Nigeria market has always derived its source of revenue from agricultural sector. Petrol hand have been itsoil hand. This has transformed due to crude petrol discovery in the late 60's. has been one of the very most active of Nigeria's agricultural sub-sectors.
The development of the economical oil palm experienced continued to attract the attention of various administrations in Nigeria since the colonial period at this point. This was not unconnected with its financial importance as an essential source of edible and technological oils of a huge National revenue earning potentials. Hand oil and palm kernel engine oil, the major products of engine oil palm, were once very vital to Nigeria's export trade as Nigeria was a leading producer of essential oil palm produce on earth. However, since 1965, there has been a noticeable decline in her oil palm production (Mgbeje, 2004).
However, challenges facing the commercial agriculture in Nigeria is usage of land. In global terms, taking oil palm for example, a five thousand hectare plantation is relatively a very small plantation. For being commercially viable and competitive,
an oil palm plantation that could have modern control facilities (essential oil mill, turbine/boiler for energy generation etc. ) shouldn't be significantly less than ten thousand hectares. The larger the size of the plantation, the bigger would be the efficiency of operation. But regardless of the abundant arable land available generally in most elements of Nigeria, the procedure of acquiring land for large range agriculture is very cumbersome because of the land tenure system.
The increased demand and lack of supply has resulted in rising food prices. Research and technology is vital to build up new crops and increase crop yields.
Presco concentrate is on delivering sustainable agriculture through progressive research and technology. The business is a fully-integrated agro-industrial establishment with oil hand plantations, a hand petrol mill, a palm kernel crushing flower and a vegetable oil refining and fractionation herb. It had been the first of its kind in Western world Africa.
Presco Focuses primarily on the cultivation of oil hand and in the removal, refining and fractionation of crude palm oil into finished products. It's resources specialty extra fat and oils of spectacular quality to customer requirements and assures a stability of supply of its products all year round. This possible-ness is made by the involved nature of the company's production process. And its own the Nigerian market head for specialty fat and natural oils.
Presco is a general population limited liability company designed on Sept 24, 1991 under Nigerian law. Its corporate head office is at the business's Obaretin Estate near Benin City. It's holds the Obaretin Property (a concession of 7, 000 hectares) and the Ologbo Estate (a concession of 6, 000 hectares), both situated in Edo Status, and the Cowan Real estate, a concession of 7, 500 hectares in Delta Status. Presco today consists of:
Oil palm plantations and 10, 537 hectares of 9, 812 all that happen to be mature. A hand essential oil mill with a capacity of 48 tonnes fruit bunches / hour. A refinery / fractionation flower with a capacity of 100 tonnes / day. A palm kernel crushing place with a capacity of 60M tonnes / day.
Presco utilizes about 2, 161 people, also a Subsidiary or Siat SA, a Belgian agro-industrial company Specialized in professional as well as smallholder plantations of tree plants, Mainly oil hand and plastic and allied industries processing palm olive oil mills zoals, palm olive oil refining / fractionation, cleaning soap works and crumb silicone factories.
The company's functions are fully integrated with plantations, palm oil mill, hand kernel crushing herb and vegetable essential oil refining plant. It's the only fully integrated operation in Nigeria.
This coursework reviews the exterior factors that have had a direct effect on how Presco, one of the Nigeria's leading agro-industrial establishment with olive oil palm plantations, is reaching this dual concern of increasing crop produce and productions through PESTLE research. This involves figuring out the political, economic, social, technical, legal and Environmental factors.
POLITICAL FACTORS
Businesses can be influenced by many areas of government policy. In particular, all businesses must adhere to the law. They must also consider the impact of any forthcoming legislation on their operations. This may require taking action before the legislation comes into effect. 3 For instance, recent public sector budget reductions by the government and increased fees in higher learning and tertiary institutions are affecting the education sector. For students this has supposed making key decisions about how they intend to pursue their professions. This in turn has recommended that academics providers need to examine how they will meet the problems of creating income.
Presco identified these changes in the educational surroundings could impact on the number of potential employees with the abilities and competencies that it requires. For example, it possessed to consider the affordability of advanced schooling for students and exactly how this could affect long-term development opportunities within the business. The increasing cost to become a student may restrict the social mobility of talented individuals and they may then need to consider alternate routes to gaining qualifications and experience.
