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  • How does Nigeria support the palm oil industry?
  • To support the local palm oil industry, the Nigerian government has incentivized the cultivation and production of palm oil through tariffs and low-cost loans to farmers. We derived the fair value of Okomu and Presco using a blend of relative valuation and discounted cash flow valuation.
  • How much palm oil is grown in Nigeria?
  • Palm oil cultivation in Nigeria is carried out on over 3.0 million ha of land and is dominated by small-scale farmers (roughly 80% share). Presco and Okomu are among the largest Nigerian palm oil producers in the organized private sector, though they make up only a small share (<2%) of the total area under oil palm cultivation in Nigeria.
  • Why is palm oil so expensive in Nigeria?
  • Despite Nigeria being the fifth-largest producer of palm oil in the world, it remains a net importer of vegetable fat. Given that palm oil is widely used in cooking and manufacturing consumer food products in Nigeria, high prices have stoked consumer inflation and pushed the government to encourage local producers to meet the supply gap.
  • Which Nigerian palm oil company places the highest value on quality?
  • A leading illustration of a Nigerian palm oil company that places the highest value on quality is Steve William Pure Oil Investment Company Ltd. They have carved out a niche for themselves in the market via a dedication to excellence. The business runs contemporary processing facilities and carefully complies with global quality requirements.
  • Are Nigerian palm oil companies trading at a discount?
  • Based on one-year forward EV/EBITDA valuation, our sample of Nigerian palm oil companies (trading at an average forward EV/EBITDA of 6.3x) were trading at a discount to their Malaysian of 9.6x and at a premium to their Indonesian peers of 4.7x.
  • How did the discovery of crude oil affect palm oil production & exports?
  • Domestically, the discovery of crude oil shifted the focus from palm oil production and exports. Palm oil cultivation in Nigeria is carried out on over 3.0 million ha of land and is dominated by small-scale farmers (roughly 80% share).