Nigerian billionaire Rasheed Sarumi's Presco commits $200 million to Ondo oil palm project

Presco will invest an initial $200 million, about ₦278 billion, in Ondo State to build large-scale oil palm plantations, a processing mill and a refinery, the company's chief executive Rasheed Sarumi said on Friday.

The commitment was made during a visit to the governor's office in Akure, the state capital in southwestern Nigeria. Governor Lucky Aiyedatiwa promised land, security and accelerated approvals to get the project moving.

Sarumi described the move as a return rather than an arrival. "Coming to Ondo State is a sort of homecoming for us," he said. "Ondo State, from today, is part of the Presco Plc network." The company has operated outside the southwest for years.

The scale of the commitment stands out against what Presco is currently earning.

The company reported second-quarter profit of ₦33.02 billion, about $23.8 million, on Wednesday, a fall of 20% from a year earlier as revenue declined. Half-year revenue was flat at ₦198.75 billion and profit fell 7.3%. The shares dropped 10% across the five sessions to Wednesday, though they remain up almost 43% for the year.

The Ondo project is also not the only capital commitment on the table. Presco has separately agreed to acquire a Ghanaian oil palm company for $124.9 million. Together the two amount to roughly $325 million of spending pledged in a period when quarterly profit is going backwards.

The commercial argument rests on a supply gap.

Sarumi said Nigeria records a shortfall of almost one million tonnes of crude palm oil against what it needs to produce edible oil, fats, soaps, creams and cosmetics. The country consumes far more than it grows and imports the difference, largely from Southeast Asia.

"Edible oil is one of the top four things people buy on the shelf when they go to the market every day, so it is essential that we should be able to produce it locally," he said.

Palm oil is a slow business to enter. Oil palms take three to four years to bear fruit after planting and several more to reach full yield, which means a plantation investment made now generates nothing for most of a decade. That is one reason Nigerian producers have not closed the gap despite consistently high prices.

Sarumi said the company operates under certification from the Roundtable on Sustainable Palm Oil, an international standards body whose rules require producers to obtain the free, prior and informed consent of communities living on or near the land, establish clear boundaries and implement community action plans. He warned that failure to comply could cost the company its certification.

That matters commercially rather than reputationally. RSPO certification is what allows a producer to sell into European and other regulated markets, where buyers face rules on deforestation and land rights.

Presco is a subsidiary of SIAT Group, the Belgian agro-industrial company, whose group chief executive Adewale Arikawe comes from Ondo South. Arikawe put the figure the same way Sarumi did.

"We are looking at an investment of about $200 million to start with," he said. "We do plantation, we do a fully integrated edible oil business, and that is what we have brought to the state."

Sarumi's control of Presco runs through that structure. His Saroafrica International acquired 86.7% of SIAT in March 2024, and SIAT holds 520,200,000 Presco shares. The group has operations in Nigeria, Ghana, the United States, China and Belgium, where SIAT is headquartered.

Ondo is Nigeria's dominant cocoa state, accounting for about 40% of national production, and the governor framed Presco's arrival as extending that agricultural base into oil palm.

Aiyedatiwa was explicit about what the state would provide. "I've already made up my mind that Presco must have a place there," he said. "We will be mapping out where we are going to give to you that will not be troublesome and will be safe."

He said the Ondo State Investment Promotion Agency would handle documentation and remove bureaucratic obstacles, and described the state as among the safest in the country for agricultural investment.

Neither Presco nor the state government gave a timetable for the project, named a site, or said how much land would be allocated.