Unilever’s alternative to palm oil
Sarah Murray, Financial Times, September 25 2008
“Look, here’s another one,” says Samuel Henneh, grinning broadly as he points to a small plant with robust green leaves growing beneath a cocoa bush in the demonstration plot of a nursery in the Ashanti region of Ghana.
Mr Henneh, operations manager at Novel Development Ghana, has good reason to smile. After six long years of research, scientists and farmers working with the Novella Africa partnership think they have found a way of accelerating dramatically the growth of the allenblackia tree – whose seeds can take up to two years to germinate and, growing in the wild, only fruits after 10 years.
Compressing this cycle is crucial, for all the partners in Novella Africa. This public-private initiative, brings together Unilever, the Anglo-Dutch consumer products group, and a range of Ghana-based social and environmental institutions and non-governmental organisations with one aim – to develop the allenblackia tree into a valuable new crop.
For Unilever, the allenblackia seeds could become a supplementary source of oil that can be used in a range of its products, from soaps to spreads, replacing palm oil, supplies of which are not adequate for the company in Ghana.
From a commercial standpoint, oil from the seeds has the added advantage of being stable at room temperature, unlike palm oil. This means the oil does not need to be chemically processed, making it cheaper and giving it better environmental and health credentials. “And for soaps, allanblackia may producer a harder, and thus more economical soap bars, than can now be done with palm oil,” says Harrie Hendrickx, Unilever’s project manager for the scheme.
Development specialists believe the tree could provide a potential source of income, supplementing revenue from other crops such as cocoa, plantains, pepper and cassava. “It’s labour extensive so it doesn’t require much attention,” says Peter de Haan, country director for SNV Ghana, part of the Dutch development organisation. “It has a deep rooting system so it doesn’t compete with cocoa, which takes nutrients from a different level and it’s nutrient efficient. So it’s a high value crop that doesn’t require extra work.”
The timing of its harvest fits well with other crops. The harvesting of cocoa, the staple crop for farmers in the regions in which allenblackia is being developed, ends in December while allenblackia starts fruiting in January and goes through to April. Moreover, cocoa provides shade for the young allenblackia plants. When grown to a full tree, the relationship reverses.
For now, the scale of production is small. In 2007, 650 tonnes of seeds were produced, with about 15,000 farmers involved in the project. However, the team has big plans. In 2009, the project will be extended from its current operations in Ghana and Tanzania to Nigeria and, soon after, to Liberia. By 2010, it is expected that about 20,000 will be participating and by 2015 that number could exceed 100,000.
The additional revenue for these farmers looks small at about $50 a year. However, eventually, this should rise to about $1,000 a year – no small sum for subsistence farmers living on about $1 a day.
“We saw from the beginning that there were great options to develop this new product in a sustainable way, so that we can include rural communities and help them to develop themselves and earn an income,” says Mr Hendrickx.
The demonstration plots have proved important in proving to farmers that the trees can constitute a viable crop. However, trust has also played an important role in persuading farmers to take an interest – particularly after an earlier project, in which farmers were encouraged to cultivate sunflower plants on a large scale. The promoters of that project failed to buy the fruit after harvest and the farmers lost their investment.
For this reason the commitment of Unilever to buy the seeds is an essential ingredient in the success of the allenblackia project, creating a market for the crop. Unilever will guarantee a minimum price per tonne for the oil, after which it will have to meet price rises.
“If you know the interest of the company, the private sector can be very reliable partners,” says Mr de Haan. “Rather than organisations that are subject to policy changes.”
Unilever believes that the range of uses for the oil is such that production limits, rather than market demand, will be the only obstacle to growth of the industry. And farmers will receive a strong signal of Unilever’s intention this autumn when, for the first time, the company will use allenblackia oil in its Flora margarine.
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