GVL reports challenges, loss in 2022
Monrovia – Oil palm developer Golden Veroleum (Liberia) Inc. (GVL) says it has experienced significant losses, driven mainly by high cost of materials imported into the country. The company laments that ailing economy and global price increases pose serious challenges to its operations in Liberia.
GVL signed a concession agreement with the Government of Liberia to develop 220,000 hectares of land with oil palm in Southeastern Liberia, but the company says it has only developed a little over 19,000 hectares since 2010 due to multiple challenges.
The company notes thru a release the global economic situation, prolonged COVID19 related restrictions and the conflict in Ukraine continue to pose significant challenges to its operations, mainly as a result of significant price increases in fuel and other supplies.
According to the release, GVL imports fertilizer, lubricants and other equipment into Liberia to support its operations. Besides, Management spent over US$5 million in 2021 and more than US$12 million in 2022 for essentially the same quantity of materials, constituting a 64% increase in expenditure.
Contributing to the operational difficulties, it adds that the road from Buchanan, Grand Bassa County towards the ITI Bridge has been severely damaged during the six months’ rainy season.
The release continues that resulting delay in transporting goods and other materials from Monrovia to the operation sites forces GVL to find transportation alternatives, and that the company and the Ministry of Public Works are currently rehabilitating 272 kilometers of roads from Sinoe through Grand Kru to Maryland County.
The project, which has been ongoing for the past three years, is being fully supported and funded by the Government of Liberia through GVL taxes.
Crude Palm Oil (CPO) is being transferred from the Tarjuowon Mill to the Bulking Station at the Greenville Port using tankers, but when the roads and wooden bridges are severely damaged between mill and bulking, the whole supply chain is completely disrupted, the mill stops processing and the estates slows down the harvesting activities. In addition, trucks get damaged and have frequent breakdowns.
“GVL’s operations depends highly on fuel supply. Poor inland transportation certainly disrupts fuel supply resulting to higher logistics cost and the inability to operate at efficient capacity due to high fixed overhead cost during the six months’ rainy season.”
Management also points to poor port infrastructure particularly, at Harper Port affects shipping activities, noting that during the rainy season, international vessels hesitate to berth due to rough waves along the pier, although GVL in collaboration with National Port Authority has invested to install Pneumatic Fenders to prevent vessels hitting berthing structures.
However, the release says despite these challenges, GVL continues to sustain its operations in Liberia, expressing optimism that factors that directly impact and/or undermine its operations could be addressed and mitigated with joint efforts from government and the company in the new year. GVL says it expects increases in production and improvement in operational efficiency by applying agronomy best practices. Press release