A Compelling Investment Opportunity
The Democratic Republic of the Congo
The DRC has the potential to become one of the world’s key producers across a large number of agricultural commodities. It has the climate, water, and scale to accomplish this. Yet it currently imports more than 1 million tonnes of agricultural commodities per annum[Source: www.FAO.org], at major cost to the populace.
The DRC population is also predicted to grow from 70 million to approximately 100 million by 2030 and 150 million by 2050 [Source: www.esa.un.org], with an attendant rise in the import bill.
Currently, the DRC imports a vast amount of palm oil from Asia each year to satisfy domestic demand for a product which is native to the country and part of its people’s staple and traditional diet.
There is an enormous opportunity to displace these expensive imports and transform the country into a net exporter of agricultural products.
In addition, the DRC is repairing and expanding its infrastructure and there is reason for optimism about its economic outlook. The International Monetary Fund estimates that the DRC's economy expanded by 9.2 percent in 2014 and it is expected to grow by 9.2 percent in 2015. This represents one of the highest gross domestic product growth rates in the world and, when coupled with low inflation, suggests the medium-term economic outlook is promising.
- Global palm oil demand is forecast to grow with India and China the largest consumers driving demand.
- Supply-side cannot match demand with increased substitution from other more expensive vegetable oils is required.
- 85%+ of global palm oil is currently supplied by Indonesia and Malaysia with the DRC importing hundreds of thousands of tonnes per annum.
- There are geographic barriers to entry as oil palms can only be effectively grown within 7 degrees of the equator in areas of consistent heavy rainfall.
- Global expansion is limited by deforestation issues.
- A unique palm oil plantations rehabilitation opportunity with a successful operating history
A unique palm oil plantations rehabilitation opportunity with a successful operating history
- Established in 1911 by Unilever plc
- Three separate plantations with 24,500 ha planted, of which 13,600 ha are immature and 10,900 ha are producing
- Directly employs 3,600+ people and creates jobs for thousands more
- Committed to improve the living and working environment of our employees and their communities
- Committed to sustainable agriculture, environmental protection and community inclusion
- Working towards certification by the Roundtable for Sustainable Palm Oil (RSPO) and are implementing IFC/World Bank standards for environmental and social sustainability
- Opportunity to grow with less capital expenditures than competitors and largely financed by cash-flows from existing operations
- Replanting previously abandoned plantations allows for minimal environmental and social impact expansion of palm oil production in the DRC
Proven, experienced world-class management team
- Over 150 years of agricultural business and operational experience globally
- Considerable experience with large agri-businesses in the DRC
- Successful track record of plantation turnarounds across Africa and Asia
Clear path to revenue and EBITDA growth
- Substantial revenue and EBITDA growth potential, possible through minimum CapEx and process improvements
- Significant growth through re-establishment of proper planting and lifecycle management