How reform, restructuring saved Ondo Oil Palm firm—Adewole
How have you fared in the last one-year you came on board?
IT has been an interesting experience for me in the last one year. It has been a mixed bag of blessing because a lot of changes have been put in place since we arrived in 2018.
To the glory of God, we have been able to steer the ship of the company in the right direction despite all the challenges. We met a lot of resistance; the Board did not have an understanding of the depth of problems we faced when we got there.
The board did not know that the problems were that enormous, of course, with the board behind us, management was able to weather the storm and the company was rescued from the path of collapse and mismanagement.
Three months into our engagement, there was a total breakdown of law and order in the company. The workers became destructive, there were several lockouts, aimed at derailing or truncating the restructuring we were trying to put in place. But we were resilient and focused and with the support of government, we were able to check the violence.
Today, we have taken full control of the company, it is on an accelerated path to recovery and we believe in the options that are opened to us in terms of key management decisions that have been taken, as far as getting that place right.
The company through the board, is in the second phase of the restructuring process and that is the completion of the core investment programme, which is to attract the appropriate capital into the company, injection of new capital to change the face of the company because we are a production and processing company and we are going to add the third leg of our value-chain, which is the refining of our products into various products that will bring true value to the company. That is where we are today.
What were the major decisions taken to put the company on the path of recovery?
Our first decision-the cashless policy, was resisted with passion. It is tied to the integrity of the transactions of the company. That policy was a direct opposite of what was going on when we got there. And it made it practically impossible to account for how much the company was generating.
So, it is important that the best practices be adopted in everything we do now, including true financial prudence. The board has laid down policies for every action to be taken in the company. So, you follow the rules, follow the board policies, and we implement only programmes that have been clearly highlighted. What is the content of this cashless policy?
The cashless policy entails revenue generation, revenue assurance, total capturing of sales transactions. We also subject ourselves to strict internal controls that promote transparency, and we also try to address compliance issues with regulatory bodies. It is important for us to know that as a public company, it is a case of trust for shareholders who don’t even know or see what we do on a daily basis and therefore we are well coordinated in our transactions.
One of the practices in the past was that workers were paid in cash, so also customers.
What is the situation now with this new policy?
Without any doubt, since April last year, the company has not handled cash; we don’t do any transaction in cash. There are records of all receivables and payables through the bank.
You will recall that in December 2018, the company shut down and all workers disengaged because they did not want to buy into the new vision. You know that two can only work if they agree. Since we could not have any meeting point, all entreaties to them to see the company in a new way were thwarted. The company had no other option than to shut down.
Today, we are starting afresh, we have new employees, new work environment, new conditions of service, well above industry average and it’s a place you want to be now.
We are changing the entire face of the company. The company has a well-structured training programme for the staff.
The company has equipment and tools for workers to work with and our major labour force that used to be direct workers of the company are no longer there, the services have been outsourced to competent hands, harvest contractors.
We have even engaged three tiers of different levels of security architecture, we have private security guards in the plantation, we have government’s constituted task force providing armed security personnel, DSS working to monitor things in the plantations, so that we can have a hold on our operations under a secure and safe environment.
So, all those have been put in place and functioning and I believe that gradually the company will begin to function in full capacity.
One of the problems you faced that last year was that of customers who paid money for products but were not supplied and their deposits were not refund. What is the situation now?
It was a very sad story when we got there last year. We were indebted to so many creditors, either financial institutions, customers that bought our products, there were some judgment debts as well.
All these three categories of creditors have been fully taken care of, some were fully paid off, some restructured and we have kept to our agreement. Some of the judgment debts have been fully paid.
For those who deposited for products that were not paid by cash we have given them all their products up till 2018. We have also ensured that nobody deposited money for products and does not get the products.
You spoke about capital injection, but does the company have the required raw materials to survive?
One of the greatest assets that we have at OOPC is that it does not have to source for raw materials. We produce the raw materials that will be used for processing. So, the critical stage we are now is to ensure that we can increase our Fresh Fruit Bunches (F.F.B) recovery, which currently is about N25, 000 from our various plantations, which will required a lot of effort.
We are deforesting now so that we can access the greater percentage of our palms because they have been neglected over the years. Serious work is going on to achieve that, we are also looking at other stakeholders, the landowners that had not been paid over the years (about 30 years).
We have worked out the repayment plan with them and we started payment this month and we have structured it in such a way that the totality of what is due to them in 30 years up till 2019 will be paid before December.
Still on capital injection, so far, have you been having signals from the public or the capital market?
A lot of corporate organisations have shown interest, major palm producing companies across the world, from Malaysia, Brazil, Belgium have indicated their interest and we believe that the process will be a transparent one, the public will know in due course.
Illegal harvesters had a field day when the plantations were abandoned for several years. What is the situation today?
The assets do not belong to illegal harvesters; those assets are key assets of the Oil Palm firm and together with the state government.
The state government set up a task force comprising all the security apparatus in the state with full force even though it was at that point we realised that illegal harvesters also carry firearms.
They fought and injured some of the security personnel but of course they cannot match the superior weapons of the state. So, they have been fully subdued, and that is why we are able to retrieve the plantations.
The company has set up a three level security architecture that ensures a 24-hour security surveillance in all the plantations. Other developments are going on through the use of drones and other technologies to ensure regular patrols of the plantations. We have a number of illegal harvesters that have been arrested and facing prosecution.
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