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“Federal Government can generate Billions of Dollars in revenue from investing heavily in Oil Palm Sector” CPL group boss, Dapo Awofisayo

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Dapo Awofisayo
The dark-skinned youth influencer, Dapo Awofisayo is the Group Executive Director of CPL Group, who graduated from the University of Kent, Canterbury with a B.sc in Economics. Apart from his immense contribution to entertainment and politics, he is also an Agric-businessman of high repute. At a point when most youth are gunning for white collar jobs, he invested his time in Agriculture. Ever since he made that decision, he has never regretted it. His decision is gradually paying off after being listed as a major key player in Nigeria’s Oil palm business sector, with a plantation size of over 4,000 Hectares of Land.
The Surulere, Lagos born entrepreneur in 2008, bagged an Ms.c in Finance and Management from the prestigious Cranfield School of Management. His resume politically, is quite an intimidating one. He is the founder of the popular grassroot political campaign group named; ‘Armoury for BOS’. A political group that spearheaded the 2019 campaign of the incumbent Governor of Lagos State, Babajide Sanwolu.
In this exclusive interview with the Publisher of www.cityspy.com.ng, OLADAPO SOFOWORA, the junior Awofisayo spoke extensively on issues surrounding the retarded growth in the oil palm business. He also proffered possible solutions for the government on how to boost production of oil palm as a possible replacement for crude oil, which would perhaps, generate huge revenue for the country. 
He spoke on why most youth have refused to embrace agriculture, among other salient issues. EXCERPTS.

How did you find yourself in the Oil Palm business?
Oil palm in the past, was Nigeria’s biggest export. As a matter of fact, when the colonial masters did publications to market Nigeria to British citizens for investment, the number one resource highlighted was oil palm. On getting here, one of the things they picked up was our oil palm. We had vast plantations and resources. As far as oil palm is concerned, it was our major export not crude oil. It’s a shame that the tempo was not sustained by past government to get oil palm to the level where Malaysia and Indonesia are today. The two countries now control 90% of the market. Nigeria already had oil palm before these two countries delved into large scale production. As at today, they are controlling 90% of the global oil palm market.

What can the government do to increase Oil Palm Production?
Its basically increasing processing capacity. The CBN governor, Mr Godwin Emefiele, came out openly to push for aggressive expansion of the oil palm industry. He set up a meeting with most of us in the oil palm business last year March, in Abuja. At that meeting, the CBN did some match-making exercise with state Government representatives, who committed thousand of hectares for oil palm plantation. Plantation is not the problem of Oil palm, its production.
First, you assist the existing oil palms companies with access to credit facilities. The oil palm industry is operated like a class system. Like all industries, the oil palm industry is segmented. We have the elite in the industry, the likes of; Okomu, Presco, PZ Wilmar and JB Farms. These are our big boys! We are in the mid level, aspiring to get to elite status. Our plantation is on 4,000 hectares. If they approach a bank for N1Billion loan, they easily access it without stress. These boy’s don’t need loans. They are credit worthy, they can easily attract huge funds from any bank in the country; local and international. What we need is increase in our processing capacities. We don’t need money to run a plant. We already have an existing plantation. What we need money for is to increase processing capacity. We have enough oil palm refineries in Nigeria at the moment, but what the refineries lack is enough crude palm oil of acceptable grade. What the government need to do is increasing the processing capacity not plantation size.
Also, CBN released a N50billion fund, for agriculture, especially for oil palm sector. They route this money through commercial banks. When you route this money through commercial banks, they treat you like every other loan applicant. They set strict conditions for you to access the loan. By the time you go through the strenuous process, you probably don’t see the end of the process. I will never recommend government giving cash to any business. If they want equipment, Government should procure it and lease it out to them. They gradually pay the lease overtime, which covers cost of the asset.

Why do most Youth shy away from Agric Business?
Anytime you step out of your house, you have lots of bills to pay. How much support is the government putting in place to support Agriculture?. The business is not lucrative for young guys. Dapo Awofisayo is 32 years old, I got into the oil palm business through the already existing path laid down for me by my father. The company was already one of our many subsidiaries. I had the choice, but I chose to settle with this. I figured out that, people like me have to make this business look attractive to enable other people come and invest.
Young people have started getting into agriculture, but the rate is still not phenomenal for you to feel the direct impact of youths in agriculture. What I’ll say is that; there should be access to CREDIT. Another problem that comes with agriculture is dealing with local communities, land holders, insecurities in the country among other constrains. There is also the issue of multiple taxation, which plays a role in chasing young people from agriculture. Until the Gov’t sits down and puts together a proper plan, maybe then, youths will rapidly delve into Agric business.

What ways can you advise the government to curb excessive importation?
Access to credit. Every industry in the world is built on accessibility to credit facility. Some drastic steps must be taken, if it requires the government to lose money in the process, they should bear the loss. At the end of the whole process, tremendous achievement will be recorded. They also have to ensure that grass root small scale farmers, get credit to enable proper investment in agriculture. Look at the rice business for example, years ago, rice farmers and small rice mills owners were giving grants by the federal government to increase their production capacity. After that exercise, most of the rice we consume in Nigeria is mostly produced by us. This has reduced rice importation into the country. During Former President Goodluck Jonathan’s administration, they focused more on improving large scale production of Cassava. As we speak, Nigeria is the largest producer of cassava in the world. It takes determination, vision and sincerity of purpose to drive agriculture.

