RESTRICTED

Report No. PA-89a

This report is for Offhial use onlY by the Bank Group and specifically authorized oranizationsor personL It ny not be publshed, quotd or cited without Dnk Group authorization. TheBank Group does not accept responbllity for the acuracy or complbtness of the report.

INTERNATIONAL BANK FOR RECONSTRUCION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

APPRAISAL OF

SECOND OIL PALM AND COCONUT PROJECT

IVORY COAST

rFL""rT" TO

ei--:wt -- eic- Esu G3-

June 1, 1971

Agriculture Projects Department

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CURRENCY EQUIVALENTS

US$1 = CFAF 277.71CFAF 100 = US$0.36CFAF 1 million = US$3.601

WEIGHTS AND MEASURES

Metric System

ABBREVIATIONS

BEI Banque Europeenne d'Investissement (European Investment Bank)BNDA Banque Nationale pour le Developpement de l'Agriculture

(National Bank for Agricultural Development)BSIE Budget Special d'Investissement et d'Equipement (The Development

Budget)CM Caisse Autonome d'Amortissement (an Ivorian public institution in

charge of the servicing and amortization of Ivory Coast publicdebt)

CCCE Caisse Centrale de Cooperation Economique (a French public institu-tion, providing soft loans to developing countries)

CFAF Communaute Financiere Africaine Franc (the common currency of themonetary union)

CFHP Compagnie Fermiere des Huileries de Palmes (French Oil MillManagement Company)

CSSPPA Caisse de Stabilisation et de Soutien des Prix des ProductionsAgricoles (Agricultural Price Stabilization Agency)

FAC Fonds d'Aide et de Cooperation (French Aid Fund)FED Fonds Europeen de Developpement (the aid fund of the European Eco-

nomic Community providing grants and soft loan assistance todeveloping countries)

FER Fonds d'Extension et de Renouvellement pour le developpement de laculture du palmier a huile (an investment fund for the renova-tion and development of oil palms)

FS Fonds Social (a fund created for rural habitat improvement)IRHO Institut de Recherches sur les Huiles et Oleagineux (French Agri-

cultural Oils Research Institute)PMWA IBRD's Permanent Mission, West AfricaSEDES Societe d'Etudes et de Development Economique et Social (Firm of

Consultants)SOCFIN Societe Financiere (Belgian Financial Agency specialized in Indus-

trial Plantations)SODEPALM Societe Pour le Developpement et l'Exploitation du Palmier a Huile

(Ivory Coast Government-owned Company specialized in oil palmand coconut development)

SODETEG Societe d'Etudes Techniques et d'Enterprises Generales (Firm ofConsultants)

SOGESCOL Societe de Gestion Commerciale pour le Caoutchouc et les Oleagineux(Belgian company which handles rubber, oils and agriculturalproducts - SOCFIN subsidiary company)

SONAFI Societe Nationale de Financement (Ivory Coast National FinancingCompany)

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS .................................

I. INTRODUCTION ............................................

II. BACKGROUND ............... 1.........1

A. General . ...........................................B. Institutional Structure ............................ 2C. The Oil Palm and Coconut Sectors ................... 3

III. THE PROJECT ............................................. 5

A. General ............................................ 5B. Oil Palm Outgrowers ................................. 6C. Coconuts ............................................ 7D. Dabou Oil Mill ..................................... 10

IV. COST ESTIMATES AND FINANCING ............................ 12

A. Cost Estimates ..................................... 12B. Proposed Financing ................................. 14C. Procurement ........................................ 15D. Disbursement ....................................... 16E. Accounts and Audit ................................. 16

V. ORGANIZATION AND MANAGEMENT ............................. 17

A. General ............................................ 17B. Outgrower Selection, Size

of Holdings and Credit Arrangements ................ 19C. Processing Outgrowers Production ................... 20D. Marketing .......................................... 20

VI. YIELDS, OUTPUT, MARKETS ANDPRICES, PARTICIPANTS' BENEFITS .......................... 21

A. Yields and Output .................................. 21B. Markets and Prices ................................. 22C. Outgrower Benefits ................................. 22

This report is based on the findings of an appraisal mission which visitedIvory Coast November-December, 1970, composed of Messrs. G. Losson, M. Huas(Bank) and M. Palein (PMWA).

Page No.

D. SODEPALM and PALMINDIJSTRIE Benefits .... ............ 23

E. Government Benefits , ................................ 24

VII. BENEFITS AND JUSTIFICATION ............. .. ............... 24

VIII. RECOMMENDATIONS ......................................... 25

ANNEXES

1. Progress of Loans IVC-611, 612, 613, and 686

2. Project Entities

3. Oil Palm and Coconut Sectors

4. Project's Oil Palm Planting Program

5. Coconut Production

6. Dabou Oil Mill

7. Project Costs

8. Summary List of Goods to be Financed by Bank Loans - Estimated

Actual Disbursements

9. Credit Arrangements - Oil. Palm Outgrowers

10. Credit Arrangements - Coconut Outgrowers

11. Marketing Arrangements

12. Markets and Prices for Oi.l Palm and Coconut Products

13. Financial results for Oi]L Palm and Coconut Outgrowers

14. Project Cash Flows and Returns

15. Government and FER Project Cash Flows

16. Calculation of the Economic Rate of Return and Sensitivity Analysis

MAPS

1. SODEPAlLM's Oil Palm Estates and Outgrower Programs

2. Coconut Developments3. Dabou Oil Mill and Existing Mills in Dabou Area

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

SUMMARY AND CONCLUSIONS

i. This is an appraisal report on a project which constitutes a sec-ond stage of development of palm oil and coconut production in Ivory Coast.The project includes the (a) further developmient of oil-palm outgrower small-holdings; and coconut estates and outgrower smallholdings; (b) provisionof the necessary infrastructure; and (c) construction of a palm oil mill.The project also would include the provision of credit to outgrowers. Thefirst stage is proceeding on schedule and is being carried out efficiently.

ii. Oil palm and coconut products are two of the main agriculturalcomponents of the Government's crop diversification program. The countryis well suited to compete with these products in the world market underpresent and expected future conditions.

iii. The project would be carried out by SODEPALM, a company fullyowned by the Government and by PALMIVOIRE, a privately controlled manaRe-ment firm which would construct and manage theTiWrn.wch_would be ownedby PALMINDUSTRIE, a private limited company with a government iiajorityshareholding These three organizationis are interrelated, ar- a workedclosely together in the past on similar projectE with good results.

iv. Tie project would be carried out during thle 1971-fi6 p-2riod and itscosts are estimated to be llS$17.6 million: US$1./ million 'or oil palms;US$11.1 million for coconuts; and US$4.8 million for the oil mill. TheBank would make two loans totalliing US$7 million: one to SODEPALI4 (US$5.1million) for the oil palm outgrower's program (US$017 niillion), anc for thecoconut program (US$4.4 million) and the other to PALMIND)USTRTIE (US$1.9 mil-lion) for the Dabou oil mill. The Caisse Centrale de Cooperation Economique(CCCE), through the Banque Nationale de Development Agricole (BNDA), wouldalso make two loans for the same amounts. The Government would allocateUS$2.6 million equivalent and the balance of US$1 million woulu be financedout of self-generated funds. Most of farmers' contribution would be in theform of labor and self-provided tools. The Bank's coatribution represents40% of total Project costs from; 1971 through 1976 andi would repiescitt 60% offoreign exchange costs. Iterms financed by the Bank would be procured underinternational and local competitive bidding.

v. Oil palm outgrowers would enter into contracts wich SODEPALM, underwhich they and loans fjrom SODEPALM in return qr supply-ing their production to SODEPALM at a, fixed prigg_whicTh In effect would ven-sure a return to SODEPALM and Government of at least 7% owl their investmentsin Efiz-offtl4rd ram oans to coconut ougrowers would be orthiodoxcredit operations and would bear 7-1/i, interest.

vi. The returns to the economy from the proposed Project's investmentsare estimated to be as follows: oil palm outgrowers, 17%; coconut estates,18%; coconut outgrowers, 16%; and oil mill, 17%.

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vii. The whole incremental production generated by the Project wouldbe exported, increasing Ivory Coast's annual net foreign exchange earningsby about US$5.6 M by 1980.

viii. At peak production, the annual incremental income net of debt ser-

vice from the average 4 ha individual oil palm outgrower's holding would beabout US$360, and from the 4.5 ha coconut outgrower's holding US$250 equiva-lent.

ix. The Project is suitable for two Bank loans totalling US$7 million.The loan to SODEPALM would be disbursed during the period 1971-76 and repaidover 15 years from 1977. The loan to PALMINDUSTRIE would be disbursed duringthe period 1971-74 and repaid over 15 years from 1975. Both loans would bearinterest at 7-1/4%. Interests would not be capitalized during the disburse-ment periods.

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

I. INTRODUCTION

1.0l The Government of the Ivory Coast has asked the Bank to finance partof the costs of consolidating and expanding its ongoing oil palm and coconutdevelopment programs. The objective of these programs is to further diver-sify agricultural production in forest areas, and to increase farmers' in-comes and the country's foreign exchange earnings.

1.02 The prolect, for which financing is sought. includes for SODEPALMthe planting of 4,500 ha of outorower oil palms, the planting of hybridCoconut_ on government-owneF te .. and o-n out g_ 4 _ hi_ g--4,500 ha; and for PALMINDUSTRIE the construct a palm oil mill wthe capacity to process the produce of some 13,Q00 ha of oil palms.

1.03 The project was prepared by the association of companies (SODEPALM,PALIfINDTUSTRIE and PALMIVOIRE -- commonly called the Participation) whichhave responsibility for carrying out the Government oil palm and coconutprograms. The Bank's Permanent Mission to West Africa (PMWA) provided as-sistance in preparation. This report is based on the findings of a Bankmission which visited the Ivory Coast in November/December 1970, and whosemembers were Messrs. Losson, Huas and Palein.

1.04 The Bank has made four loans for agricultural development in theIvory Coast: three totaling US$17.1 M in 1969 for oil palm and coconutdevelopment and a loan of US$7.5 million in 1970 for smallholder cocoaproduction. The progress of these projects has been satisfactory. Disburse-ments for the three first loans have been much slower than estimated due tothe very favorable cash flow resulting from the high prices obtained re-cently for palm oil and kernels and also because SODEPALM and PALMINDUSTRIEhave been able to obtain short term funds at low interest rates. The Bankhas been notified that disbursements will increase during the next months(Annex 1).

II. BACKGROUND

A. General

2.01 Population is estimated at about 5.0 M and to be growing at about3-3.5% annually (including 1% growth from immigration). More than 80% ofthe working population is directly engaged in rural pursuits; in addition,close to 500,000 foreign workers, mainly from Upper Volta, are employed inagriculture.

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2.02 The Ivory Coast has a land area of about 322,000 km broadly di-vided into two ecological zones. Bordering the Atlantic Ocean in the south,the tropical rain forest zone stretches about 200 km inland. To the north,the forest gradually diminishes, and is replaced by savannah.

2.03 Gross domestic product amounted to CFAF 405 billion (US$1.5billion) and exports to CFAF 144 billion (US$0.5 billion) in 1970. Agricul-ture, forestry and fishing accounted for 28% of GDP at market prices andfor 92% of exports in that year. The agricultural sector is one of themost dynamic in Africa. The Ivory Coast is the world's third largestproducer of coffee and the fourth largest producer of cocoa. Bananas andfresh and canned pineapples are also produced and exported in large quantities.

2.04 Agricultural policy objectives of the Government are: to becomeself-sufficient in foodstuffs excelpt for livestock products; to expand theproduction of traditional export crops; and to seek diversification opportuni-ties, especially into such products as oil palms, coconuts, cotton, fish,lLd rubber. The production of the first three has already been expandedgreatly. Government has recently embarked on a program for expanding cocoaproducticn, and is considering prolposals to establish two large rubberdevelopment schemes.

B. Institutional Structure

2.05 Responsibility for crop lproduction, forestry and fresh water fish-eries is held by the Ministry of Agriculture. Development planning is inthe hands of the Planning Ministry, while detailed agricultural developmentprogramming is the responsibility of the Ministry of Agriculture. Execu-tion of these programs is entrusted to a number of agencies, some of whichare state companies, e.g. Societe d'Assistance Technique pour la Modernisa-tion Agricole de la Cote d'Ivoire (SATMACI) for coffee, cocoa and livestockdevelopment; Societe pour le Developpement et l'Exploitation du Palmier aIluile (SODEPAIM)) and its associated companies for oil palm and coconutdevelopment. Others are foreign companies under contract to the Govern-ment, such as Compagnie Francaise de Developpement des Textiles (CFDT) forcotton development.

2.06 Three principal entities are involved in the proposed Project:SODEPALM, PALMINDUSTRIE and PALMIVOIRE. SODEPALM was founded in 1963 tomanage and participate fully in thie development of the oil palm, and of thecoconut industries. It is wholly owned by Government. It owns, and develops,oil palm and coconut estates in thie country, and is also responsible forproviding services to all oil palm and coconut outgrowers. It is an effi-cient organization. PALMINDUSTRIE is owned 73% by Government and 27% byprivate interests, and owns the palm oil mills and ancillary installations.PALMIVOIRE is owned 40% by Government and 60% by the same private interestsw:ho take a minorit ownership in PALMINDUSTRIE. PALMIVOIRE operates onlythe SODEPALM oil palm estates (not the sma lholdings) -- supplying all staff

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above estate manager level -- and the PALMINDUSTRIE mills, for which itsupplies all staff. Its operating standards and performance are very good.The three companies are linked together in an Association in Participation(the Participation), a form of joint venture (Annex 2). The Participation'sprofits or losses are divided proportionately among the three companies onthe basis of their relative financial contributions. PALMIVOIRE is remune-rated for its management services on a sliding scale formula based on thefinancial results of the Participation's activities. During the first fiveyears of development, when no profits are expected, it will receive a fixedfee of CFAF 30 M per annum.

2.07 Agricultural research is undertaken by various French organiza-tions under a technical assistance agreement with France, and research costsare shared equally by the two Governments. Oil palm and coconut research isundertaken by the Institut de Recherches pour les Huiles et Oleagineux (IRHO).These organizations concentrate on applied research of a high standard.

C. The Oil Palm and Coconut Sectors

Oil Palms

2.08 Oil palms grow wild in the forest regions, and until veryrecently satisfied the country's palm oil requirements, and permitted theexport of about 12,000 tons of palm kernels annually. In the 1960's it wasestimated that the production of wild palms was about 330,000 tons of freshfruit bunch (ffb) annually, of which about 75,000 tons were processed inmodern palm oil mills and the balance by traditional methods.

2.09 Government began in the 1950's to encourage the planting ofimproved oil palms, bred by IRIO, to replace wild palms. With the develop-ment of even higher-yielding varieties, a new program was introduced toproduce palm oil and kernels for export and SODEPALM was established in1963 to carry it out with the financial help of Fonds Europeen de Develop-ment (FED) Banque Europeenne d'Investissements (BEI), CCCE, and the Bank(Loans IVC-611, 612 and 613). The current SODEPALM program will be completedin 1972, at which time some 66,000 ha of oil palms will have been established:39,000 ha (together with milling facilities) on SODEPALM-owned estates, and27,000 ha on smallholdings in the vicinity of those estates (Annex 3). Closeto 9,000 ha of program palms are now in production; and as a consequencethe Ivory Coast has become a palm oil exporter 1/.

