Second Off-take Agreement to Supply Crude Palm Oil

RNS Number : 6130H

Dekeloil Public Limited

21 May 2014

 



DekelOil Public Limited / Index: AIM / Epic: DKL / Sector: Food Producers

21 May 2014

DekelOil Public Limited ('DekelOil' or 'the Company')

Second Off-take Agreement to Supply Crude Palm Oil from 60 t/hr extraction Mill in Côte d'Ivoire

DekelOil Public Limited, operator and 51% owner of an established vertically integrated palm oil project in Côte d'Ivoire, is pleased to announce the commencement of sales of Crude Palm Oil ('CPO') produced from its 60 t/hr extraction Mill ('the Mill') to Adam-Afrique, a local refining company in the Côte d'Ivoire.  This forms part of a recently executed off-take agreement ('the Agreement'), the second DekelOil has secured, and is in line with its strategy to diversify its customer base, commercialise its assets and in the process build a leading West African palm oil company.   

Under the terms of the Agreement, DekelOil will supply Adam-Afrique with a minimum of 5,000 metric tonnes of CPO per annum up to a maximum of 10,000 metric tonnes.  The CPO must satisfy the following quality thresholds: no higher than 5% fatty acids; maximum 0.5% moisture and impurities content; 39 degrees Celsius melting point and an iodine value of 50-55.  In return for the CPO, DekelOil will receive the official AIPH price, which is similar to the CIF Rotterdam price.  The Agreement covers an initial period to 31 December 2016, at which point it will be renewed for consecutive three year periods unless a written notice of termination is provided by either DekelOil or Adam-Afrique three months prior to the end of the relevant three year period.  By selling the CPO locally, the Company will benefit from reduced transportation, insurance and marketing costs. 

Dekeloil Executive Director Lincoln Moore said, "Combined with our off-take agreement with local refiner SAR announced earlier this year, we have now secured buyers for our 2014 production.  Following operating profitability being achieved during March 2014, the Mill's first full month of operations, we have as anticipated increased production volumes in April and are maintaining our focus on increasing revenues."

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For further information please visit the Company's website www.dekeloil.com or contact:

Youval Rasin	DekelOil Public Limited	Tel: [phone]
Shai Kol	DekelOil Public Limited	Tel: [phone]
Lincoln Moore	DekelOil Public Limited	Tel: [phone]
Christian Dennis Jeremy King Roland Cornish Rosalind Hill Abrahams Elisabeth Cowell	Optiva Securities Limited Optiva Securities Limited Beaumont Cornish Limited Beaumont Cornish Limited St Brides Media & Finance Ltd	Tel: [phone] Tel: [phone] Tel: [phone] Tel: [phone] Tel: [phone]
Frank Buhagiar	St Brides Media & Finance Ltd	Tel: [phone]

Notes:

DekelOil Public Limited is a low cost producer of palm oil in West Africa, which it is focused on rapidly expanding.  To this end, it has a 51% interest in one of the largest oil processing mills ('the Mill') based in Côte d'Ivoire, which has a capacity of 70,000 tons of Crude Palm Oil ('CPO').  Feedstock for the Mill comes from 27,000 hectares of mature palm oil plantations that have been secured under long term contracts with smallholders, however it also has nearly 1,900 hectares of its own plantations.  Furthermore, it has a world-class nursery with a 1 million seedlings a year capacity.  Currently, it has one off-take agreement to deliver 24,000 tonnes of CPO per annum to a local refiner and is in discussions with other potential partners. 

 

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