Why did you insist on oil palm business?
Like i said, this was a path laid down by dad which I, Dapo Awofisayo agreed to tow. One of our subsidiaries, CPL Agric, has purchased this company from the federal government. You see, my father is one of the foremost business men in Nigeria. He has interests across several sectors in the country. With his vision for industrialization and boosting local capacity, he set up his company in 1974. Manufacturing all kinds of products, from cosmetics, pharmaceutical drugs, personal and public hygiene products. In the late 70’s to the 80’s, He was the sole licensee in West Africa for Revlon Group Inc, a global cosmetics brand.
As at today, he is the champion of biomedical engineering in Nigeria among other things. When the Oil palm business was acquired, it wasn’t doing well for a while, I guess that was the tethering phase. Shortly after I moved back to Nigeria, I examined the business and decided to be part of its day to day operations. By virtue of the company’s managing director, we turn the fortune of the company around within a short while. All we require from the FG and CBN, is access to cheap credit and reduced barriers to accessing this cheap credit.

What capital strength is required to set up an oil palm business?
Typically oil palm business is not a place for small scale farmers. For a start up plantation, you will be looking at a minimum 500 hectares. Anything smaller than that, the headache won’t be worth while. The first thing that aides production of oil palm is having your land and money as capital. Sincerely speaking, it requires a huge amount of money laced with long patience. That’s why you need the support of the government because Banks are not patient enough with loan scheme. Only the Government has that patience capacity in repayment of loans. It takes 3/4 years for a newly planted seedling to grow to the point where it is commercially viable. So imagine planting a whole new field on 500 hectares.

Why do you think most Nigeria farmers are yet to fully embrace mechanical farming?
It’s simply the running cost. Do you know the cost of a bulldozer? or cost for rental on a daily basis?. There’s literally nothing more to it than cost. Lot of farmers will like to use mechanized farming methods, but the cost of doing that is quite exorbitant.

Advise for local oil palm refiners in maintaining personal hygiene during refining
As a manufacturer of palm oil, there must be accreditation. Processing of palm oil is a very simple thing as long as you have the necessary equipment’s. You can extract oil from the fruit, using a locally fabricated machine or the imported ones. The imported one tends to give better extraction rates and quality. On the issue of hygiene, the process of milling when using a proper mill like we have is hygienic. As majority of the milling process lacks human interaction with the product itself. Some compromise their production process, going through every dubious means to double their financial gains. To uphold hygiene in oil palm production, it’s quite essential to buy from an accredited retailer or wholesaler. With this, quality control can be ensured to avoid diseases during consumption. The government must continue to enlighten consumers on ways to purchase palm oil from credible sources.

People often say there’s nothing like wastage in the Oil palm business, how true is the claim? 
It is true. After extracting the oil from the fruit, you have the nut inside. The nut inside is cracked and used to make Palm kernels oil. A lot of cosmetic companies buy them. Producers of biscuits also buy them. The chaff when dried properly, is used for fire boilers. The waste water from the processing is sold as well. From the fruit bunch itself, you are looking at about 4-5 different products that have commercial value. There’s no wastage in the business.

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Business

Half-Year Performance: Transcorp Plc Shows Powerful Growth as Profit Leaps by 713%

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Transcorp Hotels

Transnational Corporation of Nigeria Plc (Transcorp) has released its unaudited results for the half-year ended June 2021, recording significant improvement across its major income lines.

The Conglomerate with strategic investments in the Power, Hospitality, and Energy sectors, recorded a profit after tax of N6.5bn, rising by 713% up from N0.8bn recorded in June of the previous year. Other key highlights of the result include the following:

  • Revenue rose by 53%, from N35.0bn in June 2020 to N53.3bn in the period under consideration.
  • Gross profit grew by 60%, from N14.7bn in June 2020 to N23.5bn in June 2021.
  • Profit before tax rose by 689% from N0.9bn in June 2020 to N7.1b in June 2021.

Commenting on the performance, Transcorp’s President/Group CEO, Mrs. Owen Omogiafo, reiterated the Conglomerate’s commitment towards producing long-term value and sustainable impact. “We are pleased to see the sustained growth in our group performance, which was achieved as a result of the improved performance across all the sectors we operate in. The revenue achieved in our power business grew by 48%, as a result of improved gas supply and increased generation capacity”, she stated.

Commenting on the hospitality sector, Omogiafo stated that the company’s strategic actions have resulted in a growth in revenue of up to 84%, despite the ongoing impact of the COVID-19 epidemic on the Nigerian and global hospitality industries. She expressed confidence in the company’s recovery strategies, citing the recent official launch of Aura, the company’s digital hospitality platform, as a testament to that confidence.

