CHOMBA MUSIKA, Mpika
ACCORDING to the African Business Review, the market for edible oils in Zambia is estimated at 120,000 metric tonnes per annum.
The review further states that as the country’s population and economy grow, the market for edible oils in Zambia is equally expected to expand.
However, it is estimated that about 70 percent of the 120,000 tonnes of edible oils in Zambia is imported as finished products from the Far East and southern Africa.
This represents a domestic shortfall of about 84,000 metric tonnes per annum.
In addition, of the edible oils produced locally, about 80 percent of inputs are imported, while only 20 percent of raw materials are produced locally.
And despite being blessed with vast land and a suitable climate to grow palm oil fruits, the country spends between US$70 million to US$100 million annually on edible oil imports.
The above statistics entail that in the next 10 years, the country will potentially externalise between US$700 million and US$1billion on importation of edible oils.
To reserve this narrative, Government, through the Industrial Development Corporation (IDC), has embarked on an ambitious palm oil production project in Mpika, Muchinga Province.
Last year, IDC acquired a 90 percent stake in Zambeef Products’ subsidiary, Zampalm Limited, at a cost of US$16 million.
The plantation sits on 20,000 hectares of land on which only 3,000 hectares is being utilised to grow palm trees and mill the fruit into crude oil.
IDC, an investment arm of Government, has since committed to double production of crude oil at Zampalm Limited to prevent the externalisation of US$100 million spent on importation of edible oils.
A fortnight ago, IDC board members inspected the palm oil plantation in Senior Chief Kopa’s area.
IDC group acting chief executive officer Henry Sakala said the acquisition of 90 percent stake in Zampalm is aimed at tapping into the oil market potential that lies in Zambia.
Once the Zampalm project is fully operational, the plantation will contribute to import substitution of 70,000 metric tonnes of edible oils in the country.
“This will save the country around US$70 million to US$100 million in foreign exchange outflows every year. This is a huge saving for the country through a single product,” Mr Sakala said.
Through Zampalm investment, the country will also have the capacity to export crude oil to neighbouring countries.
About 160 tonnes of crude oil is expected to be produced this year compared to 31 tonnes last year.
“There is high demand for palm oil in our neighbouring countries like Democratic Republic of Congo and Angola which import huge quantities of crude palm oil for domestic consumption,” Mr Sakala said.
Many other markets use both palm and kernel oil in the production of merchandise such as retail food, biofuel, pharmaceuticals and lubricants.
“By investing in Zampalm, not only are we financing the production of cooking oil but creating opportunities for other industries to source their raw materials from Zampalm,” Mr Sakala said.
And as part of a job and wealth creation strategy, the Zampalm project will create out-grower schemes to provide farmers with seedlings, training, extension services and farm inputs.
“We are targeting to create out-grower schemes to cover between 5,000 and 10,000 small-scale farmers to feed the crushing plant,” Mr Sakala said.
Zampalm will also be the market for the harvested fruit for processing at its crushing plant within the plantation.
“We want people to be active participants and direct beneficiaries from the project,” Mr Sakala said.
The Zampalm project is also a sustainable business venture because farmers will be able to harvest fruit from the palm trees for 25 years.
And as the project progresses, IDC expects the public and private sector to respond positively by improving access to basic services for the community around the planation.
The board also wants the private sector to improve public infrastructure in the area.
“These [services] should typically include construction of clinics, houses and provision of services like banking, agro-input supply and information and communication technologies,” Mr Sakala said.
With a mandate of playing a catalytic role in the country’s industrialisation, rural development and job creation agenda, IDC intends to roll out the Zampalm project to other districts.
During the tour of the plantation, IDC financial and administration committee chairperson David Kombe said the project is in line with Government’s job and wealth creation agenda.
Mr Kombe is happy that 900 people have already been employed on full-time at the plantation.
“We hope to increase this rate as the project expands,” he said.
The board will source for more money to increase production of crude oil.
“We [IDC] need to look for resources to expand the project to (additional) 3,000 hectares in the next two to three years,” Mr Sakala said.
IDC board member Alexander Chikwanda is confident cooperating partners will be willing to provide Zambia with money to expand the economically viable project.
“In Zambia, we have organisations like African Development Bank which are already funding initiatives like the cashew nut project [in Western Province]. We can knock on their doors to request for funds for this [palm oil] project,” Mr Chikwanda, the former Minister of Finance, said.
For Zambeef, its shareholding partnership with IDC is a milestone in Zambia’s development agenda.
Zambeef chairman Jacob Mwanza said there is need to invest in a bigger palm oil milling plant, especially that production of oil is expected to increase.
And Senior Chief Kopa, who released the 20,000 hectares of land for the project, is happy that young people have been employed at the plantation.
He commends President Edgar Lungu for his commitment to improving the welfare of Zambians in rural areas.
The traditional leader is grateful that the President allowed the private sector to freely operate in Kopa chiefdom for the benefit of his subjects.
“The establishment of Zampalm has tremendously changed the well-being of people through reduction in poverty levels from the time the plantation started [in 2009],” the Chief said this through his spokesperson Maxwell Mulenga.
The traditional leader also praised Zampalm for building a preschool in the area through the Kopa Trust.
He is also happy that the company has started building a clinic in the chiefdom.
“Once completed, it will help prevent deaths in the area,” Chief Kopa said.
Now, to avoid risks associated with implementation of the lucrative project, IDC engaged Nelson Basaalidde, who is Zampalm out-grower scheme general manager for consultancy.
Mr Basaalidde is from Uganda, where a similar palm oil project has created 1,800 jobs for growers and 1,500 for plantation workers, who earn about US$500 per month.
CHOMBA MUSIKA, Mpika