Investments in Palm Oil Production Pay Off
Anoop Sharma, GM, BIDCO talks to World Business Journal about the country’s only palm plantation and achieving self-sufficiency in the vital palm oil crop.
Can you elaborate on BIDCO’s structure and ongoing operations in Uganda?
BIDCO, a joint venture between BIDCO Africa and Wilmar International, operates under a tripartite agreement with the Government of Uganda, which holds a 10% stake.
Our strategic partnerships with the International Fund for Agricultural Development (IFAD) and the National Oil Palm Project (NOPP) are integral to the Vegetable Oil Development Project (VODP). This initiative is focused on empowering smallholder farmers and enhancing vegetable oil production in Uganda, aligning with President Museveni’s vision for sustainable palm plantation development.
As the sole palm plantation company in Uganda, we aim to double production within three to four years, reducing Uganda’s $300 million reliance on palm oil imports through domestic production. We operate in four locations: Jinja, Kalangala, Buvuma, and Sangobay.
Our operations span from upstream oil palm plantations and mills to midstream edible oil refineries and downstream consumer products. Our refineries, with a capacity of 1,500 tons, add value to upstream farming activities. Byproducts are used in manufacturing soap and cooking fat, while edible fat supports bakeries. We prioritize sustainability by recycling palm oil production waste, like fresh empty fruit bunches (EFB), as fertilizer.
In downstream operations, we distribute about 300,000 tons annually across Uganda. Our current production of 45,000 tons of crude palm oil accounts for 20% of the country’s total output.
What expansion initiatives are currently in progress?
The government agreement covers 26,500 hectares, and we’ve initiated a new plantation on Buvuma Island with 2,500 hectares planted, plus an additional 1,500 hectares contributed by small and medium farmers, totaling 4,000 hectares. Another plantation in Sangobay, near the Tanzania border, is underway, covering approximately 8,300 hectares. Palm plantations, known for sustainability, require substantial investments, with an initial cost of about $10,000 per hectare. We adhere to the principle of having a nucleus owned and managed by us, with the land belonging to the government. This model fosters a collaborative public-private enterprise, benefiting the government, the community, and us.
How has the investment journey in Uganda unfolded and are there plans to diversify beyond palm oil investments?
Investing in Uganda’s palm sector with Wilmar, the world’s largest palm farmer, offers unique opportunities. We use our funds to navigate financial challenges, avoiding high borrowing costs, and focusing on sustainability amidst global climate variability, especially rainfall variability. Despite irrigation’s high costs, the government’s offer of an additional 100,000 hectares could make Uganda self-sufficient and even support exports.
For the first time in three years, our plantations are experiencing significant growth. Positive economic signs include low inflation, a stable currency, and strong foreign reserves. Driven by Uganda’s growing economy, we’re expanding into rice cultivation, pending a proposal review by the UIA.