On the Group’s capacity to sustain its performance, Omogiafo said, “We do not plan to rest on our oars. We will continue to sweat our existing assets and explore new frontiers, as we continue to deliver on our purpose of Improving Lives and Transforming Nigeria.”

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Rethinking safe-haven assets and building resilient portfolios with Xend Finance

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As with most things in life, feeling overwhelmed as a newbie is simple, and this is especially true in such a volatile market as the world of cryptocurrencies. Regardless of the uncertainty and worries, the world of cryptocurrency has the potential to have a unique and substantial impact on anyone’s financial stability.

Government Bonds, treasury bills, and other forms of fixed income investments are undeniably considered as safe haven investments due to their low risk, but with inflation on the increase, the question arises how safe is money locked up for a specific period of time?

It is therefore important to build a resilient portfolio able to minimize risks and mitigate volatility, diversity into multiple unrelated investments, deliver steady returns and also able to recognize changing market conditions, new opportunities and respond accordingly.
Enter the world of Stablecoins. A less volatile cryptocurrency asset pegged to a cryptocurrency, fiat money, or to exchange-traded commodities (such as precious metals or industrial metals).

Compare to other forms of cryptocurrency assets like bitcoin, or altcoins the advantages of stablecoins are stabilized by assets that fluctuate outside of the cryptocurrency space that is prices are pinned to real-world assets.
Most stablecoins are pegged to the US Dollar as they are an easy way to get exposure to the crypto space without having to worry about volatility.

You can build a resilient portfolio with stable coins by having a good foundation on which you can build and protect your investment portfolio. This is necessary to provide a buffer when the markets are volatile or things go south.

These stablecoins also provide diversification as Investor Phillips Hodges mentioned in an interview emphasized the importance of balancing factors affecting the returns you can get across the different than the classes themselves. Stable coins also provide the extra diversification a portfolio needs to stay afloat in a stormy market, minimize losses due to their low volatility.

Be rest assured as an investor that your portfolio can only said to be strong when you have investments that can stand the test of time. Inflations and rickety market conditions.
If you’re a fund manager looking to get exposure to the crypto space through stable coins, send an email to [email protected] and someone would be in touch with you.

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Market formation framework, driver to optimally develop solid mineral sector- Ifie Sekibo 

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Ifie Sekibo

MD/CEO of Heritage Bank Plc, Ifie Sekibo has said that the market formation framework is the key to optimally exploit Nigeria’s precious metal and solid minerals endowments. He disclosed this during a webinar organized by the Securities and Exchange Commission (SEC) in collaboration with the Federal Ministry of Mines and Steel Development with the theme, “Financing the Solid Minerals Sector through the Capital Market and the Critical Role of Commodity Exchanges.”  

Sekibo explained that a fully established market formation process that would lead to having a Corporation as an integrated solid mineral institution like NNPC which allows the collateralization of assets those banks can rely on for alternative funding options.

According to him, this will guarantee other creative ways of raising funds for financing commercial activities relating to solid minerals and viable projects along its value chain.

Sekibo who was represented by the Divisional Head, Strategy and Business Solutions, of the Bank, Olusegun Akanji, said for the sector to be viable, it requires lots of converged government interventions because for any development focused sector to kick-off around the world, it needs government intervention to lay the foundation for the private sector and funders to step-in and pool their resources.

“Once, we can collateralize these assets, whether they are under the ground or being determined, you use different instruments to bring liquidity into them. Then investors will follow up once we have established there is enough they can explore.” the MD stated.

He further suggested that finance sector regulators need to expand their Prudential Guidelines to accommodate the instruments such that precious metal-backed or solid minerals-backed assets could qualify as part of the computation of liquidity ratios.

“Once banks start injecting their resources, customers would certainly follow that trend. You can start arranging for sophisticated solutions like bonds, bullion-backed assets and pension notes. Again, banks will have to be poised to hold the funding that comes from this sector; that way, they can open new transactional frontiers either locally or internationally.

“At the base of this, are the issues of pricing and integrity of the market. Once banks play in that sector and we have a government institution like the NNPC type to hold all this documentation, it would be very easy to establish price discovery on an ongoing basis. This will in turn attract international funders, hedge funds and retail investors. Today, we have retail bonds in the same way; we can have gold-backed or any of the solid mineral assets where retail investors can put in the funds,” Sekibo explained.

Meanwhile, it would be recalled that Heritage Bank Plc has said its involvement in the private sector collaboration with Dukia Gold & Precious Metals Refining Co. Limited is set to unlock the over N344 trillion market worth of gold investible instruments in the solid minerals sector.

However, he reiterated that a consistent packaged framework, which could only be held by an established government institution, as part of the layers of the framework, would help to tackle major challenges in trying to support Dukia Gold’s clients.

“With a consistent packaged framework, it will be easier for Dukia Gold and help in less spending. If Dukia Gold should speak of their challenges, they will speak about tonnes of documents they have to produce. But with a unified source of documentation, it makes the process easier and improves cost management. These are some of the challenges we have experienced in trying to support a few clients we worked with,” Sekibo stated.

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