sp reacting to to RNS confirming funding available to develop their palm oil concession in Liberia.

Sime Darby eyes palm oil expansion in Africa

By Kevin Brown in Kuala Lumpur

Published: February 27 2011 20:17 | Last updated: February 27 2011 20:17

Sime Darby, the worlds biggest listed palm oil producer, is considering plans for a 300,000 hectare plantation in Cameroon as the industry rushes to expand in Africa in response to rising demand and near-record prices.

Mohd Bakke Salleh, Simes chief executive, said the M$7.5bn ($2.5bn) project was the Malaysian groups best prospect for expanding its 640,000ha land bank after a 220,000ha concession was granted in Liberia last year.

We are actively looking. We have been shown potential areas in Cameroon, and the development formula is to work with the local communities, he said in an interview in Kuala Lumpur.

Mr Bakke stressed that discussions had so far led to nothing conclusive, while the plantation would take many years to develop, with planting beginning at about 5,000ha a year and peaking at no more than 15,000ha.

Long-term demand for palm oil is rising as a result of population growth and changing dietary preferences in Asia, while supply is constrained by limits on plantation development in Malaysia and Indonesia, the two biggest producer nations.

Indonesia, which accounts for almost half the worlds palm oil production, implemented a two-year moratorium on commercial development of forests and peat lands in January as part of an effort to conserve the countrys remaining rainforests.

Mr Bakke said it was essential for Sime to find further land to defend its market leadership in the face of active prospecting in Africa by other big producers such as Singapore-based Wilmar International and Olam International. We cannot just sit back and do nothing, he said, noting that other plantation players were looking at potential projects in Ghana, Ivory Coast and Cameroon.

Simes Liberia deal was part of a wave of proposed development projects by the industry last year, which included a $1.6bn agreement between Liberia and Golden Agri of Indonesia, and a 300,000ha joint venture in Gabon announced by Olam. Equatorial Palm Oil, a UK-listed palm oil developer, has 169,000ha in Liberia.

Palm oil, although down from the 28-month highs reached last year, was trading at about $1,100 a tonne last week. Before a 2008 spike in food prices that pushed the commodity above $1,000 a tonne, palm oil traded at an average price of about $500 a tonne in the preceding two decades.

Plantation groups do not expect significant local opposition to expansion in Africa, where governments are keen to create jobs and increase export revenues. Sime said its Liberian and Cameroon prospects could create 30,000 jobs each.

Sime also stressed that the land involved was agricultural or degraded forest, reflecting the impact of sustained campaigns against the industry by western environmental lobbying groups such as Greenpeace.

sia palm oil groups go back to future in Africa
By Kevin Brown
Published: March 1 2011 22:58 | Last updated: March 1 2011 22:58
Blackguarded by the green movement and devoid of pricing power, the palm oil business has one thing going for it: the sparkling prospects of the liquid gold it extracts from millions of squat green trees.
With demand soaring, the listed Asian plantation groups that dominate the sector are running out of land. And that is pushing them back to the industrys roots literally in a risky competition for space in equatorial Africa. If the gamble pays off, the rewards will be huge. If it doesnt, the planters could lose their shirts.
For the moment, they are in a sweet spot. With crude palm oil trading this week in Kuala Lumpur at about M$3,500 ($1,150) a tonne, the plantation groups are making at least M$2,000 a tonne more than their costs of production.
That is translating into a big surge in profits. Singapore listed Golden Agri-Resources, Indonesias biggest palm oil producer, has just announced a 147 per cent rise in net profit to $1.4bn for 2010, despite being blacklisted last year by Unilever, Nestland Kraft Foods, the consumer products groups, following Greenpeace claims that it destroyed rainforest areas to plant oil palm trees. Golden Agri denies the claims.
Sime Darby, a Malaysian conglomerate that is the worlds biggest listed producer, last week disclosed a 104 per cent increase in second quarter net profit to M$877m, driven mainly by its palm oil operations.
The price of crude palm oil is currently more than double the long term average of about $500 a tonne, and it looks like staying high, for two reasons. The first is strong demand for edible oils, driven by rising exports to India and China, where prosperity is triggering dietary changes that are raising demand for processed foods. Many of these contain palm oil, including pastries, chocolate and ice-cream. No one sees that trend reversing.
The second driver is palm oils use as an energy source. This accounts for less than 10 per cent of production, but the link to crude oil helps to put a floor under palm prices, as does its role as a replacement for other vegetable oils, such as rapeseed, which are in greater demand as fuels.
Ken Arieff Wong, who researches the industry for Nomura in Kuala Lumpur, estimates that consumption rose by 5.2 per cent last year, while production was up 1 per cent. Consumption growth may fall a little this year, says Mr Wong, but all the experience of development points to a sustained long term increase in demand.
Supply, though, is sharply constrained. Malaysia, responsible for about 40 per cent of production, has very little plantable land left, for a mixture of reasons including infrastructure problems and restrictions on land use. Indonesia, which produces more than 45 per cent of global supplies, has plenty of land, but most of it is virgin forest which it has belatedly promised to maintain. A two-year moratorium on development implemented in January will not put an instant stop to planting, but is a clear sign that land is going to be harder to acquire in future.
Most of the big companies have land banks that will keep them going for a few years. Production can also be increased by raising yields: lifting the average annual yield of 4 tonnes of oil per hectare to the 6 tonnes produced by the best trees would make a big difference. Research is being conducted into genetic modifications that enthusiasts say could eventually raise yields to as much as 8 tonnes. But all that is far in the future, and plantations work on 25-year cycles the lifetime of the trees. So if the planters want to expand later, they have to start the process now.
Hence the focus on equatorial Africa, one of the few places in the world outside south-east Asia where the oil palm tree will grow. This is not surprising, since the Asian industry got its start by importing plants from Africa in the 1960s. Now the plant

PAL outperforming its peers , my guess is its because its not based in Asia.

