GOL Attracts US$1.6bn Agro Investment

MONROVIA – The Government of Liberia (GOL) has announced that it has generated interest from a major Asia-based agriculture company interested in investing in the country’s oil palm industry.

According to the GOL, Golden Veroleum, an Indonesian oil palm company based in Singapore, is considering a potential investment in the amount of US$1.6 billion in 240,000 hectares of oil palm plantation in Southeastern Liberia.

The southeastern region is one of the most economically deprived areas in the country.

Experts say should the investment materialize, it would boost economic activities in Grand Kru, Sinoe, Riverces, Maryland and River Gee counties.

Speaking to our business correspondent over the weekend in Monrovia, National Investment Commission (NIC) Chairman, Dr. Richard V. Tolbert, said Golden Veroleum had already agreed to build 20 oil palm mills in the concession area.

Golden Veroleum’s investment has the potential to create more than 30,000 direct jobs over the next 10 years, Tolbert said.

He indicated that negotiations had been ongoing between the GOL and Veroleum for a year prior to the visit of the delegation to Singapore.

According to the NIC boss, Golden Veroleum’s Chairman, Franky Oesman Widjaja, considers Liberia a major priority for investment.

Widjaja is an Indonesian billionaire whose family is one of the richest in that country.

The NIC boss spoke with our economic reporter a few days following the return of a high-powered Liberian delegation to Indonesia.

The ministerial delegation, headed by Tolbert and Agriculture Minister, Dr. Florence Chenoweth, paid a weeklong visit to Indonesia earlier this month at the invitation of the company. During the visit, the Indonesia-based global oil palm giant expressed interest in investing in Liberia’s agriculture sector, especially the oil palm industry.

Other members of that delegation included Labor Minister, Tiawon Gongloe; Deputy Finance Minister for Revenue, Elfreida Stewart Tamba; Deputy Justice Minister, Sam Russ; Charles McClean and Vaani Baker of the NIC.

Tolbert said key issues such as social responsibility on the part of the company including housing, medical facilities, education and land use had already been hashed out.

“This company has agreed to build housing estates in the concession areas, inclusive of clinics and schools, and will provide training, electricity and other facilities for its workers and residents in those communities,” Tolbert stated.

Golden Veroleum has already prepared a tentative budget for operations in Liberia in which the company has set aside US$400 million to construct palm mills in the concession areas, including out-grower areas and port and bulk stations, US$250 million for housing (excluding maintenance), US$100 million for equipment (excluding maintenance), and US$850 million for land development including cost to maturity, preparation, roads and bridge repairs, terracing, ground cover, weeding and pre-production fertilizer.

Golden Veroleum, a world leader in oil palm production, is an associated entity of Golden Agri-Resources that has significant operations in Indonesia, including major downstream operations in Africa and other parts of the world.

The company was listed on the Singapore Exchange Securities Trading Limited (SGX-ST) in 1999.

Golden Agri-Resources Ltd (GAR), the agribusiness division of Sinar Mas, one of Indonesia’s largest diversified groups, is one of the world’s largest privately owned oil palm plantation companies.

It has a total of 406,000 hectares of planted area located in Indonesia. GAR operates 33 palm oil processing mills, three refineries and six kernel crushing plants.

The company’s primary activities include cultivating and harvesting of oil palm trees; processing of fresh fruit bunch into crude palm oil (CPO) and palm kernel oil; and refining CPO into value-added products such as cooking oil.

GAR also operates in China through an integrated deep sea port, storage, oil-seed crushing facilities and refinery facilities in Ningbo and Zhuhai.

The company is represented in Africa by Veroleum, which serves as its African business development partner.

During the discussions, Frank Wakefield, director of Agro-Technology of Veroleum, remarked, “Liberia offers good potential for palm oil development given its climatic and soil profile, and importantly we see a government willing to work constructively and proactively with serious investors. We hope to develop a long-term partnership with Liberia and commence in 2010.”

With Sime Darby starting operation in western Liberia, Dr. Tolbert said, the attraction of Golden Veroleum to the southeastern region of the country will spur the economy; improve the lives of the people; and increase government’s income generating capacity.

He pointed out that potential investors were coming to Liberia because of the leadership role being played by President Ellen Johnson Sirleaf.

If approved, the Golden Veroleum agreement will create strong competition with Sime Darby, a Malaysian company that was recently granted a concession area by the government to invest over US$800 million in oil palm production.

Tolbert described his investment trip to Indonesia as one of the most exciting and rewarding.

He said Liberia was blessed to have attracted Golden Veroleum a company that has already planted over 400,000 hectares of land in Indonesia.

Tolbert stated that Golden Veroleum had already conducted feasibility studies of Liberia and was prepared to begin operations as soon as negotiations were concluded.

According to the NIC Chair, Golden Veroleum will be able to produce finished products from Liberia if it is allowed to invest in the country.

He called on Liberians interested in planting oil palm to do so, noting, “The demand for oil palm is very high in the world.”

Tolbert also indicated that Golden Veroleum would strongly empower small holder farmers in order to increase their productivity and yields.