SCHORLARSHIP AWARDS SCHEMES
Presco has therefore reassessed its workforce strategy. It has now engaged in strategies to ensure it has enough workers with the right skills both now and in the foreseeable future. To address the changes in the educational scenery, Presco has released apprenticeships and improved its graduate plan. The company has embraced the strategy of direct training as it offers the company with a new pool of expertise, with the focus on individuals who have decided to specialise in Agro-Allied or Agricutural Research degrees. This is why Presco has embarked on creating Apprenticeships in 2007. This widens the range of talented young people that Presco needs and supports the organisation's long-term commitment to career development of its employees.
Also, in 2007 Presco launched a five-year sponsored level programme with the University or college of Benin. The degree programs B. Sc (Hons) Agro-Allied Management and B. Eng (Hons) Agricultural Executive attract applications from students throughout the nation. These degrees allow students to incorporate academic analysis with on-the-job learning. Students spend 1 day a week studying on campus and four times a week working at Presco. Presco gives the course fees as well as offering students a stunning salary from day one. Upon graduation they can further develop their professional profession within Presco.
As part of its ecological focus, Presco has also responded quickly to federal government initiatives on environment change and lowering emissions. For instance, it's been mixed up in development of a fresh concession into a sustainable integrated job for conservation and engine oil palm creation.
In Oct 2006 Presco got into into a deal with the DOEN Foundation, based in holland, for the co-funding of the Green Ologbo Project. This project is part of Presco's development program for what will become the Ologbo Estate petrol palm plantation and is also aimed at making certain the planning and execution of the development and its long-term management is completed in a ecological manner.
ENVIRONMENTAL FACTORS:
Organic waste materials is one of the key issues confronted by the olive oil palm industry, especially in Nigeria where lowland rainwater forests contain high levels of biodiversity.
Presco Believes strongly in sustainable development predicated on the reduce, reuse, recycle basic principle. All the organic misuse from the mill is employed in the plantation as an all natural soil enhancer assisting to minimize the utilization of fertilizers, or as bio-fuel for the boiler to create renewable energy with the turbines.
Pest and disease:
Constant phytosanitary supervision is Executed to respond pre-emptively to pest and disease occurrences. That is preferred to extensive chemical use. By conserving the natural predator-prey circuit Presco retains its palms free of undesired pests.
Further More, the natural event of insects Stimulates the entire pollination of the female flowers. Mill and plantation operate as a built-in system according of waste removal. The residues of the mill (clear fruit bunches, fibers, kernel shells, ash, hand kernel wedding cake (PKC) and effluent) are recycled. Once fresh fruit bunches are processed and fruit latvian removed for olive oil extraction, about 20% of the volume of the berry bunches is recycled as clear super fruit bunches (EFB), All which are delivered to the field as mulch and a valuable substitute for chemical Fertilisers. After extracting palm olive oil from the mesocarp of the fruit latvian removed from the fresh berries bunches the remaining fibers, the shredded bare fruit bunch and the shell are being used as petrol in the boiler, All which in turn steam generation rates for control.
Presco has been running for 75% on Green energy. Ash from the boiler and PKC That may not be oversold Also make good fertilizer and are applied in the plantation. Mill and refinery effluents are anaerobically digested in three large retention ponds. A fourth pound, which is aerobic, completes the process. The solution at the end of the procedure contains some nutrition and is applied to the plantation as liquid fertilizer. No effluent is released into any river. In recognition of its ongoing Efforts to use in an ecologically-friendly manner-, Presco received the exclusive Environment Prize from the Nigerian Conservation Account in 2000. An Environmental Impact Diagnosis / Friendly Impact Diagnosis for Ologbo Property was Completed by Blue Fin in 2003 and was approved by the Federal government Ministry of Environment in 2004.
SOCIAL FACTOR:
Social factors relate to changes in the behavior, tastes and standards of living of areas on an area, nationwide and international scale. Presco, guided by its sponsor community Insurance plan, has embraced this aspect of population with several community development assignments as a useful demo of the soul of relationship with and goodwill to the people in the web host communities.
Such projects are the Presco Scholarship Plan under which ten students from variety areas at Cowan, Obaretin and Ologbo each receive NGN50, 000 as a scholarship or grant. Also drinking water pumps and boreholes are actively retained in 11 villages. Other tasks are assist with primary and secondary classes, maintenance of highways, provision of electricity in variety communities and the offer of work to indigenes of sponsor communities.
Presco also designed and built a model principal school for the kids of Agbomoba and neighbouring villages in Ikpoba-Okha MUNICIPALITY Area. The job was carried out by Presco with co-financing from the Edo STATE.
