PROPOSAL by the Board and Management of Presco Plc to pay 20 kobo per share dividend amounting to N200 million for the year ended December 31, 2009 was at the weekend endorsed by the company’s shareholders.

Quoted on the floor of the Nigerian Stock Exchange (NSE) in 2002, the company specialises in the cultivation of oil palms and in the extraction, refining and fractioning of crude palm oil into vegetable oil.

Addressing shareholders during the 2009 yearly general meeting, the Chairman, Pierre Vandebeeck, said Presco commits a significant amount each year to assist in education, water, electricity provision and road maintenance to host communities, adding that in 2009 the gesture gulped N32.5 million.

Vandebeeck said the company within the year under review recorded N4 billion turnover as against N3.9 billion declared in the 2008 financial year. However, based on various challenges in the sector and the larger economy, according to the company, profit after tax dropped from N674 million in 2008 to N239.1 million in 2009.

According to the chairman, all plantations in West Africa experienced unusual low yield during the “lean season” from May to September 2009.

Vandebeeck said, “low crop has impacted on our production cost. In order to maintain customer satisfaction, we imported oil from our Ghanaian sister company. During that period, naira depreciation affected our exchange losses and also impacted heavily on our Forex debt and Forex cost while inflation remains high at ten per cent.

“Banking crisis did not affect us so much as Presco has a very good track and generate sufficient cash flow” said Vandebeeck, adding that economic activities continue to be hampered by decaying infrastructure, energy shortages, among others.

Vandebeeck assured the shareholders that the company has a long-term investment strategy made up of two parts which he identified as increase of the production base of the company and increase in the processing capacity.

He explained that increase in the productive base is being carried out by developing additional land area as well as by replanting existing, older plantings with more productive planting material.

He added that In 2009, 493 hectares were planted at Ologbo making a total of 1,458 on the company’s new Ologbo estate, pointing out that processing capacity improvement continue to be made to meet future plantation requirements.

Explaining further, he said, “significant revamping of existing equipment has been made to secure mill reliability. In addition, a new digester and press have been installed and progress made with the installation of a third steriliser, the shell and empty FFB system for fuelling 30 tons per hour boiler.

“Second line for milling at 48 tons per hour should be completed by end of this year. In addition, our refinery will also be expanded to 100 tons per day.

“In the near future, investment in a 2.5 turbine will improve electricity generation. Investment in a bio-methanisation plant will generate clean gas for boiler or generation from our effluent.

“By these steps forward, the company is able to further reduce the use of diesel generators and consequently reduce cost of production. It is also part of the company’s environmental commitment to minimise the impact of global environment by reducing the use of fossil energy and reducing emission,” said Vandebeeck.

(Source: Guardian)