Presco accelerates African expansion with $46.7m Saro Oil Palm acquisition and N250bn rights issue, targeting resilience, growth, and currency diversification.
Presco Plc, one of Nigeria’s leading agro-industrial companies, has unveiled a series of bold moves designed to reinforce its ambition of becoming a dominant force in Africa’s palm oil sector. In a recent disclosure to the Nigerian Exchange (NGX), the company confirmed a $46.7 million acquisition deal coupled with a N250 billion rights issue. These steps form part of a wider growth blueprint aimed at strengthening its market resilience, diversifying income streams, and building a multinational business that can withstand Nigeria’s volatile economic climate.
Central to this expansion plan is Presco’s agreement to acquire Saro Oil Palm (SOP), a relatively young agro-industrial player incorporated in 2019. The acquisition, valued at $46.7 million, adds a significant land bank of over 14,000 hectares to Presco’s portfolio. Currently, SOP has 5,000 hectares under cultivation, with plans to expand to 8,000 hectares by the end of 2025. While SOP is not expected to generate profits until 2027, its roadmap includes Fresh Fruit Bunch (FFB) harvesting starting in 2026 with a production target of 28,000 metric tonnes, alongside the development of two new palm oil milling plants.
This new acquisition builds upon Presco’s 2024 milestone purchase of the Ghana Oil Palm Development Company (GOPDC) for $124.92 million, which marked the company’s first major cross-border expansion. Following both deals, Presco’s total plantation size will increase by 37 percent—from 43,547 hectares to 59,760 hectares. The company’s board describes these acquisitions as transformational, positioning Presco as a key African conglomerate with a larger market share and broader customer base.
To finance its expansion, Presco has launched a N250 billion rights issue targeting existing shareholders. The funds raised will be channeled toward four main objectives: refinancing existing debts, completing payment obligations for the GOPDC acquisition, covering the SOP acquisition cost, and creating a buffer for future expansion projects.
A unique element of the SOP transaction is its status as a related-party acquisition, given that both SOP and Presco are subsidiaries of SIAT SA, a Belgian-based agro-industrial group. This common ownership is expected to simplify the transaction process and highlights a deliberate consolidation strategy under the SIAT umbrella, further boosting regional competitiveness.
Presco’s rationale extends beyond mere expansion. A key driver is currency diversification. With nearly all its revenue historically earned in Nigerian naira, Presco faced high exposure to exchange rate volatility. The GOPDC acquisition, however, provides a hedge, as the Ghanaian operation earns around 41 percent of its revenue in US dollars and euros. This foreign currency inflow reduces Presco’s financial risks and enhances stability.
The enlarged Presco group is also expected to benefit from economies of scale. By pooling land, processing capacity, and management expertise, the company can cut costs, increase efficiency, and improve supply chain performance. This integration strengthens Presco’s position in both local and regional markets while also making it more appealing to investors. The company’s strong 2024 performance—where revenue more than doubled to N207.5 billion, aided by the partial inclusion of GOPDC—reinforces confidence in its strategy.
Overall, Presco’s latest moves reflect a broader ambition: to build a multinational palm oil powerhouse, resilient against domestic risks and competitive on the continental stage.