In 2000 the electrification of Agbomoba village in Ikpoba-Okha Local Government Region of Edo Condition was completed with assistance from Presco. Obagie and Uroho areas were also linked to the Country wide electricity grid in 2009 2009, while Ekosa and Owanoba areas were given electricity exclusively financed by Presco Plc.
Annually Presco provides several college or university and polytechnic students with commercial training and research placements as well as providing opportunities under the National Children Service Corps programme.
In an attempt to ensure that the company's presence has an optimistic effect on the lives and social well-being of the coordinator communities, the relationships department deals with all aspects of community relationships. More specifically, it targets employment, educational infrastructure, highway treatment, scholarships for students, provision of electricity, water supplies and other essential facilities.
ECONOMIC FACTOR
Economic factors relate to changes such as costs and prices of goods, interest rates, wage rates, exchange rates and the pace of inflation. All of these affect the power of businesses to generate earnings and need close monitoring. Changes in the wider current economic climate impact on businesses. (www. businesscasestudies. co. uk)
In 2008-09, the Nigerian current economic climate went into recession. This had a poor effect on the agro-industry. During this period unemployment was rising. Even people in work thought the effects of the recession. Many employers were compelled to cut wages or even to keep pay rises suprisingly low.
As a result, this had a direct effect on Presco operations. This was one among the factors that required Presco to restructure its procedures. The company was necessary to obtain funds from the bank to funding this restructure. However, Presco was able to survive the overall economy downturn which is one of the major employers of labor in Edo and Delta areas in Nigeria, with a total around 3, 250 employees as at February 2013. Indirectly, Presco's functional restructuring positively effect on the livelihoods of several more folks through transport contracts, construction contracts, fresh fruit bunches and kernel buys from farmers, as well as by the company being a large consumer of goods and services.
Another important financial influence on the business is the level of competition in its markets. In the Agro-industry Presco is facing increased competition from rival competition like OKOMU Oil and others. Presco also encounters competition from local farmers. Although local farmers don't have Presco' reputation and knowledge, they are able to offer low prices.
Presco response to this difficult economic and competitive environment is a multi-channel strategy. This calls for offering clients more options in that they access their products and services. The company has also increased its product collection. It now offers a wider selection of products to meet customer requirements. This approach is leading the market, and it includes enabled Presco to secure a competitive benefits.
LEGAL FACTOR
Legal factors relate with both new and existing laws, directives and legislation regulating how businesses behave. This can be with regards to other businesses, customers or the environment. For example, it is vital that all agricultural products are being used safely. Dependable businesses not only abide by the law, they seek to create requirements above minimum amount requirements.
one of the key issues with regards to plantation in Nigeria is identified conflict with the local communities with regards to the possession of the land. This is because of the lack of quality concerning land status and the legal ownership of land.
Despite efforts taken by the government, communities and other stake holders, this land problem is a classic issues for years in Nigeria. A careful check up on land status is essential prior to acquiring the land or starting the planting.
However, careful consideration where taken up to acquired lands from the federal government, host neighborhoods and individual land owners.
Also, Presco has been compliant with the health and safety polices guiding the workforce place. The business has in his career only adults and comply with the guidelines and regulations in effect. This has engendered a cordial marriage with the variety communities.
The Company maintains a policy of giving good consideration to applications for work of disabled individuals having regards with their particular aptitudes and capabilities. The Company conducts its affairs in a safe and environmentally lasting manner as well as promote the health of its employees, contractors and host neighborhoods. Presco Plc complies with all suitable environmental, health insurance and safety regulations and aims to improve its performance in these areas. Environmental, health and safety concerns are integrated into business decision-making. The business works a contributory pension structure covering all entitled employees in accordance with the Pension Reform Take action 2004. Deductions of 7. 5% are made from employees' emoluments and in addition, the business makes a contribution of 7. 5% of the employees' emoluments.
TECHNOLOGICAL FACTOR
Technology is continually changing, which does mean that businesses must change in order to keep up. This has foster fast business expansion and development in the agro-industry.
In 2008, world biofuel development will was 1. 35 barrels each day (bpd and
by 2013, they have increased to 1. 95 million bpd (MPOB, 2008).
However, over the range of systems, food technology is one of the most dynamic systems in the present day market. Presco has taken care of immediately technical advancements in this areas. For example, Presco intends to harness methane gas made by decomposition for its sludge to utilize the gas because of its boilers. It includes initiated steps towards this projects and intends to complete the same by early on 2014. Presco believes it can effectively source its complete energy requirement from waste transformation Thus, reducing its dependency on fossil fuels.
