OBG talks to Bertrand Vignes, CEO, SIFCA

 Interview: Bertrand Vignes

What markets are the main destinations for Côte d’Ivoire’s palm oil products?

BERTRAND VIGNES: Côte d’Ivoire is now a major African palm oil producer and the sector is very export-oriented. Around one-third of our production is destined for the local market, while around two-thirds is exported. Annual raw palm oil production is about 400,000 tonnes, and our group’s processing capacity is 500,000 tonnes. Refining 400,000 tonnes of raw palm oil generates around 300,000 tonnes of palm olein, or edible oil, and 100,000 tonnes of stearin and fatty acids, which are sold to the soap industry, mostly in Côte d’Ivoire but also throughout the region. Of the 300,000 tonnes of olein, around 100,000 tonnes are sold on the Ivoirian market and the rest are sold in the ECOWAS area. Olein exports do not go beyond West Africa as there is an 800,000-tonne deficit of edible olein in the region, though occasionally stearin and fatty acids surpluses are exported to the EU. The sector also produces palm kernel oil, which is used both locally and exported.

What has been the impact of Asian palm oil imports?

VIGNES: Imports from Asia are not problematic as long as taxes are paid. There are not a lot of Asian imports, but many have been illegal. The country’s borders were less protected during the 2011 crisis, making it easier to avoid paying import taxes and value-added tax (VAT), which is 18%.

As a result of this unfair competition, we have asked the authorities to consider lowering VAT on palm oil and sugar, milk products, flour and other products. We would also like the West African Economic and Monetary Union and ECOWAS to harmonise external tariffs to avoid illegal flows into the area and for the authorities to take measures against smuggling.

How have new policies affected sugar production?

VIGNES: The sugar industry in Côte d’Ivoire was created to supply the national market and was once a government project but has since been privatised. There are two main players today, including ourselves. We have two clear objectives: to maintain social activity, such as generating jobs and wealth, in disadvantaged areas of the country’s north; and to provide the Ivoirian market with high-quality sugar. Sugar producers are trying to keep their production and industrial capacity in line with changes in the market. There are some problems with the market, with a lot of illegal imports in 2011 due to the unstable border, though the situation has regularised somewhat and is better than the palm oil sector. The two major players are able to satisfy the needs of the domestic market, though there are occasional exports of surpluses as well.

What are the main obstacles to developing village plantations for rubber, sugar and palm oil?

VIGNES: We seek to develop industrial plantations that have high productivity and standards in a way that is coordinated with small and medium-sized private planters. Around half of our rubber production and 60% of our palm oil production come from planters. As for sugar, however, village activity is more common, and we have facilitated such growth. In palm and rubber, there was a deliberate policy by the government and international donors to finance planters, but in sugar it has been private operators who have developed village plantations. Two things are needed. Planters have to be convinced that they have an interest in investing. They also need the means to do so. In rubber there has been much enthusiasm, as everyone is convinced of the utility of long-term savings. Although it takes a few years for trees to start producing, prices have been favourable in the past few years, and there are excellent methods and varieties in use, thanks to agro-industrial firms that have shared their expertise. As such, the country is quite advanced when compared to Indonesia, for instance. Agro-industrial companies have to dedicate resources to this development, which consists of providing both high-quality nurseries that are available to planters and technical assistance.