Tutu Agyare, Managing Partner and Chief Investment Officer for Nubuke Investments, an Africa focused Hedge Fund domiciled in the UK. In early 2014, Nubuke made a significant purchase of shares in UK-listed DekelOil, a palm oil producer with plantations in Côte d'Ivoire.
Q&A - DekelOil aiming to be profitable this year
By Charlotte Kan
Palm oil specialist DekelOil, which has kicked off commercial production at its extraction mill in Ivory Coast, recently said it raised £700,000 through a share placing, which was anchored by high profile Africa-focused fund Nubuke. Proactive Investors (PI) caught up with director Lincoln Moore (LM) to find out more about the placing and what the firm has in store for 2014.
PI: The company sold the shares at 1.5 pence - a premium to the previous trading day's closing price of 1.43p - with Nubuke soaking up £600,000. What's been behind the move?
LM: It has been part of our company strategy for some time now, that we would like to introduce institutions to our shareholder list.
Really, the goal is to increase our fire power on our share registry as we move into our expansion phase and having shareholders like Nubuke on board certainly allows you to be pretty nimble in taking advantage of any opportunities.
PI: Can you tell us a bit more about Nubuke? Who are they? Why did they invest in you?
LM: Nubuke is a London based Africa-focused fund, which is very committed with Côte d' Ivoire as an investment jurisdiction. They also closely follow the other key palm oil players in West Africa. So we viewed this investment as a strong endorsement of our short and long term strategy, and obviously our current share price position.
PI: Last month, DekelOil started production from the crude palm oil extraction mill in the Ivory Coast. How is this going?
LM: Very well. Over the next two weeks, the aim is to have the mill operating at its full capabilities and move and transition into normal operation phase. We expect to announce this when it occurs in the next couple of weeks.
PI: Where does the company go from here? What are the next key milestones?
LM: For 2014, really, our entire focus is on the operations at the first mill site, and importantly, maximising production of CPO from that site. The other challenge is working on logistics to ensure we bring the amount of fruit that we want to bring into our site as efficiently as possible.
We did announce that we are aiming for 35,000 tons of CPO in 2014, obviously we would love to beat that. We certainly aim to be profitable this year. We expect to release our forecast in this regard, in the coming weeks.
I have to say we are quite fortunate. The CIF Rotterdam palm oil price today is US$965, which is about US$150 a ton higher than we started the build, which is obviously very supportive.
Then from 2015 onwards we will really look to try and drive towards the mill’s maximum capacity of 70,000 tons of CPO as quickly as possible.
Also, towards the back end of the year, I think we are going to turn our attention to our second project, which is a land bank at Guitry for 24,000 hectares (ha).
We would like to look at commencing a nursery site there. We will certainly be looking at planting more hectares. We currently have 2,000ha of that first site, and we look to increase that at the back end of the year as well.