Coconuts

2.10 Coconuts are not indigenous to the Ivory Coast, but have beengrown along the coast by smallholders since the last century. Government

1/ About one-half of the 20,000 tons of oil which reached the market in1970 were exported.

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programs to stimulate coconut production started in 1967. About 27,000 haare under coconuts: of these, about 19,000 ha belong to smallholdings devel-oped prior to 1967. Most of the remaining area has been developed by SODE-PALM more recently, and comprises about 4,700 ha in SODEPALHI-owned estates,and 2,600 ha in smallholdings (Annex 3). The SODEPATIM coconut program hasbeen financed principally by the Bank (Loan IVC-613) and CCCr (Annex 1).

2.11 Coconut products ae not,e psrted at pr,tsent. The internal tradeis in the orm of copra (about 2,000 tons are milled annually), fresh

coconut oil extracted by traditional methods, and fresh nuts. An expansionof coconut plantings will require the export of coconut products 1/. Exportmarket prospects are satisfactory (Chapter VI).

2.12 IRIIO has developed hybrid varieties of coconut which are not onlyhigh-yielding (para 6.03), but which bear fruits in the third or fourth year(instead of in the seventh or eighth year) after planting. As such, coconutcultivation is a profitable undertaking, and particularly attractive on thes.ardy coastal soils which are unsuitable for the commercial production ofmost other crops.

Financing the Overall Oil Palm and Coconut Programs

2.13 Detailed financial statements of the First Oil Palm and CoconutProject, together with the summarized financial position of SODEPALM, PALM-ITDUSTRIE and the Participation, as well as the consolidated annual cash

surpluses and deficits for the First and Second Oil Palm and Coconut Projects

are in Annex 2 and are summarized as follows:

SODEPALM4

2.14 Except for a small cash deficit of CFAF 88 million (US$0.3 million)in 1971 the estimated overall SODEPALM cash flow, before corporation taxesand distribution of dividends, would be in surplus as from 1972. Cumulativedeficits on the coconut programs in the first and second projects would rise

to CFAF 1.6 billion (US$5.8 million) during the period 1975 through 1979,but would be adequately covered by surpluses arising from oil palm estateoperations.

PALMINDUSTRIE

2.15 Despite estimated annual cash deficits of up to CFAF 200 million(US$0.7 million) in 1972, 1973 andl 1975 the cumulative cash position of

1/ Copra contains about 64% coconut oil and is prepared by drying the meatof the coconut. The meat is extracted after dehusking and splittingthe nut. There is an increasing trend among producing countries to

mill copra domestically and to export coconut oil and coconut expellercake (a livestock feed). It is believed that the Ivory Coast wouldfollow this pattern.

PALMINDUSTRIE remains positive throughout due to the cumulative surplusaccrued up to 1971. Subject to corporation tax and distribution of dividends,estimated annual cash surpluses would rise to an average of CFAF 470 million(US$1.7 million) from 1977 onwards.

Oil Palm Outgrowers

2.16 The annual cash deficit of the two oil palm outgrowers' projectswould reach a maximum of CFAF 280 million (US$1 million) in 1978 but smallannual surpluses would arise from 1982 onwards. Annual cash deficits to1981 would be met by the Fonds d'Extension et de Renouvellement pour leDevelopment de la Culture du Palmier a huile (FER), subject to commitments forlabor housing under the FED-financed programs. This special fund, FER, wascreated by act of Parliament in June 1969 to renovate and develop oil palmsin Ivory Coast. SODEPALM refunds to this fund the cost of its estatesestablished with FED grants and BSTE funds and also the cost of outgrowers?plantations financed with FED and BSIE Funds. FER uses its funds to

establish modern houses and villages for Estate workers under a programwhich has been approved by FED and to assist in financing the outgrowersdevelopment of oil palms. The PER cash flow (Annex 15) shows that Govern-ment funds totalling CFAF 1.3 billion (US$4.7 million) would have 'to beprovided from 1971 through 1973 but this would be fully recovered by 1979.If FER funds are insufficient to meet oil palm outgroxwers' cumulativedeficits of CFAF 533 million (US$1.9 million) during the period 1971 througl1974, Government funds would have to be provided pending recovery from FERfrom 1975 onwards.

III. TIE PROJECT

A. General

3.01 The project comprises:

(a) planting 4,5son ha of oil palms_by out9 rowers in existingdevelopment areas with the help of SODEPALM's technical -

and supervised credit servie. The total area of oilpalmout~growers would increase from 22,800 ha to 27,300 ha;

(b) planting 8,000 ha of coconut's on two existing, and on two C

new SODEPAL- es-sttats, increasing their total area from4,890 ha to 12,890 ha;

(c) planting 4,500 ha of coconuts by outgrowers in the vicinityof SODEPAI,11 estates with the hele p12XiQEl'M's techn_ical,and supervised credit services. The total area of coconut J-outgrowers would increase from 3,024 ha to 7,524 ha;

(d) providing roads, other iTfrastr e, and pKrocessingfacilijti.es for the above outgrowers, as well as for thosebein%g financed tinder Loan 613-IVC; and

(e) desi&iniE, const A_Un:g.nd commiss Juio a p almoil mill(the Dahou oil mill) to be owned by PAIMTNDIISTRIE, toprocess the production of some 10,000 ha of SODEPALM'sestate and associated outgrowers' oil palms, the productionof 3,600 ha of IPJIO-owned estate oil palms; and of wildoil palm ffb offered for sale in the mill's service area,as well as providing transport facilities for the mill'sactivities.

The project would be carried out from 1971 through 1982. The proposed Bankloans, however, would be disbursed in the years 1971 through 1976, when mostof the total project expenditures would be incurred. The development costsduring the period 1977 to 1982 would be met by self-generated funds andGovernment subsidies. SODEPALM would be responsible for the oil palm andcoconut planting programs, and PALNIVOIRE on behalf of PALMINDUSTRIE forthe mill program.

Ecological Conditions in the Project Areas

3.02 The project area extends along the coast up to some 60 kmsinland from Brediberi 250 kms West of Abidjan to the border with Ghana,120 kms East of Abidjan. Vegetation varies from light to dense underbrush.The land is flat. Soils of the coconut areas are sandy, homogeneous andwell-drained, althouvh they lack nutrients. Soils of the oil palm areasare heavier, but well-drained and slightly richer in nutrients. Ecologicalconditions for coconut production are very good. Those for oil palmproduction are good by African standards, but not capable of producing theyields of Southeast Asia which are 30 to 40% higher. Temperatures vary from22 C to 310C. Rainfall averages 1,800 mm per annum, humidity is high, andsunshine is adequate.

B. Oil Palm Outgrowers

Planting Program and Location of Plantings

3.03 Annex 4 Table 1 gives a schedule of proposed project plantings.Plantings would be made in 11 locations where either the average size ofoutgrowers' holdings needs to be increased and/or where additional plantingsare nee0ded to redtuce ffb collection costs ('tap 1) . Five-hundred ha would be1l.itate (In ii172, and 2,000 ha each in 1973 and 1974. The relationship be-fwotni th. proposed plantings and those made under previous programs is givenhi A\inte 4, Table 2. Some 900 new families would benefit from the project.

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Land

3.04 Plantings would be made on land for whichl thie farmer alrecddy hasright of usufruct.

Communications, lnfrastructurc and Equipment

3.05 All plantings would be made close to existing roads, and as closeaas possible to the mills, and would be supervised by existing SODEPALM staff

w w |who are generally housed and equipped adequately for this purpose. Con-I? s[sequeny_ apartfrom some minor costs for staff transportation which are ac-

/ jcounted for in project calculations, expenditures on new infrastructure andequipment would be insignificant.

Development and Maintenance

3.06 Oil palm holdings, unlike coconut holdings, would be cleared bytheir owners (due to their scattered location and the existence of lightunderbrush in their areas), whlo would subsequently plant and maintainoil palm seedlings provided from SODEPALM nurseries. Seedlings, covercrop seed, fertilizer and cash for hiring labor would be supplied to theoutgrower by SODEPALM (para 5.09), and SODEPALM would supervise all opera-tions. Development and maintenance methods used would be the same as thoseused in the past, which have proved satisfactory.

3.07 Labor would be supplied by both the farm family and hired workers.Some 19,000 ha of outgrowers' oil palm plantings have been made; shortagesof land and labor have not been constraints and are not expected to becomeso.

C. Coconuts

Planting Program

3.08 Estates and Outgrowers. Planting of the new hybrid variety(Annex 5) would be carried out on the existing Assinie and Grand Lahou estates(establishedl with Bank assistance under Loan IVC-613) and on two new estates:Boulay and Fresco. Outgrower plantings, on the other hand, would be madein the vicinity of these four estates, and the Alladian area between Addahand Jaqueville (Annex 5, Table 1). Plantings would be made as follows:

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1971 1972 1973 1974 1975 Total(a) (b) (a) (b) (a) (b) (a) (b) (a) (b) (a) (b)----------- ______________-----ha------------------

Assinie 500 - 500 - 800 - - 640 - 970 1,800 1,610Boulay - - 300 200 400 260D - 350 - - 700 810Grand

Lahou - - - - 400 - 1,100 210 1,500 310 3,000 520Fresco - - - - 400 2410 1,100 350 1,000 480 2,500 1,070Alladian - - - - - - - - - 490 - 490

Total 500 - 800 200 2,000 500 2,200 1,550 2,500 2,250 8,000 4,500

/1 (a) refers to estates, and (b) to outgrowers plantings.

The relationship between the proposed plantings and those made under Loan613-TVC (first prniect) is given in Annex 5, Table 2.

Land

Estates

3.09 The land to be occ,upte4by SODEPALM is owned by the Statp, Whencoconut plant is ,comp let_ed..SODBPAlM willI be granted full ownership of theare>,. Assurances to this effect were obtained during negotiations.

Outgrowers

3.10 Outgrower plantings would be made on blocks, comprising about 1,125fxm wzh4ae1lop 4.ha af..co4iconu'ts eac,h . Most of the land would beprovided by the.,State and the balance by communities with usufruct rights.Assurances were obtained during negotiations that each outgrower will havea personal usufruct on his planting when it is completed. The individualusufruct right lapses at the beneficiary's death but may be transferred toone of his heirs.

Transport and Communications

3.11 The first three estate sites are located on the lagoon/canal sys-tem which runs along the Atlantic seaboard, and which provides cheap trans-port to Abidjan. Assinie is some 1O0 km east of Abidjan, to which it isconnected also by road. Boulay is aLn island lying to the immediate west ofAbidjan, with which it has a road and ferry link. Grand Lahou, also an is-land, lies some 150 km west of Abidjan and has road and ferry links with thecapital. Fresco, some 200 km west of Abidjan is relatively isolated, but islinked by about 35 km of road to Port Gauthier on the lagoon system (Map 2).Transport to Abidjan from this site is by truck and by barge. Outgrowerplantings in the Alladian area would. be adjacent to the Ebrie lagoon and2njoy good water transport facilities. Under the project radio equipmentwould be installed to bring all estates within the SODEPALM radio network.

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Infrastructure and Equipment

Estates

3.12 Assinie and Grand Lahou were established in 1968 and at the end of1970 had 1,220 ha and l,006 ha of coconuts respectively. These two estateshave substantial basic infrastructure, such as roads, management and laborhousing, stores, and water supplies, as well as standard estate equipment,such as vehicles, tractors and trailers, generators, and office equipment.The project would entail the expansion of estate infrastructure, and the pur-chase Of additional egui.pment for these two estates, as well as the,oitonof infrastructure and equipment in line with the plantings scheduled forBoulay and Fresco.

Outgrowers

3.13 About 225 km of tracks and access roads and a wharf would be con-_ x _ ~ ,...,, _ ,.... .. ks w .th .t 's ..

structed to link all existing anoe prop.i d outgri6wef blocks wIth the estates,Ehfi;hnational road network, and the lagoon system. Some houses would bebuilt to house the junior SODEPALM staff needed to supervise outgrowers.Tractors and trailers, and a few trucks, light personnel vehicles and motor-cycles would be purchased to provide adequate facilities for the transport ofmaterials and personnel.

Development and Maintenance

Estates

3.14 The land would be cleared mechanically, and trees and debris wind-rowed and burned completely, complete burning is necessary to prevent thebuildup of beetle populations capable of seriously damaging the youmng palms.SODEPAIM would carry out the bulk of land clearing by force account. IIybridseed nuts would be produced at IRIIO seed gardens and would be germinated atthe IRHO station, which would make a first selection of the plant material.

6 3.15 The estate areas.. are-thinlyy populated, and as in the case of most<S -\estate development in Ivory Coast, labor would be recruited from among

t[Voltaics, of whom a steady stream is eni`grating to the Ivory Coast's! coastal zone. Generally, male workers arrive without fam'lies, 'ie-riiiingafter'''a yea'r or so to fetch their families or to marry. Consequently, anew estate generally experiences a high labor turAnQvr_ in its initial years.After this initial period, and as workers return with their families, the -situation stabilizes. Labor problems are not anticipated, since SODEPALMhas substantial experience in labor recruitment, and its operations havenever been affected seriously, or for a sustained period, due to laborshortages.

3.16 Funds would be provided under the project for the maintenanceof all project plantings until the end of 1976. By that time plantingsmade in 1972 would be in their first year of production. The maintenancerequirements of the crop are small; principal components are maintenance ofthe cover crop; and fertilizer and pesticide applicaLtion. Fertilizer wouldhe applied annually in accordance with IRUO recommendations.

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Outgrowers

3.17 Land clearing would be carried out mechanically by SODEPALHI on ablock basis, and outgrowers would then establish and maintain their holdingsunder SODEPALM direction using the same planting material, inputs and tech-niques used on the estates. Planting material and inputs, and some cash,would be supplied under the credit arrangements de.scribed in paragrap'^ 713.

3.18 Outgrowers would plant their 4 ha holding in one year and wouldneed to supply about 124 man days for ths purpose.~ ereater, tIe require-ment w-oul& Td eiEii Gasuai labor is obtainable locally: both from residentand from itinerant Voltaic workers. No problems have arisen in obtainingsufficient labor under the ongoing program and none are foreseen in the fu-ture.

Processing

3.19 The bulk of processing facilities required for project plantingswould not be neecled during the disbursement period of the Bank loan, althoughthe cost of all facilities needed is included in financial and economiccalculations. Tentative plans have been prepared by consultants 1/ underIRIIO guidance for a central, continuous-flow processing plant capable ofhandlinp, undehuslced nuts and producing coconut oil and expeller cake. Thisplant could be in operation by 1975. In the interim period, about 100small copra-drying units will be needed and provision is made for this underthe Project.

D. Dabou Oil M4ill

General

3.20 The proposed Dabou mill (Annex 6) would process the ffb productionof the Dabou zone (Map 3). Construction has started and the mill will becommissioned in early 1973. Plantings in the zone now comprise 3,500 ha ofSODEPALMI estates 2/, 4,800 ha of outgrower palms (scheduled to increase to6,300 ha by 1974), and 3,600 ha of palms on IRIIO's Robert Michaux estate.In addition, about 10,000 tons of ffb from wild palms is supplied by thezone's growers annually for processing. Tle zone's total processingrequirements are expected by the mission to increase from 94,000 tons of ffbin 1971 to 141,000 tons in 1982. 3/ Existing proccssinz facilities

1/ These consultants are: Societe d'Etudes Techniques et d'Enterprises(enerales (SODETEG) for the technological studies and Societe d'Etudeset- dc Development Tconomique et Social (SEDES) for the marketing studies.

