Operations

Goldtree’s operations are based on the nucleus/outgrower business model. The main business components are:

Nucleus plantation

The business has its own nucleus plantation, which was initially planted with assistance from the World Bank in the 1960s.

Goldtree has an irrigated seedling nursery for the development of high-quality, improved hybrid oil palm seedlings. It has the capacity to supply the Goldtree plantation as well as the outgrowers.

Palm oil mill

Currently, the mill has the capacity to process 20 tonnes of fresh fruit bunches per hour and the potential (with a capacity upgrade) to process 30 tonnes per hour in the future. The main product from the milling operation is crude palm oil (CPO).

The mill is equipped with a palm kernel crushing plant to produce crude palm kernel oil (CPKO)

There are also on-site storage facilities to store the finished products and an on-site workshop that deals with all maintenance and repairs.

Packaging plant

Crude palm oil and crude palm kernel oil are packaged on-site into 20-metric tonne flexitanks, 200-litre drums, 20-litre containers and small consumer sachets, depending on customer requirements.

Outgrower operations

Goldtree supports more than 7,500 outgrowers who own and manage their own mature oil palms. The operation is run in collaboration with the Oil Palm Growers Association, a community-based farmers’ association that represents Goldtree’s outgrower suppliers, who supply fresh fruit bunches (FFB) to the Company.

Goldtree Replanting Programme

Sierra Leone, in West Africa, is still recovering after a long civil war that ended in 2002. The country has since undergone substantial economic growth and the risk of a return to civil unrest has virtually disappeared. Nevertheless, Sierra Leone remains one of the poorest countries in the world (country 161 out of 185 by World Bank ranking). The economic situation was exacerbated in 2014, as the country faced a serious outbreak of the Ebola Virus Disease (EVD).

Palm oil is a staple food item in Sierra Leone. The equatorial climate is ideal for cultivating oil palm, and according to Sierra Leone household data, an estimated 185,000 small farmers own palms. It is used daily in traditional cooking and provides critical energy in the national diet. However, despite 240,000 hectares of oil palm in the country, Sierra Leone still needs to import edible oils in order to meet local demand.

The case for replanting

The deficit in locally produced palm oil could be drastically reduced through a well-managed replanting programme. The majority of palms standing today were planted in the 1980s, due to their age, they yield less than two tonnes per hectare. If these palms were to be replanted, the yield could easily be increased five-fold. This poor productivity not only impacts local oil production, but also limits the income generated by farmers from their plantations.

The Company buys more than 90% of its fruit from the smallholder farmers that live within a 40km radius of the mill. For Goldtree, the future of the business is inextricably linked to its smallholder suppliers. For this reason, the Company intends to support smallholders in the mill catchment area to replant their old palms and to replace them with good-quality, high-yielding seedlings.

Overview of proposed programme

Over the next five years, Goldtree proposes to kick-start the regeneration of smallholder oil palms in Sierra Leone by facilitating the replanting of 1,000 hectares of old palms owned by small farmers within a 40 km radius of its mill. One thousand hectares of palms, yielding a modest 10 tonnes per hectare when mature, will produce over 200,000 tonnes of fresh fruit over their economic life. This fruit would generate an estimated income of US$ 15 million for small farmers at current prices and, after processing, would result in 40,000 tonnes of additional palm oil for the local market.

This first phase of replanting 1,000 hectares commenced in 2015 and will be completed by 2017. The replanting for each individual farmer will be phased, in order to minimise negative impact on household incomes. The environmental impact of the programme will be mitigated by complying with the Roundtable for Sustainable Palm Oil (RSPO) best practices, which specifically prohibit deforestation. Selection criteria for programme participants will be finalised through detailed discussions with stakeholders and will include the size and profile of each farmer’s plantation, historic sales of fruit to the mill and the farmer’s commitment to implementing programme-recommended best practices.

Funding required

Goldtree is seeking funding partners for this initiative. This is a unique opportunity to work hand-in-hand with the private sector to rebuild the livelihoods of small rural farmers in Sierra Leone and enhance food security in this Ebola-affected area.

Please contact Sarah Marchand, Programme Director – AAF TAF at goldtreereplant@aaftaf.org for more information, or to schedule a discussion.