DekelOil pressing ahead with its next Ivorian palm oil project
Owner and operator of the Ayenouan palm oil project in Côte d'Ivoire, DekelOil Public, commenced operations at Guitry - its second project in the country - it confirmed on Tuesday.
The AIM-traded firm said that, a with Ayenouan, Guitry was set to be developed into a vertically-integrated palm oil operation including a nursery, company-owned estates and a mill producing crude palm oil from fresh fruit bunches grown by both the company and local smallholders.
“We believe Guitry in time has the potential to become a much larger and more profitable operation than our successful project in Ayenouan,” said executive director Lincoln Moore.
“It has always been our intention to first prove our vertically integrated model at Ayenouan before building a portfolio of other vertically integrated palm oil projects in West Africa.”
At the nursery, DekelOil said equipment had been ordered for a computerised, fully irrigated, palm oil nursery, which will have a capacity of one million plants per year, or 6,000 hectares of oil palm estates equivalent.
It would initially supply local smallholders and a pilot company owned estate, with a size yet to be determined.
For the company-owned estates, DekelOil said it has secured rights to develop over approximately 24,000 hectares of brownfield land, which are primarily old cocoa and oil palm estates.
Water surveys and environmental impact and social assessments have been completed and were supportive of project commencement, the company claimed, adding that they had the potential to “significantly enhance” the local smallholder industry to provide additional feedstock to a company-owned mill.
Certification from the Roundtable on Sustainable Palm Oil (RSPO) would be sought for the estate development.
For its initial mill, DekelOil said it was holding discussions with local smallholders to determine the capacity of an initial crude palm oil mill at the site.
It said that, while the smallholder industry at Guitry was less developed than at Ayenouan, it would undertake a feasibility study for a 15-30t per hour extraction mill.
An application for a corporate tax exemption for the Guitry project would be made on similar terms to the 13 years full corporate tax exemption obtained for the Ayenouan project, DekelOil confirmed.
“Having established a successful operation at Ayenouan which plays an important role in the local economy, our business model is proven and de-risked and with this in mind we are encouraged by the interest and support we are receiving from potential partners and banks with regards to providing development capital for Guitry,” Moore explained.
“I look forward to updating shareholders on our future progress at Guitry as we deliver on our strategy to transform DekelOil into a leading West African focused palm producer.”
Looking at the funding side of the project, the firm said development capital over the next 12 months was not expected to exceed €0.25m.
It said it may fund a portion of Guitry's future development from internal cash flow, but the majority of funding would likely be obtained by introducing a project partner as it did with the Ayenouan project.
While those discussions had commenced, DekelOil said no partner had been selected as yet, and further updates would be made in due course.