?/ Including 1,950 lha of new Government-owned estate palms whiclh are beingtransferred to SODEPAII.

3/ SODEPALM's own forecast is 149,000 tons.

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are the state-owned Acobo-D:k abnmill-managed by -la Societe Fermiere desHuileries de Palmes (CFHP), and a mill on IRHO's estate. The'CFHP-managed -millE,c-otimm 6isi'nd7 in i950, has an effective annual capacity of 40,000 tonsof ffb, is inadequate for the zone's needs, has high labor requirements, andneeds substantial investments to improve extraction rates and to ensure highoil quality. The IRHO mill is old, too small, and uneconomic to operate.

3.21 An assurance was obtained from Government that the CFHP-managedmill would b16-TI'sed d6wn once'''the new _1i1 was commissionedd sucessfuiy.IRHO has stated that it will scrap the Robert Michaux station's mill oncethe new mili is commissioned. A Government decree and signature of an agree-ment satisfactory to the Bank between IRHO and PALMINDUSTRIE-PALMIVOIRE, res-pectively, providing for the processing of all their estate ffb by the newmill would be a condition of signing the proposed loan to PALMINDUSTRIE (seepara 4.04). The alternatives of improving and expanding the above mills andof transporting ffb from the Project area to other PALMINDUSTRIE mills (Annex6, page 2) have been considered and rejected.

Location and Communications

3.22 The mill would be located about 50 km west of Abidjan on theAbidjan-Bouake main road, and about 10 km northwest of Dabou (Map 3). TheAbidjan-Bouake road is tarred and well maintained. Other roads in the Dabouzone are gravel-surfaced and generally well maintained. The mill would besited near the crossroads Sikensi-Dabou/Grand Lahou-Yassap and would bewithin a maximum of 20 km from the plantings that it would serve. Oil andkernels would be evacuated to Abidjan. The proposed mill site is satisfac-tory both from location and engineering standpoints and detailed investigationsconfirm good underground water supplies.

3.23 The location of a mill of this size close to a main road wouldcause major traffic problems unless special precautions were taken (Annex 6,Chart). It is proposed that a cloverleaf type intersection be constructedto avoid traffic bottlenecks at the mill site. Costs are estimated atCFAF 25 M and are included in project costs.

Technical Features

3.24 The mill would have an hourly capacity of 40 tons of ffb. Itwould be designed to allow the later installation of a third line to bringcapacity to 60 tons/hr if ffb production in the mill's area so warranted.

3.25 Ancillary equipment and infrastructure would include: oil storagetanks adequate to hold 1,600 m3 or half a month's average oil production;a small stock of spare parts; houses for senior mill staff, accommodationfor artisans and laborers; a workshop and store, and an office/laboratory.Vehicles would include a few automobiles, tractors and trailers, and a lighttruck. The mill would be connected by radio with the PALMIVOIRE network.Electricity would be supplied by two turbo alternators.

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3.26 The mill would be designed by PALMIVOIRE, whlich also would under-take its construction. The company's engineering section is well staffedand has been responsible for similar work on PALMINIDUSTRIE's existing mills.

FFB Collection and Palm Product Evacuation Vehicles

3.27 The project would include the purchase of vehicles from 1972through 1974 for the collection of ffh from the outgrowers and from estateswhich the mill would serve, as well as for the transport of oil and of ker-nels to Abidjan. Five-ton capacity dump trucks would be purchased for thecollection of ffb and 20-ton capacity oil tankers for the evacuation of oilto Abidjan. No replacement vehicles would be needed until after 1974.

IV. COST ESTIMATES AND FINANCING

A. Cost Estimates

4.01 Project costs during the six-year period 1971 through 1976 (seepara 3.01) are estimated at CFAF 4.9 billion (US$17.6 million), of which theforeign exchange component is about CFAF 3.3 billion (US$11.8 million) or67%. Detailed cost estimates are in Annex 7, and are summarized in the fol-lowing table:

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Summarized Project Cost Estimates1971 through 1976

CFAF (millions) US$ (millions) ForeignLocal Foreign Total Local Foreign Total Exchange

A. OIL PALM OUTGROWERSVehicles and equipment 7 27 34 - 0.1 0.1 80Planting material 72 63 135 0.3 0.2 0.5 50Other field develop-ment and overheads 64 118 182 0.2 0.4 0.6 65

Cash advances tooutgrawers 84 - 84 0.3 - 0.3 -

227 208 435 0.8 0.7 1.5 49Contingencies

- physical 10 8 18 - 0.1 0.1 49- price 10 7 17 0.1 - 0.1 49

Sub-total 247 223 470 0.9 0.8 1.7 49

B. COCONUT ESTATESHousing and otherbuildings 47 71 118 0.2 0.3 0.5 70Vehicles and equipment 8 32 40 0.1 0.1 0.2 80Land clearing 252 588 840 0.9 2.1 3.0 70Other field develop-ment and overheads 258 451 709 0.9 1.6 2.5 64Kilns 3 14 17 - 0.1 0.1 80Roads 3 7 10 - - - 70

571 1,163 1,734 2.1 4.2 6.3 67Contingencies

- physical 28 58 86 0.1 0.2 0.3 67- price 29 58 87 0.1 0.2 0.3 67

Sub-total 628 1,279 1,907 2.3 4.6 6.9 67

C. COCONUT OUTGROWERSHousing and otherbuildings 7 10 17 0.1 - 0.1 60Vehicles and equipment 5 19 24 - 0.1 0.1 soLand clearing 142 331 473 0.5 1.2 1.7 70Other field develop-ment and overheads 127 195 322 0.4 0.7 1.1 67Cash advances tooutgrowers 26 - 26 0.1 - 0.1 -Kilns 1 2 3 - ) 0.1 ) 0.1 80Roads 1 1 2 - ) ) 70

309 558 867 1.1 2.1 3.2 64Contingencies

- physical 15 27 42 0.1 - 0.1 64- price 15 27 42 - 0.1 0.1 64

Sub-total 339 612 951 1.2 2.2 3.4 64

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CFAF (m:Lllions) US$ (millions) ForeirnLocal Fore:lJE Total Local Foreign Total Exchange

D. KILNS AND ROADS(Existing outgrowers)Roads 47 78 112 0.1 0.3 0.4 70Kilns 17 67 84 - 0.2 0.2 80

51 145 196 0.1 0.5 0.6 74Contingencies

- physical 3 7 10 0.1 - 0.1 74- price 3 7 10 - 0.1 0.1 74

Sub-total 57 lSi9 216 0.2 0.6 0.8 74

E. DABOU OIL MILLMachinery & equipmentinclud. installation 111 560 671 0.4 2.0 2.4 84

Factory and housingconstruction 166 267 433 0.6 0.9 1.5 62Vehicles 26 104 130 0.1 0.4 0.5 80

303 931 1,234 1.1 3.3 4.4 75

Contingencies- physical 20 60 80 0.1 0.2 0.3 75price 5 17 22 - 0.1 0.1 75

Sub-total 328 1,00,B 1,336 1.2 3.6 4.8 75

TOTAL 1,599 3,281 4,880 5.8 11.8 17.6 67

4.02 As agreed by Government, all imports will be free of importtduties during the development deriod. Estimates are based on curreint SODE-PALM, PALMINDUSTRIE and PALMIVOIRE experience in field and palm oil milloperations and contain the following contingencies:

(a) physical contingencies totalling about 5% of project costare included for oil palm outgrowers, coconut estates andoutgrowers, kilns and roads and 3% of project cost for theDabou oil mill. These are considered adequate in view ofthe experience obtained from the first project; and

(b) overall price contingencifes totalling about 5% of projectcost are also included for oil palm outgrowers coconutestates and outgrowers, kilns and roads and 5% of projectcosts for the Dabou oil mill. These would primarilycover possible increases in the cost of imported items andlabor cost.

B. Proposed Financing

4.03 It is proposed to make two Bank loans totalling US$7.0 million.The loans would cover 40% of total project costs of US$17.6 million andabout 60% of the estimated foreign exchange cost of US$11.8 million.

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4.04 As in the case of the First Oil Palm and Coconut project, separateloans would be made to SODEPALM and to PALMINDUSTRIE as follows:

(i) US$5.1 million to SODEPALM to finance 4,500 ha of outgrowersoil palms, 8,000 ha of estate coconuts, 4,500 ha of out-growers coconuts, and infrastructure and coconut processingfacilities for both these and existing coconut outgrowers;and

(ii) US$1.9 million to PALMINDUSTRIE to finance the Dabou mill.

4.05 The loan to SODEPALM would be disbursed during the six-year period1971-76 and would be repaid over the 15 years 1977-1991. The loan to PALM-INDUSTRIE would be disbursed over the four years 1971-74 and would be repaidover the 15 years 1975-1989.

4.06 CCCE through the BNDA would lend identical amounts to PALMINDUSTRIEand to SODEPALM, which would be disbursed over the same period as the IBRDloans. The CCCE loans would bear interest at 6% and would be repaid overthe same periods as the Bank loans.

4.07 Part of the remaining project costs would be met from the BudgetSpecial d'Investissement (BSIE), a Government budgetary fund, in the formof grants to SODEPALM, and part by PALMINDUSTRIE's self-generated funds.The overall financing plan is summarized in the following table:

FINANCING PLAN 1971-1976

Self-GeneratedIBRD CCCE BSIE Funds TotalUS$m % US$m % US$m % US$m % US$m %

Oil Palm Outgrowers 0.7 40 0.7 40 0.3 20 - - 1.7 100Coconut Program 4.4 40 4.4 40 2.3 20 - - 11.1 100Dabou Oil Mill 1.9 40 1.9 40 - - 1.0 20 4.8 100

Total 7.0 40 7.0 40 2.6 14 1.0 6 17.6 100

C. Procurement

4.08 International competitive bidding would be used to procure goodsand services estimated to cost US$3.5 million: fertilizer and insecticides,US$0.8 million; vehicles and equipment, US$0.4 million; and kilns, US$0.4million. However, the procurement of mill machinery and plant for US$1.9million would be restricted, to two firms. PALMINDUSTRIE owns eight palmoil mills in the Ivory Coast, all of which are equipped either withSpeichm (France) or de Wecker (Luxembourg) mill equipment. PALMIVOIRE wishesto purchase similar equipment for the project mill, and in the interest ofstandardization the Bank has agreed that tenders should be limited to thesetwo companies. Light vehicles estimated to cost US$0.5 million would be

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obtained under CCCE procurement procedures. High-yielding coconut and palmoil seeds estimated to cost US$1 million would be supplied by IRHO. Landclearing estimated to cost US$5.2 million would be carried out by forceaccount with the help of government equipment following the excessively hightenders received from international bidders. The cost per hectare financedunder the Project would not exceed CFAF 105.000 (US$380). Palmivoire would(a) supply the staff and labor estitnated to cost US$2.2 million; (b) developthe nurseries, estimated to cost US$0.9 million; (c) build the access roads,estimated to cost US$0.6 million; (d) transport the ffb, nuts, fertilizers,labor and finished products, and upkeep buildings at a cost of US$1.4 million;(e) build labor and staff houses; and (f) build the mill (but the steelstructure, cement and other materials would be obtained through localcompetitive bidding). The total cost of items under (f) are estimated tobe US$2.3 million.

D. Disbursement

4.09 Disbursements of the Bank loans would be against 100% of the cifcost of the vehicles (US$0.2 million) imported fertilizers and insecticides(US$0.6 million); kilns and oil mill machinery and equipment (US$1.8 million)as certified by shipping documents. These would also cover 50% of the costof oil palm and coconut seedlings (US$0.8 million), 35% of the cost of landclearing (US$1.7 million) as certified by approved completion certificatesand about 70% of the cost of specific project expenditures and totallingUS$1.9 million as detailed in Annex 8. Any surplus loan funds remainingafter completion of the project would be cancelled.

E. Accounts and Audit

4.10 SODEPALM, with PALMIVOIRE assistance, would maintain accounts forthe oil palm outgrower, coconut estate and coconut outgrower components ofthe project. PALMIVOIRE would maintain accounts for the Dabou mill as partof its accounting responsibility for the Participation. Present accountingprocedures are satisfactory. SODEPAILM and Participation accounts are auditedby both the Government's Audit Department, and by a private firm -- SocieteFiduciaire France-Afrique. During negotiations assurances were obtained thata firm satisfactory to the Bank would be employed to audit the Participation,SODEPALM and PALMINDUSTRIE accounts; and that such audited accounts would bemade available to the Bank within four months of the close of each financialyear.

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V. ORGANIZATION AND MANAGEMENT

A. General

5.01 While present organizational arrangements (Annex 2) work well, fur-

ther expansion would require decentralization of management. So far, over-centralization has not been a problem because of: the personal capability of

the common General Manager of SODEPALM and PALMIVOIRE and of his key assis-tants; excellent radio communications with all stations; and the use of verydetailed operational directives. With extensive areas of oil palms and coco-

nuts coming into production, field management is entering a more complex phasewhich will require timely decision-making by persons who fully understand thelocal situation. In addition, the present system is heavily dependent on the

General Manager and on two or three key assistants who are seconded fromFrench institutions. The departure of the General Manager would probably be

accompanied by that of these key personnel, which would seriously endangerthe management of the enterprises. For these reasons assurances were obtained

during negotiations that SODEPALM and PALMIVOIRE would: (a) make proposals

satisfactory to the Bank to ensure the strength and continuity of manage-ment. These would include decentralization to the extent necessary of the

day-to-day operations to the regional level; (b) SODEPALM and PALMIVOIREwould submit these proposals and an implementation plan to the Bank not

later than December 31, 1972; and (c) implement these proposals, as agreed

by the Bank, before the closing date. On the other hand, while Ivori-

anization is taking place at management level (81 Ivorians in 1971 as opposedto 30 in 1968), it is occurring at a faster pace at headquarters (most Ivori-

ans prefer Abidjan to field postings) than on the SODEPALM estates, but even

in Abidjan most technical positions are still filled by expatriates. Assur-

ances were received during negotiation of the previous loans that the Parti-

cipation would establish training policies and facilities for Ivorians in

keeping with staffing needs. These assurances have been fulfilled in part

only. During negotiations, assurances were obtained from SODEPALM and fromPALMIVOIRE that: (a) they would review, in consultation with the Bank, theirmanagement training facilities and programs; and (b) that they would adoptnot later than January 1, 1972, and subsequently implement, a phased progim,

satisfactory to the Bank, for the management training and recruitment of na-

tionals of the Ivory Coast.

5.02 Loans IVC 611, 612 and 613 required that appointments to the keyposts of General Manager, Assistant General Manager and Chief Loan Officer of

SODEPALM, would be made only following agreement with the Bank; the same as-surance witlh respect to these posts was obtained during negotiation of theproposed new loan.

Oil Palm Outgrowers

5.03 As shown in the Chart to Annex 2, SODEPALM maintains a Division res-ponsible for oil palm outgrowers. Within this Division and at field level

area chiefs appointed by SODEPALM supervise outgrower activity in nine princi-

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pal areas, each covering a zone of about 20 km radius from a planned or ex-isting mill. Below the area level, group chiefs appointed by SODEPALM super-vise plantings made individually by farmers who are grouped for administrativepurposes. When group plantings come into production a SODEPALM employee isappointed to coordinate and record the collection of ffb by the area's mill.About half of project plantings would be made by farmers who have alreadyplanted palms under the SODEPALM program. Because of this factor, and alsobecause about one-half of outgrower palms are now in production and requireless supervision, carrying out the project would require no significant in-crease in headquarters or area field staff. The very small increase in group

chiefs required is provided for in project costs. The performance of theSODEPALM outgrower program has been generally satisfactory and no organiza-tional or management problems are envisaged in carrying out this componentof the project.

