21st May 2014 10:56
LONDON (Alliance News) - Crude palm oil extractor DekelOil Public Ltd Wednesday said it had secured a second contract to supply crude palm oil from its extraction mill in the Ivory Coast and had already started supplying oil to its new customer, meaning it has now secured buyers for its entire 2014 production.
The company currently supplies Societe Africaine de Raffinerie with oil from its 60 tonnes an hour mill, but has now secured local refining company Adam-Afrique as its second customer.
Under the terms of the new deal, which will initially run to the end of 2016, DekelOil will supply Adam-Afrique with a minimum of 5,000 metric tonnes of crude palm oil a year, up to a maximum of 10,000 tonnes. It will be paid the official AIPH price, which is similar to the CIF Rotterdam benchmark price.
The AIPH is the Inter-professional Association of Oil-Palm Industry, an Ivory Coast palm oil industry representative body that sets selling prices for palm fruit clusters and raw palm oil "according to markets".
The three-year deal will be renewed for consecutive three-year periods unless either party terminates the deal.
"Combined with our off-take agreement with local refiner SAR announced earlier this year, we have now secured buyers for our 2014 production. Following operating profitability being achieved during March 2014, the mill's first full month of operations, we have as anticipated increased production volumes in April and are maintaining our focus on increasing revenues," Dekeloil Executive Director Lincoln Moore said in a statement.
Under the deal it secured in January, DekelOil will supply Societe Africaine de Raffinerie with 24,000 tonnes of palm oil as feedstock for a palm oil refinery that the refiner is building in Abidjan.
Dekeloil Public shares were down 9.7% at 1.40 pence Wednesday, one of the biggest declines on AIM.
By Steve McGrath; [email protected]; @stevemcgrath1
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