Liberia: Local Company, MONCO, Takes over Sime Darby
MONROVIA – At long last, the Government of Liberia (GOL) has officially announced that Sime Darby Plantation Liberia (SDPL) and Manco Public Oil Industry (MPOI) are finalizing their terms and conditions for the sale and purchase of the Malaysian oil palm plantation company.
Sime Darby signed a 63-year concession agreement with the Government of Liberia in 2009 to develop 220,000 hectares of land in Grand Cape Mount, Bomi, Gbarpolu and Bong Counties into oil palm and rubber plantations.
In September, the company vowed to sell its land in Liberia by the end of 2019 in keeping with its asset monetization strategy under which sale proceeds will be used to cut borrowings.
The decision, FrontPageAfrica gathered, is going to be a hard hit on the Liberian economy, especially so when the new company taking over may not prepared financially to pump in not less than US$1.2 million monthly as Sime Darby did.
A senior staff at the plantation company who asked for anonymity said, “Sime Darby contributed US$1.2 million every month, whether it is by taxes, income taxes, through purchasing, etc. So, you can see that a lot is going to change after they leave in December.”
The company employed over 1,700 workers in the region. The western region is said to be one of the most impoverished regions in Liberia.
Speaking at the Liberia-United Kingdom Business Forum in London on Thursday, Liberia’s Minister of Information, Lenn Eugene Nagbe, disclosed that MANCO has been instrumental in building its foot in Liberia for the past 50 years which leads it to now become a manufacturer of soaps and detergents of which crude palm oil is one of the key ingredients in its production.
He stated that despite persistent news in the media of companies departing the country, the local grown company, MANCO, will be taking over the operations of SDPL, which under extremely challenging commodity market conditions have decided to exit their upstream operations in Liberia.
“Liberia is a country with a lot of potential to offer entrepreneurs and investors looking for opportunities. Two such companies that have tapped into that potential are Sime Darby Plantation and Mano Palm Oil Industry or MPOI. SDPL and MANCO are finalizing their terms and conditions of the Sales & Purchase Agreement and the Government of Liberia is taking key interest in ensuring the deal will go through for the benefit of the people of Liberia,” Minister Nagbe stated.
He added: “On the ground, daily operations are “business as usual” for employees, communities, vendors and other related stakeholders, with only ownerships are changing hands. SDPL will provide the technical expertise for MANCO and the new management team to run the operations smoothly during the transition period”.
According to him, MANCO has become one of the key buyers of palm oil from Sime Darby Plantation and also lead them to become a trader of CPO to international market – a key component of the palm oil industry value chain.
Minister Nagbe noted that MANCO will have the full support from the Government of Liberia and will continue to enjoy the incentives and benefits provided to SDPL previously and to other businesses and investors in the country, with the aim of encouraging others to also come and invest in Liberia.
“Liberia is full of potential for entrepreneurs and investors looking for opportunities an example of which today is Mano Public Oil Industry or MPOI. The prolonged low price commodity market is a blessing in disguise for downstream players like MANCO,” he indicated.
He recalled that Sime Darby Plantation has been a key component of the palm oil industry in Liberia, providing locals with a source of income over the last few years, but moving forward, MPOI will also be key in developing Liberia’s out-grower Programme.
“Liberia is a country with a lot of potential to offer entrepreneurs and investors looking for opportunities. Two such companies that have tapped into that potential are Sime Darby Plantation and Mano Palm Oil Industry or MPOI. SDPL and MANCO are finalizing their terms and conditions of the Sales & Purchase Agreement and the Government of Liberia is taking key interest in ensuring the deal will go through for the benefit of the people of Liberia”– Lenn Eugene Nagbe, Minister of Information
Out growers’ scheme
Minister Nagbe maintained that the out-growers’ scheme would be introduced by MANCO to help reduce employment stress on government.
“We were also heartened to hear that MPOI will incorporate the Out growers Scheme, a vital component in the sector that has been successful in many third world countries,” he noted.
He pointed out that the good aspect of it all is, community members will take charge of their own local economy; and improve their living standards.
“It makes communities self-sufficient and empowers them. The good news to that is, funding for such program has been secured already and will be implemented in the shortest possible time. It was one of the preconditions set by SDPL to any buyer. We want to commend SDPL for such brilliant move,” Minister Nagbe stated.
Taking over news embraced with ‘heavy heart’
Minister Nagbe admitted that the Liberian government has seen the efforts Sime Darby Plantation put in to boost the country’s palm oil sector.
“It was with a heavy heart that we received news of Sime Darby Plantation’s intention to exit their upstream operations in Liberia due to the extremely challenging commodity market conditions,” he maintained.
He, however, pointed out that government remains extremely pleased that the Malaysian company found another local ‘homegrown buyer, MPOI to take over its operations’.
“I would like to take this opportunity to thank you Sime Darby Plantation who has laid down a good footprint that this new buyer will follow and the government will continue to provide the enabling environment for investment,” Minister Nagbe noted.
According to him, the taking over of SDPL operations by another buyer means a lot for the government and Liberia particular.
Stimulating the economy
The Liberian Information Minister expressed the hope that the taking over of the company will help stimulate the country’s economy.
He indicated that agriculture remains one of the key areas that would boost the country’s economy and create more jobs for Liberia.
“Government sees this take over by another responsible company as the best way in stimulating the economy. The out growers’ scheme program is one vital component in the sector that has proven successful in many third world countries; and Liberia has encouraged local farmers to take advantage of this,” he added.
MOPI and SDPL collaboration
MPOI has built its footprint in Liberia over the past 50 years, making it one of the leading manufacturers of soaps and detergents that contains crude palm oil (CPO).
MPOI has been purchasing crude palm oil from Sime Darby Plantation for several years and has gone on to become a key trader of CPO in the international market – an important component of the palm oil industry value chain.
Minister Nagbe pointed out that MOPI’s decision to take over Sime Darby Plantation’s operations has come as a welcome relief.
“While the low commodity price may be challenging for an upstream business, it is actually good for downstream players like MPOI that use Crude Palm Oil as their manufacturing input,” he furthered.
“The taking over of Sime Darby Plantation’s operations by another buyer means a lot for this country and our Government in particular. It ensures the level of confidence investors have in the Liberian economy,” he further lamented.