Food price changes Q1 2010 to Q1 2011

Source: World Bank Development Prospects Group

Maize


74%

Wheat


69%

Palm oil


55%

Soybeans


36%

Beef


30%

Rice


-2%

Good intentions but bad PR , he should have stood up and showed the people the envelope and told them what the money was for.http://liberianobserver.com/content/new-oil-palm-company-admits-misstep

9 May 2011

Equatorial Palm Oil Plc

("EPO" or the "Company")



Inauguration of Liberia's first commercial Palm Oil Mill



and



First sales of Crude Palm Oil achieved



Equatorial Palm Oil plc, (AIM: PAL), the AIM listed palm oil development company with operations in Liberia, is pleased to announce the inauguration of Liberia's first palm oil mill (the 'Mill') at its Palm Bay Estate in Grand Bassa County, by the President of Liberia together with the commencement of Crude Palm Oil ('CPO') sales.



Liberia's First Commercial Palm Oil Mill

The US$3 million Mill was inaugurated following eight months of construction and testing, including the processing of oil palm bunches. The plant is currently processing 30 tonnes of fresh oil palm bunches ('FFB') daily sourced from the surrounding 3,500 hectares of existing oil palms rehabilitated by the Company over the past 12 months. An additional 1,200 hectares are being prepared for the 2011 planting of new oil palms currently in the nursery.



Daily production is averaging five tonnes of CPO per day at an extraction rate of 17%. Production is expected to rise as the Mill reaches full capacity in July 2011 with output in the order of 15 tonnes of CPO per day.



First Sales of CPO

First sales of CPO in to the Liberian market occurred during April and a larger sale tender process is to be undertaken during May.



The Mill was inaugurated by the Liberian President, Ellen Johnson Sirleaf, who attended and spoke at the event expressing her appreciation of the work completed and the importance of this project for Liberia. Also in attendance were other national and local government decision makers.



During the visit to Palm Bay, the President also saw the rehabilitated areas, land prepared for new planting, the nursery with over 200,000 young palms and a primary school established and operated by the Company. In the latest of several local charitable and community development projects being undertaken to improve the social well-being of the communities in which it operates, the Company was pleased to present a cheque for US$25,000 towards a new local women's market in the nearby town of Buchanan, which will have over 100 stalls for trading of goods and local produce.



Michael Frayne, Executive Chairman, commented:

"The inauguration of the Mill and commencement of CPO sales are two important milestones for Equatorial Palm Oil as the Company continues with its development plans to become a significant palm oil producer in the West African region. The Mill is a tangible example of the Company's continued investment providing a positive benefit for Liberia as it drives to create additional value for shareholders.



The Company seeks to continue planting and developing additional land areas to reach its planting target of 1,200 hectares in 2011 increasing to higher planting rates in subsequent years."



The Company will provide a further update in its statement of results for the year ended 31 December 2010 expected to be announced at the end of this month.



Enquiries:



Equatorial Palm Oil plc

Michael Frayne, Chairman




+44 (0) 20 7766 7555

Shore Capital & Corporate Ltd.

NOMAD and Joint Broker

Pascal Keane

Edward Mansfield






+44 (0) 20 7408 4090



Mirabaud Securities LLP

Joint Broker

Peter Krens






+44 (0) 20 7484 3510

Pelham Bell Pottinger

Financial / Corporate PR

Charles Vivian






+44 (0) 20 7861 3126



Notes to Editors:

http://www.bbc.co.uk/news/world-africa-13688683

Mentions PAL:

Equatorial Palm Oil
With an ambitious Indian jv partner & shareholder underpinning it financially, EPO has moved fast to rehabilitate an initial 3,500ha and to inaugurate a 30 mt / day mill. Planting of a further 1200 ha within 2011 is reported to be on track.

So good to hear that they are on track for this year. We always knew this would be a slow and steady riser, and Mirabaud reckon it takes 3 years for planted palms to come "online" as it were, so going by their research note we should be at 6,000 mature and planted palms by next year (for a mkt cap of $73.0m based on current mkt cap/hectare), rising to 49,200 hectares of mature palms by 2020 (for a mkt cap of $600m). For reference, our current market cap is about $34m depending on the FX rate.

If our $ mkt cap per hectare were to rise to that of New Britain Palm Oil (and by then we would be a fairly decent sized producer), the market cap would be $1.2bn for a share price of about 6 assuming an FX rate of 1.6 and no new shares issued until then. That's a 35 bagger in 9 years, I could live with that...

Time to top up?!

sorry aldo, but damn fool idea if you ask me - see post 66

Post 66 "unstable and corrupt country (unlike indonesia of course!)" ........... not so corrupt now with new lady President , and a lot of new investment coming into the palm oil industry in west Africa, and its the only company with a up and running processing mill

And TFC has a holding , at the last time he made an appearance.

Watch it aldwickk, you will have Harrycat and cynic saying have you not got anything better to do on a Saturday afternoon then trawl through old posts. Harry will suggest going and doing his garden or walk the dog. I have turned this offer down. lol
you may get the job at 5/hr

Slight upward movement today , at last.

(01 Aug, 2011)
Palm oil gained for the first time in three days, joining a rally in commodities and stocks, after President Barack Obama said Congressional leaders reached an agreement to raise U.S. debt ceiling, avoiding a default.

Sold all my PAL shares , and put most of the proceeds into VGM and NYO

Did you fall out of love with them aldwickk?

anyone still in..?

Can't see no reason why it won't recover , just like the market I don't know when .

A treble negative :-)

Hope you took a fw profits ald.

2012 should be a transforming year for PAL as production ramps up.

lol.