Coconut Estates and Outgrowers

5.04 SODEPALM estates and outgrower schemes are managed by the SODEPALMCoconut Division from headquarters in Abidjan. Seven additional supervisorystaff would be required at the estate level as a consequence of the project:five assistant managers, one estate assistant, and an administrative as-sistant. SODEPALM has several Ivorians who could fill some of the new re-quired posts. The rest would be taken by expatriates.

5.05 Outgrower development is supervised by sector and group chiefs ap-pointed by SODEPALM. Sector chiefs are responsible normally for 1,000 to1,500 ha of outgrower coconuts or 2510 to 375 farmers; under them, group chiefs

supervise either 200 ha in the course of establishment or 400 ha of estab-lished palms, and about 100 farmers. Sector chiefs report to the manager ofthe SODEPALM estate with which his outgrower development is associated. Inthis way the outgrower supervisory service receives the benefit of estate-developed techniques. In the loan disbursement period, three sector chiefsand 11 group chiefs would be required. SODEPALM operates a training scheme

for Ivorians wishing to fill technical posts, and difficulties are not fore-seen in filling the additional supervisory positions that would be created bythe outgrower coconut scheme.

Dabou Oil Mill

5.06 Design, construction and subsequent operation of the mill would beundertaken by PALMIVOIRE. Since its establishment in 1969, PALMIVOIRE is per-formance in oil palm estate and palm oil mill management has been most satis-factory. Construction of the new mill would not require any strengthening ofPAI24IVOIRE staff except for the employment of an additional mill manager.

Assurances were obtained in Loan IVC-613 that appointments to the posts ofPALMIVOIRE's General Manager, Technical Department Manager, Chief FinancialOfficer and Chief Engineer-oil mills would be made only after agreement withthe Bank and under terms satisfactory to the Bank. During negotiations ofLhe proposed new palm oil mill loan, the same assurance was obtained.

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B. Outgrower Selection, Size of Holdings and Credit Arrangements

5.07 Participation in both outgrower schemes would be conditionalon the farmer's agreement to follow, throughout the development period ofhis crop, the technical advice provided by SODEPALM. Such an obligationforms part of the credit agreements that are signed between SODEPALM andoutgrowers. These agreements have been approved by the Bank.

Oil Palm Outgrowers

5.08 About 50% of project plantings would be made by farmers already par-ticipating in the ongoing program. Personal selection criteria would be thoseapplicable to coconut outgrowers and to farmers already participating in theongoing program. Existing selection arrangements would apply. Under these,the farmer's planting site must be within 200 m of a road passable by ffb col-lection vehicles; and, for project plantings, the site must be located in azone where additional plantings are needed to increase the cost efficiency ofSODEPALM supervision and ffb collection services. SODEPALM has tightened upselection, in particular as regards the favorable location and access ofplanting sites. SODEPALM provides assistance for outgrowers to plant up to10 ha of oil palms; the average size of holding is now 4 ha but tends to groweach year.

5.09 Outgrowers would receive about CFAF 54,000/ha in credit from SODE-PALM, repayable in 12 years after a seven-year grace period, at 2% interest,which would be capitalized during the grace period. Outgrowers would contractto sell all their produce to SODEPALM, which would deduct the principal andinterest payments due from the sales price. The difference between the fore-casted export prices and the price paid to producers would accrue to SODEPALMand not to the outgrowers, increasing the true interest charge to 9% on thelatter's development loans. Similar incentives have proved adequate in thepast and the outgrowers' repayment record is very good. This credit alloca-tion represents about 54% of the total cost of establishing one hectare ofpalms and would be made up as follows: seedlings, 50%; cash to assist inmaintenance, 22%; cash to assist in land clearing, 15%; and fertilizers, 11%.The balance would be financed by Government and recovered through financi..1surpluses expected from the sale of produce (Annex 9). During negotiationsassurances were obtained that: (a) the credit arrangements would not bechanged further without the prior consent of the Bank; (b) the producer pricewould be maintained at levels consistent with a minimum financial return toGovernment of 7% on its palm oil outgrower program investment.

Coconut Outgrowers

5.10 outgrowers would be selected from the village communities to whichusufruct of the land would be transferred (para 3.05). Holdings would belimited to 4.5 ha per outgrower; compared with up to 25 ha under the ongoingprogram financed by Loan 613-IVC in which hybrid planting material is notused and consequently where net incomes/ha will be substantially lower.

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5.11 The local SODEPALM agent inspects each applicant's farm, checkshis standing in the community and recommends approval or disapproval toheadquarters. Participation is dependent upon the potential outgrower be-coming associated with a group of at least five individuals, who are eitherexisting or potential outgrowers. The group mutually guarantees the creditsobtained by its individual members.

5.12 Because of the precocity and yield potential of the hybrid coconutsthat would be planted under the project, changes to the coconut outgrowers'agreement would be required. As such, the outgrower would repay SODEPALM'sproduction loan of about CFAF 254,000/ha over 19 years after six years ofgrace at 7-1/2% interest instead of at 6% interest as previously (Annex 10).The CFAF 254,000 is made up mainly as follows: land clearing, 50%; insecti-cides and fertilizers, 12%; planting material, 11%. Other components includecash to assist in maintenance, cover crop seeds and labor. An assurance wasobtained that no changes would be made without the consent of the Bank.SODEPALM has tentatively fixed a producer price of CFAF 5/nut delivered toroadside pickup points. Similar arrangements have provided adequate incen-tives to farmers in the past.

5.13 The terms of financing for oil palm outgrowers are those practicedin the past. The terms for coconut outgrowers represent a simplified arrange-ment, and are based on the new, hybrid variety yield and growth potential.

C. Processing Outgrowers Production

5.14 Oil Palms. PALMININDUSTRIE would have sufficient capacity toprocess all envisaged outgrower ffb production with its eight existing mills,and the proposed Dabou mill. PALMINDUSTRIE would provide the transportservices needed to collect outgrower ffb.

5.15 Coconuts. Outgrowers would sell their produce to SODEPALM in theform of nuts delivered to roadside pickup points. They would be transportedto the nearest SODEPALM processing plant, where the nuts would be split, themeat removed and dried into copra. While outgrowers could produce copra;some form of communal processing would be necessary to justify the use ofmodern copra driers, but such communal arrangements would be less efficientthan centralized SODEPALM operations.

D. Marketing

5.16 The production of palm oil and kernels from SODEPALM estates andoutgrowers areas would be marketed by PALMIVOIRE, both directly and throughcontracts concluded with the Belgian commodity trading company SOGESCOL asbroker (Annex 11). These arrangements are in force and are satisfactory.

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5.17 Copra would not be produced in quantity until 1976 and, as dis-cussed in paragraph 6.06, no difficulties are foreseen in disposing of SODE-PALM's production on world markets. During negotiations, assurances wereobtained, however, that marketing arrangements for coconut products would beagreed with the Bank.

5.18 Under present legislation Government's Caisse de Stabilisation etde Soutien des Prix des Productions Agricoles (SCCPPA) is empowered to main-tain steady producer prices for all palm products. So far, CSSPPA has notneeded to support prices. On the contrary, high world prices for oil palmproducts have resulted in its receiving a substantial inflow of funds(CFAF 250 M in 1970) from SODEPALM. The Bank has agreed to CSSPPA interven-

tion in the case of oil palm products (Annex 11). Since no copra is exportedcurrently, CSSPPA's role in stabilizing prices of this commodity has yet tobe determined. Consequently, assurances were obtained during negotiationsthat the role of CSSPPA in stabilizing producer prices for coconut productswould be agreed with the Bank.

VI. YIELDS, OUTPUT, MARKETS AND PRICES, PARTICIPANTS' BENEFITS

A. Yields and Output

6.01 Oil palm outgrowers are estimated to obtain 10.5 tons ffb/ha(21% oil and 5% kernel contents) when their oil palm plantings are mature,nine years after planting. Actual results from existing oil palm outgrowersconfirm the validity of this estimate.

6.02 All oil palms planted under the project would be mature in 1982and from that time project-induced production would average 9,900 tons ofoil and 2,360 tons of kernels annually, both less than 1% of the anticipatedworld trade in these commodities in that year (Annex 12).

6.03 At full maturity (in the eighth year after planting) annual yieldsof copra on SODEPALM estates are estimated to be 3.5 tons/ha, and on out-growers' holdings 3.0 tons/ha. These yields are high by world standards (2tons/ha on the twelfth year after planting) and are made possible by the suc-cess of IRIO in producing a high yielding hybrid. The maintenance of highyields will depend on sustained fertilizer use; this would be standard prac-tice on SODEPALM estates, and among outgrowers.

6.04 All coconuts planted under the project would be mature in 1982,and from that time project-induced output would average about 41,500 tons ofcopra annually (which represents about 2% of the expected world trade bythat year), or 26,700 tons coconut oil equivalent (Annex 12).

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B. Markets and Prices

6.05 Palm Oil and Kernels. ALl palm oil and kernels 1/ produced byproject pla tg.woildbe exported,.since the large internal demanhdfori:Fese products can be more than met by existing supply. Total world pro-duction of palm oil is estimated to be expanding at about 5.5% annually.Production by 1980 is expected to reach about 2.7 M tons and exports 1.9 Mtons (of which the Iv_ry _5DLyouiU.h-ave-about 195 2°° tons or 7%). Demandwill grow more slowly. Therefore, the Bank's Economics Department expectspalm oi iTes,, settle at US$155--165/ton cif Europe in 1975_and in sub.se-quent years. A price of US$160/ton cif Europe, as assumed for the firstproeec6F, has been used for Project purposes (Annex 12). This compares with

(a current price of about_US$270/ton. The principal product of palm kernelss palm kernel oil, which has similar chemical characteristics to coconutoil; consequently, palm kernel prices are expected to drop from a current levelot US$182/ton cif Europe to ,US$145 t,-by 1975, and the latter figure is usedin project calculations as compared to a price of US$136 estimated for thejfiroj ect The full production of kernels from the project, is expected

Lto have a negligible impact on prices for this commodity.

.06 Copra and Coconut Oil. While a small amount of project-producedcopra would be cons,,med dom4estically, the bulk would be e xpofted, in'tly' torEurope, either as coconvtoil or unprocessed copra. Coconut oil and copra

(Intonsof oil equivalent) coprised a t l,ota.J, Drld fats and 'ilproduction in 1967-1969. Production has expanded slowly (0.5% p.a. from1954-1956 to 1967-1969, compared with 3.0% p.a. for all fats and oils pro-duction). Generally, coconuts are a poorly organized smallholder crop witha high proportion of over-aged trees and, so far, not the subject of devel-opment programs, with the exception of the Philippines. The Bank's EconomicsDepartment forecasts that by 1980 world exports of coconut products (oilequivalent) will rise from a current 1.2 M tons to about 1.6-1.7 M tons,principally from increased Philippine production. This expansion in exportswould not take place at past high prices, since import demand would not expandsignificantly above present levels. Consequently, for the economic analysisof the project, a copra pric,-aof US$lgs5-/ton-cif Europe has been used instead

ff_of US$165 for the first proiect. The copra price of US$185/ton is equivalentto US$285/ton coconut oil, which compares with an average price over the lastthree years for this commodity of about US$400/ton (Annex 12).

C. Outgrower Benefits

Oil Palm Outgrowers

6.07 Production would begin in the fourth year after planting when 39working days would be required to maintain and harvest one hectare of oil

1/ An alternative to export as kernels would likely be export of kernel oiland cakes after local processing.

- 23 -

palms and the return per manday would be CFAF 254 (90 US cents). This wouldincrease and reach a maximum of CFAF 772 (US$2.80) wlhen debt service iscompleted in year 19. While lower than that of coconuts, the return oflabor employed is satisfactory compared with the apricultura1 total com-pensation rate of CFAF 310/day and with the return from coffee cultivati.on(the otl ie principai crop In the oil palm zone) of about CFAF 300 (US$1.10)per mauiday. Wlile few otutgrowers cultivate only oil palm most combine oilpalms with coffee and food crops), about 4 ha could be managed by the aver--age farm family, and a mature plantation of thls size would generate a totalannual Income after d1 0'LTUCS$36 atpeai-KproductSi and ab t),UtC_AF1 133 0 USL ,s rj y _,,9 aLter fullrepayment of debt. Some 50 mandavs per hectare per year required_forupkeep and harvesting from year seven (Annex 13, Table 1).

Coconut Outgrowers

6.08 With the first production in the fourth year after planting 9 work-ing days would be required to maintain and harvest one liectare plantedJ withcoconut trees and the return per manday would amount to CFAF 932 (US$3.35)after debt service payment. On an average holding of 4 ha, at pealk produc-tion the total annual income of a farming family after debt service paymentwould amount to approximately CFAF 68,000 (US$250), and abotut CFAF 229,000(US$823) after debt service is completed in year 21 (Annlex 13, Table 2),

D. SO)EPALM and PALMIN)USTRIE Benefits

Oil Palm Outgrowers

6.09 Benefits to SODEIPALM would be restricted to a siall. reductiOln inestate processing costs due to increased througlhput; and benefilts to both en-titles would be the processing fees clhargedl to smallblo](lers )y PjALMINDUSTRIE.

CoconutPProgram

6.10 lDevelopment costs and initial operaLItig del lci tL frenm Coconlut e's-tate ai<d ouLgrower operations would be full.y recovered by 1983. A-nnual SO)DK-PALM cash surpluses froin esLate operat ions before debt service paymelnts(Annex 16*, Tablc 2) woul (1 riseo 1ronii abouIt C:FAF 163 mll I on (US0.O.6 mliLoll) inyear 8 (1979) Lo about CFAF 700 mlIlLLio (US$2.5' millilon) tri year 12 (1985) andtherc ftear. Annual debL repaymenit for the overall cocontat programli total 11111;CFAF 2(64 mlll ton (IJS'l ml Ilion) would begin in 1977 (Annex 14, Table 2).

I)abou. ML_ I

6. I I I tf ope rat I on.i wonI](d b0n)e'f ti tLe wholO ol' I tihe P;i ( IJi plt Loll's sic-t vlv-cs L1iroug,,h I lt; ;real r tlff I (cLecy and proces!;' I n cap)rl ty.

- 24 -

E. Government Benefits

6.12 The Government project cash flow (Annex 15) shows that the cumula-tive deficit at the end of the BSIE grant disbursement period in 1976 wouldbe CFAF 351 million (US$1.3 million). Export duties would become effective

Ifrom 1974 which, together with value added and income tax revenues, wouideeliminate the cumulative ficit,by 1980, and would provide an average annualsurplus of-CFAF 161 million (US$0.6 millio,J1 thereafter. In addition, theGovernment, as the sole shareholder in SODEPALM, would be entitled to receivedividend payments from coconut program profits subject to the overall SODE-PALM financia1 position.

VII. BENEFITS AND JUSTIFICATION

7.01 Primary benefits from the oil palm outgrowers and coconut programcomponents would be the increased production of oil palm and coconut productsand resultant net annual incremental foreign exchange earnings amounting toabout US$5.8 M by 1983. Based on expected world prices for these commoditiesthe returns to the economy from the project investments are estimated to beas follows: oil palm outgrowers 17%, coconut estates 18%, and coconut out-growers 16% (Annex 16).

