In February this year, Michael Frayne launched an initial public offering of Equatorial Palm Oil (LON:PAL) on the Alternative Investment Market – one of the few IPOs that got any traction in what were hugely uncertain conditions early in 2010. With £6.5m netted from the share placing and a further £5m from investors in India, the company’s executive chairman is now eyeing plans to kick off palm oil production by the end of this year. With a bold play in the West African state of Liberia, he is hoping to take a first-mover advantage from the company’s substantial land package, strong relationship with the government and responsible attitude to the environmental and social issues that have tripped up other palm oil players.
Equatorial Palm Oil currently has a land holding covering around 169,000 hectares in conditions ideal for growing oil palms. Over the next ten years it wants to develop at least 50,000 hectares in order to produce around 250,000 tonnes of crude palm oil every year. To start with, Frayne and his team are focusing on re-establishing a 3,000 hectare area at Palm Bay, where a plant and processing facility is due to be set up shortly. They are aiming to capitalise on huge African and international demand for the oil, which eventually finds its way into the likes of bread, chocolate and chewing gum, with 43 of the top 100 food brands in UK containing palm oil. In London, the company’s peers include New Britain Palm Oil (LON:NBPO), Anglo-Eastern Plantations (LON:AEP), M.P.evans Group (LON:MPE) and Asian Plantations (LON:PALM). Michael Frayne spoke to Stockopedia News about his plans for the development of Equatorial Palm Oil and the opportunities he sees in the market.
Michael, how did you get involved in Equatorial Palm Oil and how did you secure this land holding in Liberia?
We actually started life as an investment company looking for resource development assets. We were looking at mining, oil & gas and agricultural and we liked the palm oil sector because it is the biggest vegetable oil in the world. It is a good market - you only have to look at the huge number of food products and other things that have got palm oil in them. The second thing was that, a few years ago, you…