Presco works together with governments and environmental organisations to produce products that protect biodiversity and preserve soil and water. Products that remove weeds without farmers ploughing the domains help to reduce soil erosion. This causes improved ground quality and really helps to retain water. It also improves biodiversity, which contributes to increasing bird amounts.
Presco is convinced in environmentally friendly and sustainable creation. All factory misuse of the engine oil mills is recycled in to the plantation for used as gasoline to generate process vapor and electricity green. As a member of the Siat Group of Companies Actively Involved in Presco is a joint research program with CIRAD. This research program targets developing conditions for lasting and Environmentally liable plantation development and management.
Increase Production
By Increasing the planted area and yield per unit area improvise found using modern planting materials, total creation will increases. Presco plans to seed and replant a complete of 2000 hectares between 2011 and 2013 at Obaretin and Cowan Estates. Presco is constantly working to Acquire and boosts its land bank or investment company and is on verge of a major acquisition.
Internal factors using swot analysis
Luecke (2005) in his elaboration of SWOT evaluation in the 'Harvard Business
Essentials' series, elaborates that goals supplement strategy, and this goals cannot stand in isolation and must sketch after insights from the affects of
the external environment and their organization's inside capabilities.
SWOT analysis looks at internal forces that are essentially controllable by top management and therefore, regarding to Seetharaman (1993) we're able to identify makes by first requesting whether it is an internal factor if so we check out ask whether it is a favourable (power) or unfavourable (weakness); if the answer is 'no' then the push is either an opportunity or a danger.
The SWOT examination which is carried out in the following manner based upon the conducted research are as follows, based on the content evaluation of documents regarding Presco PLC, the strengths of the business are identified. The weaknesses of Presco is determined. Once the talents and weaknesses of Presco have been set up, the next step is to identify the surroundings where the corporation operates and what opportunities can the corporation exploit to maintain its competitiveness. Finally, the dangers facing the business are identified to ensure that Presco could mollify the dangers which could influence its competitiveness and sustainability.
Presco businesses course across the palm engine oil industry, from the
downstream sector to the upstream sector. Presco's agronomy and
analytical services include plantation estates, the palm olive oil mills produce
crude palm oil, hand kernel and biofuel and its own refineries and fractionation and kernel crushing plant life are made up of oleo-chemical crops and specialty extra fat plants One of the Most Efficient Palm Engine oil Producers.
Presco is one of the very most efficient palm essential oil producers, . This durability is due to Presco's perception that the most efficient business model can be a very effective environmental model. Based on this model, Presco strategizes to maximize outputs of their plantations and factories while lessening the inputs required using a competent and effective plantation management program. The efficient use of land
translates into lower fertilizer, pesticide and energy utilization as well as
benefits for the surroundings.
In its total annual reports, Presco remarks that its superior performance in terms
of oil yield and creation cost per hectare set alongside the industry's
average is partially attributable to its improvements in agronomy sciences.
Presco's strong advocate of development of agro-science and technology to boost crop and essential oil yields to meet increasing global needs is evidenced from the
production. As its modest contribution towards obtaining higher yield per
hectare, Siat s. a. (the parent company of Presco) in March 2007,
signed a Research Support Agreement for high quality engine oil palm seed
selection in Africa with INRAB (a research institute in Republic of
Benin) and CIRAD (research institute in France). The objective of
this agreement is to create an experimental stop in Presco. The
trials, scheduled to perform over an interval of 5 years, from 2010 to 2014
is designed to achieve the next objectives:
a. to select high-yielding fusarium-resistant crosses
b. to assess the connections between Genotype and Environment
(G-E)
c. to study the relationship between Genotype and Mineral
Nutrition( G-E)
Champion of Environmental Friendly Practices
Environmentally friendly methods are taken significantly by Presco Plc. Content examination of its annual reports shows examples of its efforts to promote environmentally friendly tactics. Some examples include its practice of going back empty super fruit bunches and palm fronds to the land. This reduces the necessity for fertilizer by 40-50% and compost to enrich the ground naturally and reduce erosion
caused by rainwater. Another practice is the extensive use of kernel shells
and fibre to provide alternative energy to produce the vapor needed to
extract the palm olive oil from the fruit. Nearly 98 percent of Presco's fuel
consumption for steam era at its mills is from these renewable
Resources.
Some key initiatives IOI uses to promote sustainable oil palm cultivation
include (1) zero using and biomass preservation, (2) included pest
management, (3) garden soil management and energy saving initiatives and
(4) RSPO Qualifications for Oil Palm Estates (Annual Report 2008).
