Chapter 11. Oil palm industry growth in Africa: a value chain and smallholders’ study for Ghana 373
(b) WAML Industries Limited
WAML Industries Limited is a Free Zone Enterprise, begun in 2002 as a result of a survey which showed
that 65 percent of oil palm processing was handled by local processors, and therefore demonstrated
a need to take care of the nuts they produce which had very high demand in Nigeria. The company
produces PKO. Two kinds of oil products are produced: premium, which has less than 5 percent FFA,
and regular, which has more than 5 percent FFA.
The capacity of current equipment at Nkwantanang is 18 tonnes per day at a 38 percent recovery rate
(although during three months of continuous test monitoring of the machines, a 44 percent recovery
rate was achieved). The company employs 9 permanent staff and 15 casual workers. The raw material
supply base (palm kernel) is regular and locally sourced, even though the company has to compete
with buyers from Nigeria and other West African countries for this raw material. A strategy adopted by
individual Nigerian buyers is to increase their prices for palm kernel.
WAML purchases their raw material by setting prices around 24 percent of world market price for the
final product. Sixty kg of fresh nuts costs GHC 25-26. If they are kept for a longer period of time they
reduce in weight to about 51 kg and the quality of the oil is not as good (the oil is mostly rancid).
The company currently does not have any problem with raw material supplies. It has 1 500 agents
(aggregators) who buy on commission; last year, they bought 5 000 bags of nuts within one month
from Pramkese, Okumaning and Takorasi.
Being a Free Zone Enterprise, part of the company’s obligation is to sell 30 percent of its product
locally. As part of this arrangement it sells PKO to GOPDC and other local agents across the country.
Premium oil is sold to GOPDC. This is mainly purchased during the low production season. Because the
FFA in premium is relatively low (5 percent or less), it commands higher prices. Regular oil constitutes
about 70 percent of the PKO produced by WAML. The main market for regular (5-7 percent FFA) is in
Nigeria, with ROM and Gulf Impex in Nigeria, as major customers. This is because the Nigerian market
price is always higher than the world market price by 20 percent. There are also unaffiliated individuals
who purchase PKO from WAML to supply the local market, although such purchases are not very
regular. Some of these purchases are sent to areas such as Kasoa (Central Region) and Obuasi (Ashanti
Region). The quality of the PKO is determined by GOPDC. Palm kernel cake is also produced locally for
the poultry industry. A 50 kg bag costs GHC 60. The palm kernel shells are exported to Norway and
Germany. The company operates an integrated system, from cracking nuts to processing, and normally
generates a 15 percent net profit margin.
Table 12 summarizes the profitability status of the company. Estimated gross margin per MT of
processed palm kernel is GHC 60.87. Similarly, based on the estimated RCR of 1.56, large scale palm
kernel processing appears profitable.