African Development Bank approves €10 million loan for replanting and expanding palm oil, rubber in Gabon

The Board of Directors of the African Development Bank (AfDB) has approved a €10 million loan under its private sector window to finance Belgium's Tropical Agriculture Investment Company (Société d’Investissement pour l’Agriculture Tropicale, SIAT) for its expansion project in Gabon.

The project involves both replanting old plantations and establishing new ones with high-yielding trees (see table for an overview of current operations):

• Oil Palm: (1) establishing a new 4,250-ha oil palm plantation and replanting 1,500-ha in Bindo; (2) replanting a 750-ha oil palm plantation in Zilé; (3) replanting a 1,000-ha oil palm plantation in Makouké; (4) modernizing a palm oil mill and palm kernel crushing plant in Makouké; (5) expanding the capacity of the palm oil refinery in Lambaréné from 50 tons per day tpd) to 75 tpd; (6) modernizing the soap manufacturing plant in Lambaréné, and (7) increasing the capacity of palm oil storage tanks in Lambaréné and Port Gentil by 3,000 tonnes.
• Rubber: (1) re-planting 4,100-ha nucleus rubber plantations in Bitam and Mitzic; (2) supporting a 2,000-ha out-grower rubber scheme; and (3) establishing a new crumb rubber line with a capacity of 40 tpd in Mitzic.

According to the AfDB, the project will have a strong social development impact. At the local level, it will inject capital into the economy of Woleu-Ntem and Moyen-Ogooué provinces and help increase the living standards of the rural population.

The expansion project will provide employment for an additional 520 permanent staff for field preparation, planting, harvesting oil palm fruit, and tapping rubber latex. The project will further support some 500 out-grower farmers. The project staff and out-growers will be provided regular training to enhance their skills and improve their productivity. At the national level, the project will help Gabon expand its oil palm and rubber industries and produce more value added products. It will also generate tax revenue for the state and help to generate foreign exchange earnings.

The project will contribute to diversify Gabon’s economy, which is heavily dependent on crude oil, a sector controlled by a tiny elite. The country's petroleum resources are in decline and even though Gabon has a large agricultural potential, the sector has been underinvested because of the past oil boom. Palm oil and natural rubber now offer the most immediate strategy to make Gabon less dependent on oil revenues and to prepare it for the unavoidable post-oil era. Both commodities are experiencing record prices as a result of high petroleum prices (palm oil as a substitute for diesel, natural rubber which follows petroleum-derived synthetic rubber prices):
energy :: sustainability :: biomass :: bioenergy :: biofuels :: palm oil :: natural rubber :: rural development :: Gabon ::

Siat Gabon is actively involved in community development initiatives in the project area, providing social infrastructure such as roads, bore holes, and electricity. The company has created six modern townships dotted with over 900 houses for the workers. In addition, Siat Gabon has established “Cités cadres” with a total of 200 houses for senior staff, supervisors, and skilled workers in the project area. The project has further provided 8 primary schools in the neighboring communities with a combined enrollment of about 800 pupils. The company also operates 2 clinics, one for general healthcare and the other for maternal healthcare.

Women represent about 35% of the permanent workforce and about 40% of the seasonal workers. They are mainly involved in nursery activities, fruit collection, processing operations, quality control, and as office work. Women hold about 25% of the middle management positions in the company, including the post of Deputy MD. Women will benefit from a number of indirect jobs like retail shops and small restaurants to cater to the needs of the local population. The company operates a 'village plantation program', under which women are encouraged to cultivate food crops in the company’s plantations within the first two years of planting. This has enabled the women to ensure household food security as well as generate additional incomes.

As a result of a privatisation exercise implemented by the Government of Gabon in 2003, Siat acquired Agrogabon, Hévégab and a part of Sogadel, namely the Ranch of Nyanga. On the 5th of April, 2004, the take-over convention for the above mentioned enterprises was signed. Siat Gabon was created in order to accommodate the assets of these SOE’s.

The rubber activity of the company, located in the northern part of Gabon, consists of the Bitam Estate (2,500 ha mature rubber plantation) and the Mitzic Estate (5,500 ha of mature rubber plantation). It also includes 2,500 ha of mature outgrower plantations. At Mitzic the company operates a crump rubber factory with a daily capacity of 50 tonnes. Expansion work on estates and factory have resumed. The entire rubber production of 15,000 tonnes per annum is exported.

The oil palm activity is located around Lambarene and Makouké, and comprises 8,000 ha of mature oil palm plantation, a palm oil/palm kernel mill with a capacity of 30 tonnes ffb/hour, a soap factory of 25,000 tonnes/annum and a refinery/fractionation plant of 50,000 tonnes of oil per annum. Production is mainly meant for the domestic market.

The cattle ranch, located in the Province of Nyanga in the southern part of the country, comprises a concession of 100,000 ha. Presently, a heard of 2,000 head is meant to be increased to 20,000 over the next ten years. Cattle of the Ndama type will be imported from the Democratic Republic of Congo. It is also envisaged that approximately one third of the ranch area will be converted into an eco-tourism site.

Siat is an active member of the Round Table on Sustainable Palm Oil (RSPO).

References:
SIAT: Siat in Gabon.

Africa News: Gabon: AfDB loans €10M for palm oil, rubber - September 17, 2007.