7.02 In calculating the above, all labor used in coconut estates hasbeen costed at the average o,fficijl rate, CFAF-_31l6manday. This amount in-cludes fringpZbpa,e$fits, and an allowance for supervisors such as foremen.For outgrowers, however, where the proportions of hired and family labor areimpoiss1Vl6_to-determine, a cost of CFAF lOiOmanday has been used for all labord4ueh-tefoe-iowtng: (a) this is t'he subsistence gps ,I.abt; (b)- casa-alj9 .abnx employed on a daily basis when needed receives much lower-rates than on-SODEPALM estates; and (c) most farm families have labor in excess of the needsiC~fiitr ~firms.~ If all labor on"outgrowers plantings were costP_at_cashates paid on SODEPALM estates, the rate of return would be: oil palm out-growers 13% and coconut outgrowers 15%. Details of the calculation are givenat Annex 16, which includes an analysis of the sensitivity of the rates ofreturn to changes in costs and benefits, and in the case of the coconut com-ponents, to varying lengths of project life. As shown below, all project com-ponents are most-q-nsitive to change in the value of output/ha, the value of Aoutput being influenced by both yields and prices.

Returns (%)Output/ha 90% 110%

Oil palm outgrowers 14.5 19.7Coconut estates 16.2 19.9

2; Coconut outgrowers 14.6 18.0

'i,J 7.03 The mill would serve both oil palm outgrowers and oil palm estates.The internal economic rate of return has been calculated to be 17% for thenew palm oil mill (Annex 6, Table 1). The alternatives to construction of a

- 25 -

new mill are examined (Annex 6); the analysis shows that commissioning a newmill in 1972 is slightly more expensive than the closest alternative, butthat the slight cost disadvantage is more than outweighed by considerationsof operational simplicity which are not easily quantifiable in financialterms.

7.04 The project would have substantial secondary benefits through pro-viding work for some 1,800 persons on the coconut estates and for about 100persons in the mill and increasing the incomes of about 2,300 outgrower fami-lies. Additionally, it would further the Government's program of agriculturaldiversification.

VIII. RECOMIFNDATIONS

8.01 During loan negotiations, agreement was reachesl on the followingpr'incipal points:

(a) SODEPALM and PALMIVOIRE would: (i) m.ake Proposals satisfac-tory to the Bank on measures to ensure the strength and con-tinuity of management. These measures would include decen-tralization, to the extent necessary, of the day-to-dayoperations to the regional level; (ii) submit their proposalsand an implementation plan to the Bank not later than December31, 1972; and (iii) implement these proposals as agreed withthe Bank prior to the closing date (para 5.01);

(b) SODEPALM and PALMIVOIRE would: (i) review, in consultationwith the Bank, their management training facilities and pro-grams; and (ii) would adopt not later than January 1, 1971,and subsequently implement, a phased program, satisfactoryto the Bank, for the management training and recruitment ofnationals of the Ivory Coast (para 5.01);

(c) appointments to the key posts of General Manager, AssistantGeneral Manager and Chief Loan Officer of SODEPALM (para5.02); and of General Manager, Technical Department Manager,Chief Financial Officer, and Chief engineer-oil mills ofPALMIVOIRE (para 5.06) would be made only with Bank agree-ment;

(d) credit arrangements for oil palm outgrowers would not bechanged without the prior consent of the Bank; the producerprice would be maintained at levels consistent with a mini-mum financial return to Government of 7% on its oil palm out-grower program investment (para 5.09); and

(e) credit arrangements for coconut outgrowers would not bechanged without the prior consent of the Bank (para 5.12).

- 26 -

8.02 A condition of signing the loan to PALMINDUSTRIE is that Governmentwould 'issue a decree, and IRHO would sign an agreement with PALMINDUSTRIE-PALMIVOIRE to close their respective mills, and to process their ffb at thieprojected Dabou mill (para 3.21).

8.03 The project is suittblSe for two Bank loans: one to SODEPALM forUS$5.1 million repayable over 15 yiears after six years of grace; and anotherto PALMINDUSTRIE for US$1.9 miklidn repayable over 15 years after four yearsof grace. Grace periods would only apply to capital repayments.

May 20, 1971

ANNEX 1Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

PROGRESS OF LOANS IVC-611, 612, 613) AND 686

A. Loan 611 IVC PALMIVOIRE US$3.3 Million Equivalent

1. Ehania Oil Palm estate plantings (4,000 ha) have been on schedule(see Chart), and planting will be completed as planned in 1971. Planting

has been of a high standard, and subsequent plantation maintenance issatisfactory. Planting costs have been slightly lower than estimated atthe time of appraisal.

B. Loan 612 IVC PALMINDUSTRIE US$4.8 Million Equivalent

2. The project comprised the construction of a palm oil mill toservice the 10,000 ha, Ehania Estate, and some associated outgrowers. Thefirst phase of mill construction was completed two months after the appraisalreport target date. Orders have been placed with de Wecker to expand themill to 40 ton/hr. The mill functions satisfactorily, and costs have beenwithin appraisal estimates.

C. Loan 613 IVC SODEPALM US$9.0 Million Equivalent

3. Oil palm plantings by outgrowers are only 67% (8,072 ha comparedwith 12,000 ha) of appraisal targets (see Chart). This is a consequence ofapplying more stringent selection criteria for growers. The plantingprogram will be completed in 1972, two years behind schedule.

4. Coconut estate plantings (3,500 ha) have been completed on schedule,but outgrower plantings have been reduced because of a shortage of satisfactoryplanting material (see Chart), and a shortfall of 420 ha remains to be plant-ed. Plantings will be completed in 1971.

5. Tile standards of planting and maintenance for outgrower coconutsand oil palms and of SODEPALM coconut estates have been satisfactory.

D. Disbursements

6. At appraisal it was estimated that by March 31, 1971 disbursementsagainst Loans IVC-611, -612, -613 would have reached US$6.2 million. Inpractice, actual disbursements at April 10, 1971 were only US$2.6 million.The slow rate of disbursement of the Bank loans has been permitted by thevery favorable cash flow that has resulted from the relatively high pricesreceived for palm oil and kernels in recent years, and also because SODE-PALM and PALMINDUSTRIE have been able to borrow at low rates of interest.Government has been requested to take steps to draw down the Bank loans

ANNEX 1Page 2

more quickly; and indications are that the pace of disbursement will accele-rate rapidly within the next 12 months.

E. Loan 686 IVC US$7.5 Million Equivalent

7. This project involves the new planting of about 18,830 ha ofcocoa and the rehabilitation of 30,000 ha of young cocoa. The projectbecame effective on November 27, and to date project activities have beenrestricted to preparing for the 1971 season. No requests for disbursementhave been made.

ANNEX 1CHART I

IV OR Y CO AST

SECOND OIL PALM AND COCONUT PROJECTPROGRESS OF PLANTINGS SCHEDULED UNDER

LOANS IVC 611 AND 613

ha4,500 -

4,000 -

3,50 0-

3,.000

2,50 0

2,000

1,5 0 0

1,00 0

500

1968 1969 1970 1968 1969 1970OIL PALM ESTATES OIL PALM OUTGROWERS

(LOAN IVC611) (LOAN IVC 613)ha

2,00 0

1,5 00

1,00 0

500

1968 1969 1970 1969 1970COCONUT ESTATES COCONUT OUTGROWERS

LOAN IVC 613) (LOAN IVC 613)

TARGETS IE ACTUAL PLANTINGS/// I l ~~~~~~~~~~~~~~~~~~~I BRD-5702(R)

ANNEX 2

Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

PROJECT ENTITIES

1. Three principal entities are involved: SODEPALM, PALMINDUSTRIEand PALMIVOIR¢. For the purpose of managing the Ivory Coast's oil estatesand palm oil mill programns the three companies are combined in an "Associa-tion in Participation" (the Participation). In the case of the proposedproject, the Participation would be concerned only witlh the Dabou mill andwith the outgrowers oil palm plantings. Both SODEPALM and PALMIVOIREwould be concerned with the coconut estate, coconut outgrower and oil palmoutgrower components of the project, but PALMIVOIRE only because certainofficials of this corporation are also officials of SODEPALM -- principallyMr. Fraisse, who is General Manager of botlh corporations, and his immediateaides; and because PALMIVOIRE maintains SODEPALM's accounts and providesother specialized services.

2. Until mid-1969, SODEPALM owned and operated all oil palm estates,palm oil mills, and coconut estates establislhed under the Government's oilpalm and coconut programs, and was responsible for oil palnm and coconutoutgrower schemes. In 1969, however, two new companies were formed: PALM-INDUSTRIE, to take over ownership of the SODEPALM palm oil mills and toconstruct new milling facilities as required; and PALMIVOIRE, to manage thePALMINDUSTRIE mills and the SODEPALM oil palm estates, and to provide SODE-PALM with specialized services for the latter's continued management of itscoconut estates and outtgrower programs. The 1969 changes were mnade to per-mit the introduction of private investment in the counrtry's oil palm devel-opment program through the sale of shares in PALMINDUSTRIE and PALMIVOIREboth to foreign companies, and Ivorian companies and individuals, and there--by to initroduce a profit-oriented element in the management of the program.

A. The Association in Participation

3. On establishmnent of the two new corporations. SODEPALM, PALMINDUS-TRIE and IPALMIVOIRE entered into a Contract of Association in Participation(a form of joint venture) oni October 31, 1969, for the (development andoperation of the industrini oil palm estates and of thie mills. PALMIVOIREcollects, processes and sells oil palm outgrowers production, but develop-ment and supervision of oil palm outgrowers' holdings remain the responsi-bility of SODEPALM.

4. The contract of association 1has an initial life of 30 years. sub-ject to termination after 1,, 20 or 25 years. Under its terms, PALMIVOIREmanages and admninisters tlie Association in Participationi, and SODEPALM and

ANNEX 2Page 2

PALMINDUSTRIE have executed separate mandates authorizing PALMIVOIUE to

administer their palm oil industrv assets and to carry on their respective

operations. The mandates specify the programs for oil palm estate develop-

ment and for the construction of oil mills. The powers delegated to PALMI-

VOIRE are also embodied in the mandates, and cover the employmnent and re-

moval of personnel, authority to purchase, to lease and to hire; executionof contracts; collection of debts and payment of dues; opening and operat-ing bank accounts; and preparation of accounts. However, each company re-tains ownership of, and control of, the ultimate disposition of its assetsand is responsible individually for its debt service.

5. The accounts of the Participation are kept by PALMIVOIRE, and acommon operating account is prepared annually and is made up as follows:

Credit: sales revenuesprocessing fees received from outgrowers

Debit: all expenses and management charges, excluding:

(a) investment costs(b) interest on long- and medium-term loans(c) income and company taxes(d) costs directly attributable to the individual

companies -- for example, Council members'fees.

6. Profits and losses of the Participation are divided among thethree companies on the basis of the relative contributions made by them inthe way of assets, both fixed and current, placed at the disposal of the

Participation.

7. PALMIVOIRE is remunerated for management services under a slidingscale formula based on the positive results of the Participation. Duringthe first five years of development,, when there will be no profits, PALMI-VOIRE will receive a management fee of CFAF 30 million annually from SODE-PALM and PALMINDUSTRIE. This fee is deducted from the future profits ofthe Participation before the distribution of these to the three companiesis determined. Actual and estimated operating accounts of the Participationappear in Table 6.

8. The Council of Administration, or Board of Directors, of the Par-ticipation consists of nine members. The Government is represented byfive members (three from SODEPAI24, one from PALMINDUSTRIE and one from

PALMIVOIRE), private Ivorian shareholders by one member, and foreign and

Ivorian private companies (the Technical Group) by three members. Resolu-

tions of the Council of Administration require a majority of more than two-

thirds of those present and voting. The principal function of the Council

of Administration of the Participation is to define general policy, and toapprove the annual budget and other accounts of the Participation.

ANNEX 2

Page 3

B. SODEPALM

Constitution

9. SODEPALM (Societe pour le Developpement et i'Exploitation duPalmier a Huile) was created by Decree No. 63-467 of November 7, 1963 as astatutory corporation ("societe d'Etat"). Its objectives are: (a) to in-vestigate the problems of and make proposals on, the development of bothcoconut and oil palm; (b) to participate directly with capital managementand administrative staff, or indirectly through the coordination, or direc-tion of the various public and private bodies interested in coconuts andin oil palms. The original Decree was amended in September 1966 to bringmembership of the Council of Administration in line with ministerial re-groupings.

10. SODEPALM's affairs are directed by a Council of Administration of10 members. These are: two representatives each of the National Assemblyand of the Minicter of Agriculture, and one each from the Economic andSocial Council, the Minister of the Armed Forces and the Civil Service, theMinister of Economic Affairs and Finance, the Minister of Planning, theInstitut de Recherche pour les Huiles et Oleagineux (IRHO), and the privatesector. Members are nominated for three years but this period can be ex-tended. Members receive no fees, but are entitled to expenses at fixedrates. Meetings are held as required, in practice generallv twice a year.Alternates are allowed, and the President, who is elected from among themembers, can vote. The Council has powers to carry out all the usual busi-

ness of a company, including the disposal of its funds. Minutes of eachmeeting have to be handed to the Minister of Agriculture within eight daysof the meeting.

11. In common with all companies with a 40% or more Government share-holding, SODEPALM is subject to the control of a Government Commissionerappointed by the Minister of Planning. The Commissioner has the right toattend all Council meetings, to investigate SODEPALM's affairs, and to sus-pend any decision of the Council. In practice, he acts as a liaison officerfor the Government. Assurances have been obtained from the Government, how-ever, that the Commissioner would not intervene in the day-to-day managementor act in a way detrimental to the efficient carrying out of the project.These assurances have also been given in connection with the Commissionersappointed to PALMINDUSTRIE and PALMIVOIRE. The Bank also obtained amend-ments to the statutes of SODEPALM in 1968 when the first loan for oil palmand coconut development was negotiated. These restricted the ability ofMinisters of the Governmnent to interfere unduly in the day-to-day affairs of

SODEPALM, and ensured that Ministers exercised their supervisory responsi-bilities indirectly thirough their representatives on the Council of SODEPALM.

12. SODEPALM started with a fixe(I capital ("capital social") ofCFAY 50 million whichi has since been raised to CFAF 400 million (US$1.4 mil-lion). SODEPALM is subject to the same laws applicable to limited liabilitycompanies ("societe anonyme"), but any land required to carry out its objec-

ANNEX 2Page 4

tives can be expropriatedl under the Liws covering public utillties. Itshead office is in Abidjan, and it is empowered to open branch offices asrequired. Accounts are kept in accordance with commercial practice by aspecial section in PALMIVOIRE under the latter's Direction of Accounts.The fiscal year ends December 31. Two auditors are appointed by the Minis-ter of Economic Affairs and Finance (in practice one is from the GovernmentAudit Department and the other is a private firm of auditors, SocieteFiduciaire France-Afrique). Accounts remain provisional until approved bythe Minister, and submitted to thie National Assembly together with an annualreport. This must be withlin tlhree months of the end of each fiscal year.Administration is in the hands of a Director nominated by the Council.

