Global palm oil planter to invest $1.6bn in Sierra Leone deal By KEMO CHAM in Freetown | Friday, June 21 2013 at 14:24
Major palm oil grower Golden Veroleum plans to invest up to $1.6 billion in Sierra Leone in what promises to be the second largest investment in the industry here.
The subsidiary of the US-based Verdant Fund LP, which is controlled by the Singapore-listed palm oil giant Golden Agri-Resources, is eying over half a million hectares of land eventually. But Golden Veroleum director David Rothschild said in Freetown they will start with 20,000 hectares.
“We are negotiating a 50-60 years lease agreement with the government and locals in the South and Eastern Regions, especially Kenema and Pujehun districts," he was quoted saying in a statement released by the Sierra Leone Investment and Export Promotion Agency (SLIEPA) on Thursday.
"Our initial investment will focus on building the required Infrastructure on the land for the construction of an oil mill at the company site,” he said.
Increasing demand for biofuels has made palm oil production a lucrative venture. The commodity is also a popular vegetable oil used in the manufacture of margarine and soap, among other products.
Annual production around the world are said to be worth about $20 billion.
Golden Agri-Resources is the world's second-largest palm oil plantation company. Through Golden Veroleum, it controls the largest palm oil operations in Liberia where in 2010 it promised to invest $1.6 billion to develop over 220,000 hectares of plantations.
Sierra Leone and Liberia form a major part of what is called the new frontier for palm oil production in West Africa.
But all has not been cozy for Golden Veroleum which has been involved in controversies in Liberia where it was under pressure earlier this year to review its social and environmental policies after its workers were accused of damaging graves, clearing existing crops and polluting creeks providing drinking water for locals.
In Sierra Leone, its investment would be in the South and Eastern Regions, where controversial land deals have been the norm. Mr Rothschild promised a different approach.
“We would like to establish strong partnerships and relationships with the communities we will be operating with,” he said.
His delegation this week met with President Ernest Bai Koroma and executives of SLIEPA.
At least 40,000 jobs would be created for locals as part of the investment, plus community development support projects, among others.
The company is currently conducting soil testing for the project. Golden Veroleum's interest in Sierra Leone, said SLIEPA's executive director Patrick Caulker, resulted from a 2010 road show in South Africa seeking potential investors.
In 2011, India's Siva Industries and Holdings Ltd announced a $1.2 billion investment into the industry in Sierra Leone.
The Indian investors then said they had plans to increase the stake to $3 billion.
Should the AU embrace Burundi's President Nkurunziza after his third term win?speak out
Read Story: Should the AU embrace Burundi's President Nkurunziza after his third term win?