CSR-Oriented Organization
Presco places greatest importance on corporate public responsibility (CSR).
In simple fact, the Presco's Corporate and business Public Responsibility (CSR) principle
is encoded in its 'Perspective Presco (Annual Record 2011). The emphasis of
this process is to achieve commercial success in a well-balanced,
responsible manner by dealing with the interests of all stakeholders. The
key CSR initiatives currently carried out by Presco involve maintaining
good business techniques and lasting cultivation, supporting
educational activities, caring for the community, improving employee
welfare and conserving the environment and animals.
Supporting and promoting education is an important area of Presco's CSR
initiatives. Presco provides scholarships, provides Young Achievers' Award to spectacular and bright students to inspire students to excel in both educational and coco- curriculum activities, and has students adoption program which
provides financial assist with help underprivileged children, sponsors
schools under its Institution Adoption Programmes.
The guiding ideas for Presco's CSR effort in regards to the
environment are to market conservation specifically energy and other
resources and improve on environmental health care in their business
operations for example bettering effluence treatment and waste
management.
Weaknesses
Financial Vulnerability
One of the few weaknesses of Presco is its financial vulnerability. As it
is at the mercy of face hazards such as interest risk, price fluctuation risk, credit risk, as well as liquidity and cashflow risk (source: Total annual Record 2008). Although Presco functions within an established risk management platform with evidently defined
guidelines with are approved by the table, it still encounters financial
vulnerability due to the highly unpredictable characteristics of business.
Given the existing global monetary situational position as a top-tier palm oil producer, productive operations, good usage of capital and loan provider market segments and the management's strong background in taking care of the palm olive oil business through the industry cycles.
Opportunities
Growing Palm Oil Market Globally
For Presco, the growing palm petrol market in European countries has offered
opportunities for extension. (source: annual article 2008). Thus, Presco undertook
a job to increase its refinery capacity through an enlargement of a
palm-oil storage reservoir plant in the Benin and the job is likely to be completed in past due 2013. This increased refinery capacity provides opportunities to serve Presco's global marketplaces better.
Threats
Lack of Land Lender for Expansion
In the oil palm industry, having less land loan provider is a major threat to all or any oil
palm planters including Presco. As almost all of the delineated land for
agriculture is almost consumed, Presco will need to outsource more land from other
neighboring Countries. The issue of scarcity of land
bank is further frustrated by NGOs high propensity to web page link agricultural
activities with deforestation (Yusof, 2007). Apart from the physical lack
of land bank or investment company, oil palm planters including Presco need to constantly address
the arguments against starting new oil palm plantations.
Unfavourable legislation and federal policies
Unfavourable legislation and government policies are frequent threats
to any industry including the oil hand industry. A good example of this is the
Windfall Duty. As the price tag on crude palm oil soars, oil hand planters
became more concerned about the higher windfall tax which they
have to cover.
Diagnosis of Presco Plc
Although, Presco is one of the very most efficient oil palm company in Nigeria.
It's management encounters the intimidating task of steering the organization amidst uncertain monetary climate as a result of the
meltdown of the US economy and the effects it is wearing other economies.
Presco's exemplary management of its stakeholders and its sensitivity
towards their importance and needs gives Presco the added advantage in
operations and improves its capability to sustain its competitiveness. In other
words good marriage with stakeholders increases the efficiency of an
organization.
Presco's operational power is reinforced by its human resources, good
agricultural tactics the technologies it uses, its proper management of
R&D, its exemplary leadership style, its focus on CSR and good
corporate governance.
The appearing biofuel market and progress in demand for palm petrol and other
downstream products in a variety of regions are strong opportunities for
growth for Presco to go after. Nonetheless, the biofuel industry and the close
link of its viability to the price tag on crude olive oil and other petrol and fats also have a
downside to it.
To conclude, Presco is in a solid position to maintain its position in the oil
palm industry but must extend more treatment to mitigate the effects of its ability to properly manage its opportunities decisions.
Conclusion
In order for any business to expand, it's important that it knows the environment in which it performs. SWOT and PESTEL analysis is a useful tool for just about any business desperate to understand its inside and exterior environment. This allows it to devise programs and ways of tackle the problems it faces. It also helps it target its medical research and technological development to increase crop end result,
improve yield to permit farmers, to provide the increased demand the earth needs
create biofuels to displace existing fuels and finally, to lessen society's impact on biodiversity.