Administration

13. The President is Mr. Joseph Anoma, a former Minister of Agricul-ture, and the General Manager is Mr. Andre Fraisse, who is also GeneralManager of PALMIVOIRE. Mr. Amagou iLs Deputy General Manager and responsibleto Mr. Fraisse for direct SODEPALM operations, i.e., coconut estates andoutgrowers and oil palm outgrowers. The organization of SODEPALM and itsrelationship with PALMIVOIRE is shown by the Chart. Essentially, SODEPALMhas two operating divisions, Coconuts and Oilpalms, and these are subdividedinto estate and outgrower sections. In the oil palm estate section, estatemanagers report to PALMIVOIRE.

Financial Arrangements

14. SODEPALM has derived its development funds from four main sources.First, its fixed capital of CFAF 400 million has been provided wholly by theGovernment. Second, grants, partly from the Government and partly from FED.Government grants are -rovided through the Budget Special d'Investissement(BSIE) -- that part of the annual Government budget which provides for cap-ital expenditure. As at the end of August 1970, the total amount receivedfrom this source was CFAF 019.3 million. FED grants have been made lunderAgreemnentc 183 and 331, and the total amount received up to the end of 197nwas CFAF 9,525 million. Third, a long-term loan from Caicse Autonomed'Anmortissement (CAA) 1/ which at the end of 1970 amounted to CFAF 452.1million. Fourth. loans (IVC-611 and 613) from the bank made in 1969 andamounting to CFAF 3.515 billion (US$12.6 million equivalent), and from theCaisse Centrale de Cooperation Economique (CCCE) for CFAF 1.4 billion tofinance the "First Oil Palm and Coconut Project". SODEPALM also has ac-counts with four conummercial banks, and is able to obtain short-term fundswlhen required. SODEPALM also has overdraft facilities with CAA up toCFAF 1.4 billion at 4-1/2% interest. It has no mortgages or other chargeson its assets.

1/ CAA: created by Government Decree in 1959 as an autonomous public in-stitution to administer and manage the public debt and to act as bankerfor other public institutions.

ANNEX 2Page 5

15. Lotal SODEPALM investment at November 30, 1970 was CFAF 11.360

billion (US$40,862,000 equivalent) out of which CFAF 10,421 billion

(US$37,480,000 equivalent) are in assets placed at the disposal of the Par-

ticipation. Balance sheets for the year ending December 31, 1964 through

1970 are at Table 1 and forecast cash flows at Tables 2 through 4.

C. PALMINDUSTRIE

Constitutioni

16. PALMINDUSTRIE is a private limited liability company ("societe

anonyme"). The objectives of the company are the processing and sale of

oil palm products and by-products. Consequently, it owns the palm oil mills

required to process the production from existing and planned SODEPALM es-

tates and associated outgrowers. Eight mills have been constructed; a ninth

would be the proposed Dabou mill.

Financing ArranZements

17. The share capital of the company is CFAF 2.5 billion (approximate-

ly US$9.0 million), and has been subscribed as follows:

CFAF US$ MillionMillions Ejuivalent _

A. Shares - Ivory Coast Government 1,810 6.5 72.4

B. Shares - Technical GroupSOCESCOL /1 230BLOHORN 144Private Banking Interests 86 460 1.7 18.4

C. Shares - Ivorian Private GroupSONAFI /2 230 0.8 9.2

2,500 9.0 100

/1 Witlhin the SOGESCOL group, the sharehiolders in PALMINDUSTRIE and PALMI-

VOIRE are: Plantations des Terres Rouges, Societe Forestiere Equatori-

ale and Societe d'Etude et de Developpement de la Culture Bananiere

(sCB). SOGESCOL is a subsidiary of SOCFIN (Societe Financiere)./2 Societe Nationale de Financement: a Government-owned investment insti-

tution whiichl has taken up the shares and subsequently will sell them to

private investors.

Government subscribed CFAF 350 million in kind, and CFAE 1,460 million in

cash. For its programs PALMINDUSTRIE has obtained several loans from BEI,

CCCE, IBRD and CAA. Further details are provided in the cash flow at Table

5.

ANNEX 2I'age 6

Council of Administration

18. The affairs of PALMINDUSTRIE are under the direction of a Councilof Administration consisting of nine members, six representing the Governmentand three representing the private shareholders. A simple majority of thosepresent is required for those resolutions. The President is selected fromamong the members. A Government Commissioner has been appointed with simi-lar rights as those of the Commissioner appointed to SODEPAL4 (see para 11).PALMINDUSTRIE has no staff.

D. PALMIVOIRE

Constitution

19. PALMIVOIRE is a private company and its main objectives are:

(a) to provide all services required for the cultivation andprocessing of oil palms, and other oil producing crops;and for the sale of oil and of any bv-products derivedfrom such crops; and

(b) to manaze agricultural unclertakings including processinginstallations.

Council of Administration

20. The Council of Administration of PALMIVOIRE consists of 12 members,four repreqenting the Government (A Shares), six representing the technicalgroup (b Shares), and two representing the private Ivorian shareholders (CShares). A simple majority is required for resolutions passed by the Coun-cil. It is mandatorv for the President to be elected froni the A Sharehold-ers, but he cannot vote. The statutes provide for the delegation of powersnecessary for technical, commercial and financial operations, under programsapproved by the Council, to an executive committee ("Conseil restreint"),comprised of six members resident in the Ivory Coast. Of the six members ofthe executive committee two represent the Government (A Shares), three rep-resent the teclnical group (B Shares), and one represents the private Ivorianshiareholders (C Shares). Resolutions passed by the executive committee re-quire a majority of four votes wlhich ensure the degree of autonomy considerednecessary for the efficient operation of PALMIVOIRE. As in the case of theother two companies a Government Commissioner has been appointed to PALMI-VOIRE.

Finacing Arrangements

21. The initial share capital of the company is CFAF 50 million (ap-proximately US$180,000), and has been subscribed as follows:

ANNEX 2Page 7

CFAF US$ MillionMillions Equivalent

A. Shares - Ivory Coast Government 20 72 40

B. Shares - Technical GroupSOGESCOL 10BLOHORN 6Private Banking Interests 4 20 72 40

C. Shares - Ivorian Private GroupSONAFI 10 36 20

50 180 100

As a management company PALMIVOIRE does not require additional funds, exceptthe occasional use of bank overdraft facilities. The profit and loss ac-

counts of the Participation are in Table 6 and the summarized cash position

of SODEPALM, PALMINDUSTRIE and oil palm outgrowers is in Table 7.

IVORY COAST

SECOND OIL PALM AND COCOIN T PHOJECT

SODEPALM

BALANCE SHEETS AS AT DECEER 31, 1965 THROUGH 1969

(CFAF MILLIONS)

1965 1966 1967 1968 1969

ASSETS

Fixed Assets (Net)

Vehicles, including 78.o 116.0 189.0 288.8 345.1agricultural machinery

Installation, furniture and equipment 50.0 77.0 142.0 200.7 232.8Buildings and bridges 90.0 214.0 457.0 567.3 887.1Oil mills - 218.0 - 405.0 165.0 953.0 608.6 1,665.4 - 1,465.0

Agricultural Development

Estates: Oil palm 1,475.0 2,453.0 4,098.0 6,763.0 6,312.7Coconut - 1,475.0 - . 2,453.0 56.0 4,154.0 242.1 5,005.1 195.6 6,508.3

Outgrowers; Oil palm 165.0 350.0 808.6 1,099.4 751.8Coconut - 165.0 - 350.0 0.5 809.0 16.7 1,116.1 126.1 877.9

Unallocated Expenditure 245.0 539.0 426.0 838.8 732.0

Total Fixed Assets 2,103.0 3,747.0 6,342.0 8,625.4 9,583.2

Current Assets 331.0 438.0 547.0 659.6 1,415.0Less current liabilities 120.0 211.0 120.0 318.0 518.0 29.0 476.5 185.1 304.4 1,110.6

Losses ___ _ 81.2 125.4

TOTAL ASSETS 2,314.0 4,065.0 6,371.0 8,89 .7 10,819.2

L4ABILITIFS

Shareholders Funds

Share capital 87.0 162.0 200.0 400.0 400.0Reserves 30.0 195.0 278.0 - - 400.0

Total 117.0 357.0 478.0 400.0

Grants

BSIE 305.0 324.0 1,148.0 1,253.5 2,027.6FED: Agreement 183 525.0 708.0 814.0 1,226.4 879.1

Agreemnt 331 951.0 2,260.0 3,551.0 4,888.6 6,368.1

Loans Total 1,781.0 3,292.0 5,513.0 7,366.5 9,274.6

CAA 416.0 416.0 380.0 504.5 476.7Others - 416.0 - 416.0 - 380.0 620.7 1,125.2 667.9 1,144.6

TOTAL LIA3ILITIES 2,314.0 _,3710 8,891.7 lo819.2

April 8, 1971

IVORY COAOT

S'C"""L oIL PA1,1 10 CON7 PRoJ0P7

SODEPALM

UPDATED ETIHAT2D CASH FL09 1971 -I-983

0IL PALM8 E3TATES-'

(CFAF MaLLION0)

1971 1972 1973 lolL 1975 1976 1977 1978 1979 1980 1980 1982 1983

SOURCES OF FUND1

LOANS: M.,iu- and long tero

CCCE (Ehanie FEtate) 106.6 47.5 78.3 32.1 -I88D (Ehanis Estste) 311.6 204.8 108.9 61.9FED 331 57.4 7.8 - _ _FED/BRI 331 112.0 42.8 - - -FED 183 - -B3IE 145.5 122.3 _

733.i 425.2 187.2 97.0 _

LOANS: Short ter-

FED 331 63.2 - -CAA - 10_.0

63.2 100.0 - -88018726j2 W. - - -

GRANTS _

SELF-GENERATED FU8NDS8

Share fO partitipation profit 234.8 67.0 160.9 010.8 685.9 848.6 91,6.8 933.6 958.6 1,W02.. 1,027.4 1,067.5 1,067.5D.pre-iation 204.1 347.0 17979 588.7 676.3 729.5 760.7 772.8 776.6 774.6 774.6 774.6 774.6

TOTAL 5030RCE 765.6 939.2 8337.0 1,127.5 1,362.2 1.578.1 1;707 5 1,7006. 1,733.2 1,777.0 1.8C2.0 1,842.1 1,842.1

APPLICATION OF FU787

0OST OF DEVELOPMEBNT (Estates) 583.7 273.9 216.0 62.9 72.5 ]9.2 18.0 13.8

RENI7ALS 28.0 74.7 83.1 74.7 73.6 93.5 84.9 80.8 80.8 80.8 80.8 80.8 80.0VJehicles and agriclnol-ooe.qip-ent

WORKING CAPITAL 13.1 10.0 10.7 6.6 4.8 3.7 S.1 8.2 - - - - -

PALMIVOIRE MANAOGEENT FEE3 18.0 18.0 18.0642.8 376.6 327.9 114.2 150.9 116.1, 108.0 102.8 80.8 80.8 80.8 80.8 8-0.d

DEST SERVIOCE: edio and Slong

CCCE (Ehania fstate) 8.9 12.1 11l.8 17.2 45.6 41.1 43.2 62.0 .0.8 39.6 38.4 37.2 36.oIBD (EhahAa aLsate) - - - - 87.9 87.9 87.9 87.9 87.9 87.9 87.9 87.9 87.9FEL/BEI 331 16.0 17.5 18.0 81.7 81.7 81.7 81.7 81.7 81.7 81.7 01.7 81.7FER (0.80F/kg) 127.8 194.3 252.. 298.5 331.8 347.1 350.0 353.0 350.0 350.0 350.0 358.0 358.8FER (Othor) - - - 310.0 3.0 - - - - - _

152.7 223.9 288.2 657.6 817.0 561.1 562.8 561.6 560.6 559.2 558.0 556.8 585.6

iEi3 SERVICE, Sho-t tl.. ioane

FED 331 - 139.6 -CAA - - 100.O -

- 139.6 10O.C _ _

TOTAL APPLICATION 795.5 710.1 713.0 811.6 997.9 677.1 671 ] 66.1, 6411 2 64c.0 638 8 637.6 636.4

ANNTUAL CASH /URPLUS OR (DEFIIT) (29.9) 1l9.1 124.0 285.9 364,.3 900.6 1,036.0 1,1042.0 1,092.0 1,137.0 1,163.2 1,204.5 1,205.7 el

CIMIILATIV CASH S38PL9 88 OEpR910CT) (180.8) 18.3 142.J 428.2 792. 1,693.1 2,729.2 3,701.2 4,863.2 6,000.2 7,163.6 8,361.9 9,573.6SLc-. 31, 1970: -lSO)

April 3, 1971

/ For -oigiol proje-oni- -e Repart 0-6403C dated April 25, 1969 (Annex 1, Table 2) First Ieer Cbet Oil PeOn and Cnoonut Pejeo,t (Lnane 610, 612, 613 IVC).

2/ Ogoing prog-an only. Sr=ry in at Annex 2, Table 7, -nd Se-ond C-o, 00ad Oil Palj pr,oJct cas floas are at A-0,x . , Tables 1 and 2.

IVORY COAST

SECOND OIL PALM ANID COCN01T PDOJECT

SODEPALM

UPDATEIS ESTIMATED CASH FLWJ 1971. 1 983i/

COCONUT P20Rk

(CFAF XTLLIO L )

1971 1979 1973 197h 1975 1976 1977 1978 1079 1980 1982 1982 1983

SOURECg OF F01NDS

FAC (300 H.) - - - - _ _ _CCCE (700 E) 6.6 6.5 6.7 1.8 - - - - - - - -CCCE (6,540 Ha) 82.7 64.3 50.1 71.17 - - - _ _ _ _IBED (6,500 H.) 300.0 318.5 69.9 87.1 - - - - - - - -

GRANiTS

BIE - - - 13.1 142.6 143.0 156.4,

SALS3

Copra 50100 p0000020 - _ 0.2 6.4 44.5 158.4 290.1 390.7 435.7 4h9.6 453.2 453.2 653.2

SIRTMBURSE2EHT OF LoAN3

o,tgEFoor - - - - - - 10.0 .1.4 64.2 64.2 6h.2 66.2 64.2

REIMBU8SENMNT - COST OF SUPSIRVIS DN

Project HotgE o..re - - - o - 0.4 2.9 7.6 10.4 11.5 11.9 11.9 11.9OtheT on1g.oere - _ _ 22.5 23.. 2h.3 25.2 25.2 25.2 25.2 25.2 25.2 25.2

SELF-OENSHATZD FUNL3D

Depreciation (10... RoAe0la) - - - 69.8 42.0 38.6 63.1 46.8 66.3 52.8 49.9 69.9 69.9

TOTAL SOURCES 389.3 389.3 126.9 272.6 256.5 364.7 527.7 511.7 579.8 603.3 604.4 604.4 604.4

APPLICATI3N OF FONUS

DEVELOP.MIT C3OTS

6,500 H. (ecludig t.x-o) 163.5 150.1 159.1 172.6 160.2 114.6 15.7 31.4 31.6 47.11,000 h. (1old3iEg ta.e,) _4.9 15.1 15.8 12.5 - - - - -Maintearg-e of bu lding. 2.8 4.8 5.8 5.6 3.3 1.3 - -

SAPFLITTTION COSTS - - 91.5 120.8 l6.3 267.9 297.0 312.h 318.6 321.9 321.9 321.9

U3XT DESRYCE

Loan InteretFAC (300 Ha) 1.6 1.4 1.4 1.4 1.4 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7ICCH (700 H-) 6.2 6.1 6.7 0.7 6.3 5.8 5, 4.9 4.5 4.0 3.5 3.1 3.1COCS (6,500 18) 11.6 16.7 17.1 19.7 20.9 19.5 18.1 16.6 15.2 13.8 12.41 11.0 11.0Short terA 0.1 0.4 0.8 1.1 1.1 1.2 1.2 1.2

5oe37B9elt sf 891097896FAC D300 Ea0 1.9 6.9 4.9 6.9 6.9 6.9 h.9 L.9CCCE (700 Ha) 13.1 13.1 13.0 13.1 13.1 13.0 13.1 13.1 13.0 13.1COOT (6,0oo Ha) 33.3 33.3 33.4 33.3 33.3 33.6 33.3 33.3 33.h

LEED 122.6 122.6 122.6 122.6 122.6 122.6 122.6 122.6 122.6

TOTAL APPLICATIONS 200.1 192.5 205.9 323.1 601.9 502.8 482.8 525.8 539.5 559.6 513.8 511.8 512.9

ANNUAL C1AS1 SURPLUS OR DEFICIT 188.9 196.8 (79.0) (50.7) (225.4) (13801) 44.9 (14.1) 40.3 43.7 90.6 92.6 92.5

CUMULATIVE CASE SIHPTL.S OR DEFICIT y5.9 290.7 213.7 163.0 (62.6) (290.59 (155.6) (169.7) (129.6) (05.7) 4.9 97.5 190.0(D.c. 31, 1970 -93.0)

F, Fr,iai-1 pr-j-otlsn T00 report 70-603c d2t0d April 25, 1969 (Ao.nx I - table 3) firot Ivury Coat01l Palo and Coconut Project (Loans 611, 612, 613 IVC).Dogoing progroll Holy. 000,ary is at Annex 2, tlble 7 and second C0co00t and Oil PolD Project Coohflo00 non at Anneo 14, tAblen 0 and 2.

