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DekelOil Public Limited (LSE:DKL), operator and 51% owner of an established vertically integrated palm oil project in Côte d’Ivoire, has announced that it has received 400,000,000 FCFA (approximately 610,000 Euros) out of a total advance payment of 600,000,000 FCFA (approximately 915,000 Euros), as part of an off-take agreement signed with Societe Africaine de Raffinerie, a palm oil refining company in the Côte d’Ivoire, to supply Crude Palm Oil produced from its 60 t/hr extraction Mill.
SAR is in the process of constructing and installing a palm oil refinery on a site in the Industrial Zone of Yopougon, Abidjan. The refinery is targeted to be capable of receiving the first delivery of CPO in Q2 2014. From commencement it will require 6,000 tonnes of CPO per quarter as feedstock. Under the terms of the off-take agreement, DekelOil will deliver 24,000 tonnes per annum of CPO that satisfies SAR’s quality thresholds: no higher than 7% acidity and 0.3% moisture content.
DekelOil will receive the official AIPH price, which is similar to the CIF Rotterdam price, for the palm oil on the date of delivery of the CPO to SAR’s refinery at the Yopougon Industrial Zone. By selling the CPO locally, the Company will benefit from reduced transportation, insurance and marketing costs.
Ahead of the commencement of the delivery of CPO in 2014, SAR has agreed to provide DekelOil with a cash deposit representing 25% of the value of the initial quarterly requirement. Accordingly, as stated above, DekelOil has already received the sum of 400,000,000 FCFA. This development is in line with the Company’s strategy to commercialise its assets in order to build a leading West African palm oil company and importantly, the Company continues to negotiate with other parties to further bolster and diversify its customer base.
Dekeloil Executive Director Lincoln Moore said, “This off-take agreement has secured a buyer for our CPO production for the peak harvesting season of March to June. This is a major step in terms of commercialising our assets and maximising returns once production commences in Q1 2014 at our CPO Mill, which will have a capacity to produce 70,000 tonnes per annum.
At this point, DekelOil will have one of West Africa’s largest mills; a world-class nursery with an annual capacity of 1 million seedlings; agreements with 5,000 local smallholders and cooperatives to supply feedstock for the Mill from over 27,000 hectares of mature plantations; and 1,900 hectares of Company-owned estates. With material revenues expected to be generated in the near term, we are on track to build a leading palm oil company focused on West Africa.”
