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LONDON (Alliance News) - Dekeloil Public Ltd on Wednesday said it is making progress towards becoming a multi-project agriculture company with cashew processing project in Cote d'Ivoire under development.
Dekeloil currently has one producing Ayenouan palm oil project.
The West African focused agricultural company saw a drop in crude palm oil production volumes in the first half of 2018 to 22,242 tonnes from 26,947 tonnes produced in the same period in 2017.
Palm oil prices fell to lows of USD550 a tonne, resulting in revenue from Ayenouan of EUR14.1 million, down from EUR19.6 million a year ago.
Dekeloil explained that a poor high season at Ayenouan led to increased competition to secure feedstock for processing and downward pressure on gross margins.
In the third quarter, however, crude palm oil production improved by 14% year-on-year to 5,371 tonnes.
"The quick turnaround in performance serves to highlight how trading conditions for agriculture companies can and do change over short timeframes," explained Chief Executive Youval Rasin.
Back in June, Dekeloil had agreed to acquire a 58.5% stake in Pearlside Holdings Ltd, which owns cashew processing project at Tiebissou. The project is currently under development.
"Becoming a multi-commodity company is a key objective for DekelOil, as it not only enables us to scale up our revenues and profitability, but also to significantly diversify our end markets," said Rasin.
Rasin added: "Being an unrelated commodity to palm oil, international cashew prices have their own set of market dynamics and drivers. With global consumption forecast to continue growing for the foreseeable future, the underlying market backdrop for cashews is supportive and we are therefore keen to gain exposure to it."
Dekeloil shares were trading 1.4% lower on Wednesday at 3.55 pence each.