Ap0il 0, 1971

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

SOGRPALM

UPDATED ESTIMATED CASH FLOW 1971 - 19831/

OIL PAIM OUTGROWER PROGR24M/

(CFAF MILLIONS)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

SOURCES OF FUNDS

LOANS

IiRD 309.5 171.7 161.4 - . - - - - - -

CCCE (3,000 Ha) - -OCCE (12,000 Ha) 128.7 86,2

GRANTS

FED 183 - -BSIE - - - - -

SALES

Palm oil and kernels 312.5 550.1 902.3 1,212.4 1,510.8 1,777.8 1,964.9 2,045.1 2,106.9 2,150.0 2,164.0 2,181.1 2,181.1

ffb 83.2 85.3 46.1 51.1 59.7 67.6 72.4 76.0 78.7 80.4 80.4 80.4 8o.4

LOAN REPAYMENTS

By outgrowers 20.3 34.7 54.4 79.6 104.2 127.4 147.8 162.6 169.7 165.4 153.2 131.6 120.0

PER (CFAF 63,800/Ha) - - - 9.1 20.4 41.9 70.2 89.1 102.3 106.8 106.9 106.8 106.9

TOTAL SOURCES 854.2 928.0 13164.2 1.352.2 i,695.1 2,014.7 2.225.3 2,372.8 2,457.6 2,502.6 2,504.4 2,500.o 2.488.4

APPLICATION OF FUNDS

MANAGEMENT AND SUPERVISORY 130.3 193.3 227.9 262.2 300.3 338.4 360.7 373.4 365.8 365.5 339.9 337.3 337.3

FIELD DEVELOPMDNT 356.o 165.9 99.1 47.7 - - - - - - - - -

PURCHASE OF FFB 211.6 322.3 448.6 581.1 715.9 837.5 923.1 982.7 1,011.9 1,027.4 1,032.3 1,039.5 1,039.5

PROCESSING COSTS AND FEE 176.4 258.6 370.7 513.7 652.5 784.8 868.9 917.9 938.8 935.0 925.2 918.7 918.7

DEBT SERVICE

ISRD - - - - 105.9 105.9 105.9 105.9 105.9 105.9 105.9 105.9 105.9

OCCE (3,000 Ha) 13.5 13.5 13.5 51.8 50.4 49.1 47.7 46.4 45.0 43.7 42.3 41.0 40.0

CCCE (12,000 Ma) 17.4 20.0 21.3 21.7 55.3 53.9 52.4 51.0 49.6 48.1 46.6 45.2 43.7

PER (or Grants) 4.4 10.3 21.7 29.8 41.6 48.6 53.5 56.1 53.2 47.4 38.1 19.2 10.0

Short term 1.7 2.7 3.7 6.3 7.6 9.0 9.8 10.0 10.0 10.0 10.0 10.0 10.0

37.0 46.5 60.2 109.6 260. - 266.5 269.3 269.4 263.7 255.1 242.9 221.3 209.6

ORKING CAPITAL 17.2 20.1 28.2 25.5 16.2 11.8 5.2 1.3 - - - - -

TOTAL APPICATIONS 928.5 1,006.7 1,234.7 1.539.8 1,945.7 2,239.0 2,427.2 2,544.7 2,580.2 2,580.3 2,540.3 2,516.8 2,505.1

ANNUAL CASH SURPLUS OR DEFICIT (74.3) (78.7) (70.5) (187.6) (250.6) (224.3) (171.9) (171.9) (122.6) (80.4) (35.9) (16.8) (16.7) PI|

CIINIlATIVE CASH SURPLUS OR DEFICIT (175.2) (253.9) (324.4) (512.0) (762.6) (986.9) (1,158.8) (1,330.7) (1,453.3) (1,533.7) (1,569.6) (1,586.4) (1,603.1) a-I

(Gao. 31, 1970: -100.9)

For original proJection see Report TO-630c dated April 25, 1969 (Annex 1, table 3) first Ivory Coast

Oil Palm and Coconut Project (Loans 611, 612, 613 IVC).Ongoing program only. Suamnary is at Annex 2, table 7 and second Coconut and Oil Palm Project Cash

flows are at Annex 14, tables 1 and 2.

April 8, 1971

TVORY COAST

SEOCND OIL PALM AND COCONUT PROJECT

PALMTNDUSTTRIE

ItP81TED ESTIMATED CASS FLOW ly71 -

(CFAF MILLIONS)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

SOURCES OF FUNDS

EO UITY

lst Proj. Government 293.8 273.7Private 129.3 129.3

LOANS

Ist Proj. BSIE 100.0 100.0 200.0CAA (Cong ter,n) 89.0CAA (Medium term) 100.0BET 1,1l0.0 379.6 225.0CCCE 132.0 132.0 75.0IBRIJ 723.1 201.5 49.2 230.2

2nd Proj. CCCE 76.7 222.1 172.5 62.9IBRD 230.6 233.7 135.4 34.5

SELF-GENRMATED FUNDS

Share of participation profits (116.9) 39.5 105.3 293.1 477.5 606.9 653.3 622.2 609.7 598.0 565.6 530.5 530.5Depreciation 211.3 346.8 542.2 685.4 800.5 884.2 935.0 957.9 965.0 965.0 965.0 965.0 965.o

TOTAL SO0RC55 2,659 9 1,936.7 1,404.6 1,406.1 1,478.0 1,491.1 1.588.3 1,580.3 1,574.7 1,563.0 1,530.6 1,495.5 1.495.5

APPLICATION OF FONDS

FIXED ASSETS 1,787.8 1,634.2 1,097.9 667.9 622.3 417.9 99.5 34.7

R3R3__ 15.0 63.8 72.9 151.5 215.7 177.5 273.9 392.2 355.6 355.6 355.6 355.6 355.6

PALRMVOIRE MANAOGENT FEE 12.0 12.0 12.0

DSBT SERVICE

lst Proj. BSIE - - - - - - - 80.0 80.0 80.0 80.0 80.0 -CAA (Long term) 26.1 28.5 31.0 104.4 127.0 121.6 160.6 152.8 - - - -CAA (Mediuan term) 15.7 143.0 139.6 109.0 54.5 52.2 - - - - - -BEI 99.3 126.2 146.8 254.7 285.9 284.9 285.9 284.9 284.9 284.9 284.9 284.9 284.9CCCE 29.2 36.8 42.8 45.0 95.3 91.2 88.3 85.2 82.3 79.2 76.3 73.2 70.3IBRD - - - - 125.6 125.6 125.6 125.6 125.6 125.6 125.6 125.6 125.6

2nd Pro.j. CCCE 2.3 11.3 23.2 30.3 55.C 55.0 55.0 55.0 55.0 55.0 55.0 55.0 55.0IBRD 4.7 17.9 31.3 37.5 59.6 59.6 59.6 59.6 59.6 59.f 59.6 59.6 59.6

TOTAL APPLICATIONS 1,992.1 2,073.7 i,597.5 1,500.3 1,638.9 1,385.5 1,157.5 1,270.0 1,053.0 1,039.9 1,037.0 1,033.9 951.0

ANNUAL CASH SURPLUS OR DEFICIT 667.8 (137.0) (192.9) 5.8 (160.9) 105.7 440.9 310.3 531.7 521.1 493.6 461.6 544.5

CUMULATIVE CASH SURPLUS 668.1 531.1 338.2 344.0 183.1 288.8 729.7 1,05.0 1,571.7 2,092.8 2,586.4 3,058.0 3,592.5(Dec. 31, 1970: 0.3

April 8, 1971

1/ For original projection see Report TO-603C dated April 25, 1969 (Annex 1, Table 5) First ICory Coast Oil P31D and Coconut pr.ject (Loans 611, 612, 613, IVC). Second project mill is included.

IVORY COAST

SECOND OIL PAIM AND COCONUT PROJECT

ASSOCIATION IN PARTICIPATION

UPDATED ESTIMATED PROFIT AND LOSS ACCOUNTS - 1971 - 1973Y(CFAF MILLIONS)

1971 1972 1973 1974 1975 1976 1977 1M78 1979 1980 1981 1982 1583

REVEN[M

Sales from estates and prcvate sector 1,318.5 2,256.2 3,349.7 4,177.5 4,855.9 5,286.7 5,538.8 5,528.1 5,570.5 5,627.4 5,653.5 5,662.4 5,662.5Oil (CIF US$160/T) Kernels (19F TTs$145/T)

ProclsSing chaee t. sol1hold.r 176.L 258.6 370.7 513.7 652.5 784.8 868.9 917.9 938.8 935.0 925.2 918.7 918.7

T3TXL REVENUE 1,494.9 2,51L.8 3,690.4 4,691.1 5,508.4 6,071.5 6,407.7 6,44,6.o 6,509.3 6,562.4 6,578.7 6,581.1 6,581.1

EXPENDITURE

Upkeep and maintenance of estates 763.7 1,075.4 1,338.8 1,468.8 1,546.3 1,567.1 1,585.6 1,600.5 1,616.3 1,616.3 1,616.3 1,616.3 1,616.3Processing costs 5110.1 560.5 810.0 923.3 1,017.6 1,110.1 1,184.1 1,203.3 1,210.0 1,210.0 1,210.0 1,210.0 1,210.0Operation - Estates 204.1 347.0 499.9 588.7 676.3 729.5 760.7 772.8 774.6 774.6 774.6 774.6 774.6

-Oil mills 211.3 346.8 542.2 685.4 800.5 884.2 935.0 957.9 965.0 965.0 965.o 965.0 965.0Short tern. laoa- interest 2.6 4.4 6.1 7.3 8.2 8.6 9.C 9.2 9.4 9.5 7.6 9.8 10.0Payments to private sector 36.5 38.2 165.1 175.2 176.5 189.6 202.3 215.9 234.3 254.0 266.7 272.8 272.8

TOTAL EXPgDrTrURE 1,628.7 2,372.4 3,342.1 3,848.7 4,225.4 4,489.1 4,676.7 4,759.6 4.809.6 4,829.4 4,842.2 4,848.5 4.848.5

ANNUAL SURPLUS OR (DEFICIT) (133.8) 142.4 348.3 842.4 1,283.0 1,582.5 1,731.0 1,686.4 1,699.7 1,733.0 1,726.5 1,732.6 1,732.6

CUMULATIVE SURPLU OR (DEFICIT) (352.6) (210.2) 138.1 980.5 2,263.5 3,845.9 5,576.9 7,263.3 8,963.0 10.696.0 12,422.5 14,155.1 15,887.7(Dec. 31, 1970, CFAF -218.8)

DISTRIBUTION (Percentages)

Management fees: Palmivoire (C) % 0 25 20.71 12.12 9.01 7.69 7.20 7.34 7.30 7.19 7.21 7.19 7.1913alance for distribution 5 100 75 79.26 87.88 90.99 92.31 92.80 92.66 92.70 92.81 92.79 92.81 92.81Coef. Sodepalm 5 66.59 47.03 48.78 52.80 53.46 53.63 54.70 55.36 56.40 57.84 59.51 61.61 61.54

Palmindustrie % 33.16 27.76 30.22 35.79 37.22 38.35 37.74 36.91 35.87 34.51 32.76 30.62 39.59Palmsivoire (C') % 0.25 0.21 0.26 0.29 0.31 0.33 0.36 0.39 0.43 o.46 0.52 o.58 0.58" Palivoire (C + C') % 0.25 25.21 21.00 12.41 9.32 8.C2 7.56 7.73 7.73 7.65 7.73 7.77 7.77

DISTRIBUTION OF ANNUAL SURPLUS OR (DEFICIT)

Sodepalm (Uae. 31, 1970: 59.9) (234.8) 67.0 169.9 444.8 685.9 848.6 916.8 933.6 958.6 1,002.4 1,027.4 1,067.5 1,067.5Pslmindustrie (Dec. 31, 1970, 67.4) (116.9) 39.5 105.3 293.1 477.5 606.9 653.3 622.6 609.7 598.0 565.6 530.5 530.5 I IPalmivoire (Dec. 31, 1970: 0.5) (0.9) 35.9 73.1 104.5 119.6 126.9 130.9 130.4 131.5 132.6 133.5 134.6 134.6 N

9/ For original projection see Report TO-603c dated April 25, 1969 (Annex 1, table 6) first Ivory Coast Oil Palm andCocorut Projeot (Le-ns 611, 612, 613 IEV).

