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Oil palm plantation yields profit potential

  Commitment to seed development and oil palm production in the DRC, based on decades of breeding experience and local skills

oilpalm-operations-map-2Commitment to seed development and oil palm production in the DRC, based on decades of breeding experience and local skills

A large-scale commercial farmland and plantation operator in the Democratic Republic of the Congo (DRC), Feronia Inc. uses modern agricultural practices to operate and develop oil palm plantations and additional production of crops such as soybeans and rice. Feronia is presently researching its options in arable markets.

Given the long lead time required to grow oil palm, Feronia's strategy is to acquire established plantations that have fallen into disrepair and return them to productivity while investing in onsite processing facilities. Its acquisition of the plantation formerly owned and run by Unilever PHC in the DRC is particularly significant because if its size and commercial potential. PHC was once the largest plantations company in Africa, and amongst the largest in the world. The challenge that Feronia has taken on is to invest capital, energy and expertise to return this massive operation to its former prominence.

The refurbishment and turnaround of PHC is a truly large-scale project.

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Feronia's management has had to upgrade communications infrastructure, financial systems and accounting procedures, refurbish the existing mill onsite at Yaligimba, negotiate transportation contracts, develop an operational plan, evaluate farming equipment manufacturers, survey the land and test the soil.

But the team is committed. It believes in the immense agricultural potential of the DRC for high-quality produce. The country's climate and soil quality are highly suited to high quality, high volume production. The region has consistent rainfall, and the land is among the highest quality in the world. Futhermore, DRC is blessed with highly skilled and experienced workers. At present, Feronia PHC employs approximately 4,300 people - making it one of the largest private sector employers in Central Africa. More will be recruited over the next five years, as still dormant soil is returned to commercial operation.

Oil production at Yaligimba Plantation was suspended in December 2008, due to the decommissioning of the palm oil mill. Restarting operations at Yaligimba as soon as possible was particularly important to success.

Bill Dry, COO of Feronia's Oil Palm Division, said, "The Yaligimba plantation includes approximately 30 per cent of the mature planted hectares at Feronia's oil palm operation."

 

Barging

Feronia commenced barging operations in February 2011 between Yaligimba and Lokutu, so that it could recommence production. Bill Dry noted, "Opening up barging between the two allows us to significantly increase the capacity utilisation at the Lokutu mill, operating efficiencies and oil production from the operation."

In May 2011 the company sourced and contracted the necessary capacity to barge the plantation's fruit to the Lokutu palm oil mill. With the proceeds from a $15mn financing round in March 2010, it is committed to the construction of a new 60 tonne per hour palm oil at Yaligimba, to be built in two phases - to eliminate barging costs and eventually quadruple total milling capacity.

“We are very enthusiastic about the long-term potential of PHC and the implementation of large-scale mechanised farming in the Democratic Republic of Congo and elsewhere in Sub-Saharan Africa,” said James Siggs, Feronia's CEO.

 

Seeds, control, germination and health

In the DRC, Feronia operates in Equateur and Orientale, on plantation land that has been used constantly since 1911. Its Congolese operation comprises three plantations located either adjacent to the Congo River or in close proximity to it - at Lokutu, Boteka and Yaligimba - covering 107,000 hectares. At present, around 70,000 hectares are suitable for planting palm oil. There are over 2.2mn mature palm trees and more than 300,000 seedlings. The company selects its Pisifera palms from progenies with outstanding yields. Its crossing programme is designed to bring together the best characteristics from a wide range of origins.

Modern, commercial planting material consists of tenera palms or DxP hybrids, which are obtained by crossing thickshelled dura with shell-less pisifera. Although common commercial pre-germinated seed is as thick-shelled as the dura mother tree, the resulting tree will produce thin-shelled tenera fruit.

An alternative to pre-germinated seed, once constraints to mass production are overcome, is tissue-cultured or “clonal” palms which provide “true copies” of high yielding DxP palms.

Crossing the dura and pisifera gives thin-shelled tenera fruit type improved partitioning of dry matter within the fruit, giving a 30 per cent increase in oil yield at the expense of shell, without changing total dry matter production. Feronia selects duras purely on the basis of oil yield and vegetative characters, including reduced height increment and above average bunch index (the ratio of fruit dry weight to total dry matter).

 

Field Trials

The progenies are evaluated in field trials for yield and disease resistance. Only elite pisifera parents are used for commercial seed production.

The Research Station at Yaligimba specialises in the development of the seeds planted for oil palm in sub-Saharan Africa. Its operation is extensive, and comprehensive. Around 50,000 individual palms are subject to a detailed monitoring programme at any one time - a programme that includes the best material from key Democratic Republic of Congo origins including Nigeria, Côte d'Ivoire and Cameroon.

The oil palm seeds produced in the DRC by Feronia are the product of a rigorous programme of parental selection and testing. Dura parents are selected both from DxD crosses and DxT and TxT crosses. As a consequence, Feronia can claim the seeds to be disease resistant; to give early yields for increased profitability; to offer high yields of fresh fruit bunches (FFB), reaching as high as 30 t FFB/ha in ideal conditions; and to demonstrate exceptional bunch characteristics giving high extraction ratios on milling.

The presence of dura in plantings from commercially produced DxP material plantings may follow inadequately controlled pollination. This inevitably leads to lower profits. In stringent DxP surveys, Yaligimba Research Station oil palm seed regularly shows contamination of less than 0.5 per cent dura in palms. Feronia's emphasis on high quality standards throughout production ensures that seeds are healthy - and that customers can obtain 85 per cent germination with dry heat-treated seed, and better.

 

Vascular wilt disease

Vascular wilt disease - caused by Fusarium Oxysporum f.sp.elaeidis - is a major problem in Africa. To combat this disease, selected resistant material such as wilt resistant seed must be planted. In the Feronia programme, screening for resistance is done in the field as well as in the nursery. This means that parent plants that consistently transmit resistance to their offspring can be identified and selected, resulting in seed with superior disease resistance.

Yaligimba's oil palm seeds are cleaned and treated with fungicides and insecticides. Feronia has prioritised the elimination of progenies with susceptibility to diseases such as Cercospora.

In a joint research project with Bath University, Yaligimba Research Station developed a technique which removes all fungi including Fusarium spores, even those between the kernel and shell. The seed is subjected to this special treatment prior to export.


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