Cheap imported palm oil killing CDC, PAMOL

The dire situation in which two very important local agro-industrial companies find themselves today could simply be likened to the case of inviting one for a swimming contest and providing him with shoes made of concrete.

The Cameroon Development Corporation, CDC, and PAMOL Plantations employ close to 30,000 (thirty thousand) workers between them. Hundreds of thousands of direct and extended family members depend on these workers for their very survival. But CDC and PAMOL stand the potential risk of folding up if the continuous importation of cheap palm oil from countries like Malaysia and Indonesia is not checked.

All of this could easily be blamed on a lopsided policy that has stagnated the growth of the sector in the country over the years. Barely a few decades ago, Cameroon was on the big league of oil palm producers in the world. A country like Malaysia is known to have obtained improved oil palm seedlings from Cameroon. But even as late starters in the sector, Malaysia and other better managed economies now call the shots in oil palm production and exportation, while Cameroon can barely meet up with local needs.

The snag however is that despite this, CDC and PAMOL are stuck with both their inadequate produce and the inability to break even financially, due largely to the fact of a practice that makes it possible for greedy business interests to saturate the local market with imported oil palm produce from Asia and elsewhere. As we write, CDC and PAMOL storage tanks are bursting at the seams with unsold palm oil, owing to an importation policy that fails to protect national interests.

These companies are expected to be in tune with labour imperatives and other social legislation demands, as well as handle social responsibility and political pressures. Consequently, CDC and PAMOL are finding it difficult to increase the prices of their products to meet up with the constraints or better still, exigencies of production. And even if they had to, market forces would still elbow them out of the scene if the rampant importation of cheap palm oil is not regulated.

In the case of PAMOL, a very appalling road infrastructure has meant the inability for their palm oil and other by-products to be transported to the markets, especially during the rains. Consequently, even local buyers that have paid up are unable to take delivery and so are forced to resort to dealing with the Malaysian and Indonesian stuff for realistic economic reasons.

Palm oil processing mills are in the main, obsolete; fruit bunches are left to rot in the plantations. The same applies to the CDC to some extent, as only the mill at Illoani in Ndian Division is modern. The situation is so bad that these companies find it difficult to import spare parts for machines that are at best, anachronistic, hence, the resort to crudely fabricating such parts locally. CDC on the other hand still has a “hesitant” privatization process practically bogging it down. This has meant the inability of the second highest employer after the state to procure bank loans for needed expansion.

Despite all of the hiccups, the two giants with clay feet are expected to contribute very high amounts to the National Social Insurance scheme as well as pay other exorbitant taxes to the state. Unlike SOCAPALM that is a totally private entity, CDC and PAMOL are bogged down by political demands. Contracts are negotiated and executed based on patronage of sorts; the kind of patronage that compromises strict business-like approach to running an enterprise. In a sense, Governmental interference is omnipresent and dictates the somnolent tendency of work that is characteristic of the public service.

The way out?

If Government truly intends to save these companies and truly and effectively put back Cameroon in the comity of palm oil producing and exporting nations on the world stage, it suffices for it to pump in the needed cash incentives, place credible managers at the helm and give them a free hand to function as a business as opposed to a political club or charity.

This, of course, would also entail eliminating such patronages as enable greedy business operators to import cheap palm oil and other derivative products into the country to unfairly compete with local effort.