3.1 billion over the next 15 years. Sime Darby Plantation Liberia aims to develop 120,000 ha of the land in the first 11 years, and to have the whole area developed by 2030, with the creation of 35,000 jobs.
The first palm oil is expected in 2014, and production levels of 10,800 tonnes are forecast for 2015. The first oil production unit should be built in 2013: 20 such units are planned, one per 15,000 ha, with refineries due to follow in due course.
About 90% of the palm oil produced will be for export.
Sime Darby, one of the world leaders in palm oil, produces 2.4 million tonnes of crude palm oil, with 1 million tonnes of this certified as sustainable. The Liberian project is the group’s third biggest, after its plantations in Malaysia and Indonesia.
Sime Darby’s first venture on African soil is ambitious, and, according to the company, just the start. In February 2011 the president of the group, Mohd Bakke Salleh, announced that 300,000 ha in Cameroon have been identified for development, with planned investment of 6 billion ringgits (nearly US$2 billion) in palm oil plantations. The group hopes to reach an agreement with the government over the next five years.
Europe is a net importer of oil crop products and its energy policy should lead to an increase in imports of palm oil, with European countries are likely to double their consumption of bio-diesel between 2010 and 2020. At an international level, world demand for oil crop products, supplied mainly by the emerging economies China and India, is likely to increase by 30% between 2010 and 2019 according to FAO and OECD agricultural forecasts.
The interest of foreign, and particularly Asian, investors in palm oil production in Africa has become increasingly marked. The first Asian investment was by Singaporean joint venture Naru Investment (Wilmar and Olam) in Côte d’Ivoire in 2007. Wilmar then bought Unilever’s plantations in Ghana and joined with the British PZ Cussons plc to build a palm oil refinery in Nigeria, while Olam invested in Gabon. Golden Agri Resources of Indonesia and the UK’s Equatorial Palm Oil are also present in Liberia. In mid June 2011, the US firm Herakles Farms announced its plans to invest in sustainable palm oil certified by the RSPO (Roundtable on Sustainable Palm Oil).
In the medium term, Africa, having been a major exporter of palm oil in the 1950s and 1960s, is likely to gain ground in palm oil production for local and regional markets and for export. Consumption of oil crop products in Africa is less than half the world average. Palm oil imports in 2009 reached approximately 4 million tonnes.