April 8, 1971

IVORY COAST

SECOND OIL PALK AND COCONllT PROJECT

SUMMARIZED OVERALL CASH POSITION OF SODEPALM, PALIDNDUSTRIE AND OIL PALM OUTGROWERS

(CFAF MILLIONS)

1971 1972 1973 1974 1975 1976 1977 197B 1979 1980 1981 1982 1983

S03EPALM

OIL PALM ESTATESFirst Project - 29.9 199.1 124.0 285.9 364.3 900.6 1,036.1 1,042.0 1,092.0 1,137.0 1,163.2 1,204.5 1,205.7Secoend Project - - - - _ - - - - - - -

Annual Surplus/- Deficit - 29,9 199.1 124.0 285.9 364.3 900.6 1,036.1 1,042.0 1,092.0 1,137.0 1,163.2 1,204.5 1,205.7

(12a31t70 -150-1) -180.0 19.1 143.1 429.0 793.3 1,693.9 2,730.0 3,772.0 4,864.0 6,001.0 7,164.2 8,368.7 9,574.4

COCONUT PROGRAMSFirst Project 188.9 196.8 - 79.0 - 50.7 -225.4 - 138.1 44.9 - 14.1 40.3 43.7 90.6 92.6 92.5Second Project - 4.o - 15.2 - 38.0 - 67.2 -104.3 - 114.9 - 477.0 - 471,.8 - 190.9 226.1 5L8.6 698.2 697.1

Annual Surplus/- Deficit 184.9 181.6 -117.0 -117.9 -329.7 - 253.0 - 432.1 - 488.9 - 150.6 269.8 639.,2 790.8 789.6Cunmlative Surolus/- Deficit 91.9 273.5 156.5 38.6 -2)1.1 - .44.1 - 976.2 -1,465.1 -1,615.7 -1,345.9 - 706.7 84.1 873.7

TOrAL ANNUAL SURPLUS/-DEFICIT 155.0 380.7 7.0 168.0 34.6 647.6 605.0 583.1 941.L 1,506. 6 1,802.4 1,995.3 1,995.3

(12C.U31.70 -243A 1) L 88.1 292.6 299.6 467.6 502.2 1,149.8 1,753.8 2,306.9 3,258.3 4,655.1 6,457.5 c,,L52.8 10,448.1

PALMINDUSTRIE

First and Second Projects 667.8 -137.0 -192.9 5.8 -160.9 105.7 440.9 310.3 531.7 525.1 493.6 1,61.6 544.5

Annual Surplus/- DeficitCumulative Surplus/- Deficit 668.1 531.1 338.2 344.0 183.1 288.8 729.7 1,040.0 1,571.7 2,092.8 2,586.4 3,048.0 3,592.5

(12.31.70 9.3)

OIL PAL}t OUTGR,ER=S=

First Project _ 74.3 - 78.7 - 70.5 -187.6 -250.6 - 224.3 - 171.9 - 171.9 - 122.6 - 80.4 - 35.9 - 16.8 - 16.7

Second Project - - 0.9 - 5.6 - 14.1 - 20.5 - 31.4 - 105.5 - 105.5 - 80.0 - 36.6 - 20.3 36.9

ANNUAL SURPLUS/-DEFICIT - 74.3 - 79.6 - 76.1 -201.7 -271.1 - 255.7 - 277.3 - 277.4 - 202.6 - 117.0 - 35.9 3.5 20.2

CUNULATIVE SUPLUS/-DEFICIT -175.2 -254.8 -330.9 -532.6 -803.7 -1,059.4 -1,336 .7 -1,614.1 -1,816 .7 -1,933 .7 -1,99 .6 1,966.1 1,95 .9

Aay 17, 1971

IVORY COAST SECOND OIL PALM AND COCONUT PROJECT

PRESENT SODEPALM AND PALMIVOIRE MANAGEMENT STRUCTUREORGANIZATION CHART

SODEPALM PALMIVOIRE

| Ur 1- IN'FeCIOi | } SECRelARY | LeGAL~~~~~~~~~~~~~FF~~IC ~MNCTRTIN HIF ~ FCE EA',T~

H ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ I 3I AI jIR i| MNOR || ADCON5 1|t X | GFRNN

ii 1: I M, vi

-- - - - - -. - - AG - - - -

| CO_Ot4UI O . VAIAh W § |~~~~~~~~~~~~~~~~~~I

__F __I _E _E ___I_I___ _ _ __ __ __ __ __ _ _ _________ ________-------ISRD5652ID !2R

ANNEX 3Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

OIL PALM AND COCONUT SECTORS

The Oil Palm Sector(East of Sassandra)

A. Plantings

To be completedExisting under ongoing Proposed12/31/70 program Project Total-------------------------hectares-------------

SODEPALM

Estates 37,000 2,200 - 39,200Outgrowers 17,300 4,100 4,500 26,900

54,300 6,300 4.500 66,100Private Holdings

Out of ZonePlantings 1,400 1,400Private

CompaniesEstates 11,900 1,100 - 13,000

67,600 6,400 4.500 79,500

B. Financing by Government and by Public Foreign Agencies

1. Existing:

SODEPALM-PALMIVOIRE Ha FCFA US$ Equivalent

BSIE 4.900 2.111.900.000 7,500,000FED 36.700 9.525.400.000 34,260,000IBRD/CCCE 16.000 2.878.100.000 10,350,000CCCE 3.000 386.400.000 1,400,000

SODEPALM Capital 400.000.000 1,400,000PALMIVOTRE Capital 50.000.000 20n,nnn

60.600 14.947.800.000 55,200,0002. Proposed:

IBRD/CCCE 4.500 378.000.000 1,360,000BSIE (as above) 83.000.000 300,000

GRAND TOTAL 65.100 15.408.800.000 56,860,000

ANNEX 3Page 2

The Coconut Sector

A. PlantingsTo be completedunder ongoing Proposed

Existing 12/31/70 programs Project Total------------------------hectares…-----------------------

SODEPALM

Estates 4,700 150 8,000 12,850OutgrowersAssociated withestates 2,550 450 4,500 7,500Other Outgrowers 19,000 3,000 - 22,000Private Estate 650 - - 650

26,900 3,600 12,500 43,000

B. Financing by Government and by International Agencies

1. Existing: Ha FCFA US$ equivalent

SODEPALM BSIE 250 362.500.000 1,300,000FAC 300 69.000.000 248,000TBRD/CCCE 6,500 1.587.000.000 5,700,000CCCE 700 196.000.000 705,000

7,750 2.214.500.000 7,953,0002. Proposed:

IBRD/CCCE 12,500 2.459.100.000 8.845.000BSIE (as above) 639.400.000 2,300.000

GRAND TOTAL 20,250 5.313.000.000 19.098.000

ANNEX 3Page 3

Oil Mills and Other Installations

A. Investments

SODEPALM/PALMINDUSTRIECommissioned 12/31/70 To be commissioned

Mills: Ehania BouboToumanguie SoubreEloka Savanne DabouAnguededouIroboBolo

Terminal Storages: One at VRIDI one at SAN PEDRO(Abidjan Harbour) harbour

Private Companies

Mills: Cosrou (one)

B. Financing by Government and by Public Foreign Agencies

1. Existing FinancingSources CFAF US$ Equivalent

Eloka-Toumanguie CAA/FED 1.013.200.000 3,600,000Ehania IBRD 1.185.000.000 4,300,000

Anguededou-Irobo BEI andand Boubo-Bolo- CCCE 3.000.000.000 /1 10,800,000

SoubreTerminal Storage RCI 400.000.000 1,400,000

PALMINDUSTRIE Capital 2.500.000.000 9,000,0008.098.200.000 29,100,000

2. Proposed Program

Dabou Oil Mill IBRD/CCCE 1.067.000.000 3,840,000PALMINDUSTRIE 278.000.000 1,000,000

GRAND TOTAL 9.443.200.000 33,940,000

ANNEX 3Page 4

Total Financing Available from Government and from International Agencies

CFAF US$ Equivalent

Total Coconut Plantings financing 5.313.000.000 19,098,000Total Oil Palm Planting financing 15.408.800.000 56,860,000Total Industrial financing 9.443.200.000 9400

GRAND TOTAL 30.165.000.000 109,898,000

/1 Seventy-five percent BEI.

Note: Rounded figures.

ANNEX 4Table 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

PROJECT'S OIL PALM PLANTING PROGRAM (1972-1974)(hectares)

Sector 1972 1973 1974 Total

Bingerville - - -

Abobo

Attinguie - - -

Toumanguie - 50 100 150

Adiake - 50 - 50

Ehania 100 200 200 500

Dabou - 87 35 122

Nouvel Ousrou - 196 61 257

Yassap - 152 79 231

Cosrou - 65 75 140

Boubo 100 450 450 1000

Irobo 50 250 400 700

Bolo 200 200 200 600

Soubre 50 300 400 750

Alepe

TOTAL 500 2000 2000 4500

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

OIL PALM

AREAS PLANTED AND PROPOSED PROJECT

(Hectares)

PREVIOUS PROGRAMS PROPOSED PROJECTGRAND

End 1970 1971 1972 Total 1972 1973 1971 Total TOTAL(A-ctua7 TMtimated) -

OUTGROWEPSMILLS DISTRICTS

ERANIA EEANIA 1,024 4°0 250 1,674 100 200 200 500 2,174TOUMANGUIE TOUMANGWIE 1,306 100 50 1,456 - 50 100 150 1,606 MILLING ORGANIZATION

ADIAKE 1,093 100 50 1,2243 - 50 - 5o 1,293ELOKA BINGERVILLE 820 100 50 970 - - - - 970

ABOBO 1,199 - - 1,199 - - - - 1,199 MILLis RETAREANGUEDEDOU ATTINGUIE 1,736 150 65 1,951 - - - - 1, 951 MDABOU YASSAP 1,220 150 152 1,522 - 152 79 231 1,753 EHANIA 12,578

DABOU 1,471 150 87 1,708 - 87 35 122 1,830 TOUMANGUIE 6,179OUSROU 749 100 196 1,045 - 196 61 257 1,302 ELOKA 4,854SIXENSI g 1,400 - - 1,400 - - - - 1,400 ANGUEDEDOU 4,787

IROBO COSROU 1,805 100 50 1,955 - 65 75 140 2,095 DABOU 7,807IROBO 1,178 200 200 1,578 50 250 400 700 2,278 IROBO 10,174

BOLTBO BOUBO 1,079 350 200 1,629 100 450 450 1,000 2,629 BOUBO 7,002SOUBRE SOUBRE 565 150 250 965 5o 300 400 750 1,715 SOUBRE 6,217BOL0 BOLO 696 200 - 896 200 200 200 600 1,496 BOLO 5,229

LAME (IRHO) ALEPE 1,331 50 228 1,609 - - - - 1,609 9 Mills .64,897

TOTAL OUTGROWERS 18,672 2,300?3 1,828 22,800 500 2,000 2,000 4,500 27,300

MILLS ESTATES

TOUMAGUIE TEANIA 73,280 1,431 3,280 IVORY COAST - OIL PALM - OVERALL POSITIONELOKA ELOKA 2,685 - 2,685ANGUEDEDOU ANGUEDEDON 2, 836 - 2,836DABOU DABOU 1,522 - 1,522 Sodepalm: Estates 39,206IROBO TIEGBA 2,148 - 2,148 Outgrowers 27,300 66,506 ha

TAMABO 2,247 - 2,247YOCOBOUE 1,1406 - 1,1406

BOUBO BOUBO 4,373 - 4,373 IRHO: Lame 1,000SOUBRE SOU3RE 3,838 664 4,502 Mopoyem 3,627BOLO BOLO 3,424 129 3,553 Drewin 651 5,278 ha

FRESCO 250 - 250

TOTAL ESTATES 36,982 2,224 39,206 Private Companies: PhCI 3,294PSD 1,950SPEB 551 5,795 ha

Small Private Estates: 1,931 ha

GRAND TOTAL OIL PALM 79,510 ha

1/ Previously Hors Zone.V/ Including 200 ha of Bolo financed by BSIE.3/ To which are to be added 1,950 ha of P.D and 3,366 ha of IRHO (Mopoyen Estate) as from 1972.1T/ Excluding 1,609 ha milled by IRHO at Lame.

April 11, 1971

ANNEX 5Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

COCONUT PRODUCTION

Planting Material

1. Hybrid coconuts would be grown under the project from seed suppliedby the IRHO station at Port Bouet. The hybrid is a cross between dwarfMalayan varieties (endogamous) and the tall African coconut palm (exogamous).

2. Trials indicate that the hybrid material has excellent qualities,in particular:

(a) high copra yields;

(b) early maturity;

(c) excellent copra quality; and

(d) drought tolerance.

Although it has been impossible to investigate all of the hybrid's character-istics, those which are known are sufficient to advocate its use. Two impor-tant qualities have not been investigated fully. These are its productivelife span, and its viral disease resistance. It is expected, however, thatits productive life span would be in range of the parent stock and thereforebetween 40 and 100 years. So far it has not suffered from viral diseases.The dwarf parent, is resistant and consequently there is a good chance thatthe hybrid will have this quality.

Fertilizers

3. Foliar analysis would be undertaken regularly with assistance fromIRHO to ascertain optimum fertilizer use. It is known already that hybridcoconuts require large quantities of fertilizer, and in addition to nitrogenat planting, by year six it is expected that each tree will require about500 gram of phosphate, 2,000 gram of potassium, and 1,500 gram of magnesiumannually.

Yields

4. The project copra yield projection of 3.5 ton/ha at full maturityis conservative. It is less than the 4 ton/ha achieved on IRIO trials,which were located on poorer soils than those selected for the project, andwhich did not benefit from the use of the polybag nurseries to be used underthe project. The trial results and project yield estimates between years3 and 7 are given below:

ANNEX 5Page 2

Average yields observedon IRHO station various Projected yields Projected yieldstesting plots (16 ha). for Estates for Outgrower

…_______--__-----------…kg copra per ha…-------------------

Year 3 260 50 -

Year 4 1,840 400 300Year 5 3,570 1,700 1,400Year 6 4,050 2,800 2,300Year 7 4,050 3,500 3,000

Processing

5. At full maturity 200 ton/day of copra would be produced from es-tates and outgrowers (see planting details Table 1). The relationship be-tween the proposed plantings and those made under Loan IVC-613 is given inTabie 2. A study to develop and design a central processing unit by 1976 isbeing carried out. This unit would be a continuous flow process capable ofconverting coconuts directly into oil and expeller cake. In the meantimesmall units capable of processing about 5.5 tons of copra in 38 hours wouldbe used for the limited amounts of copra that would be produced by the proj-ect before 1976.

ANNEX 5Table 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

PROJECT'S COCONUT PLANTING PROGRAM (1971-1975)(hectares)

1971 1972 1973 1974 1975 TOTALA. Estates

Assinie 500 500 800 - - 1,800Boulay - 300 400 - - 700Grand Lahou - - 400 1,100 1,500 3,000Fresco - - 400 1,100 1,000 2,500

TOTAL A 500 800 2,000 2,200 2,500 8,000

B. Outgrowers

1. Assiniea. Elira - - - 510 900 1,410b. Aboutou - - - 130 - 130c. Assomlan - - - - 70 70TOTAL B1 - - - 640 970 1,610

2. Boulaya. Audouin Sud - - - 200 - 200b. Audouin Nord - - - 150 - 150c. Boulay - 200 - - - 200d. Ile Bolkre - - 260 - - 260TOTAL B2 - 200 260 350 - 810

3. Alladiana. Jacqueville - - - - 120 120b. M'Bokrou - - - - 80 80c. Addah - - - - 290 290TOTAL B3 - - - - 490 490

4. Grand Lahou B4 - - - 210 310 520

5. Frescoa. Dahiri - - 240 - - 240b. Vrom - - - 350 - 350c. Dassieko - - - - 180 180d. Port Gauthier - - - - 300 300TOTAL B - 200 500 1,550 2,250 4,500

GRAND TOTAL 500 1,000 2,500 3,750 4,750 12,500

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

COCONUT PROJECT3

PLANTING PROGRAMS

ri967 l97g'- Rectar6e)

FIRST PROJECT PROPOSED PROJECTGBAND

1967 1968 1969 1970 1971 Total 1972 1972 1973 1974 1975 Tbtal TOTAL

............... Actual. Estinated . ................... Estimated.

FORECAST 1,000 1,400 2,100 3,000 - 7,500 500 1,000 2,500 3,750 4,750 12,500

A. ESTATES

Assinie 200 1,020 - - - 1,220 500 500 800 _ _ 1,800 3,020Port Bouet 100 100 165 216 - 581 _-- - - 581Boulay - - - - - - - 300 400 - - 700 700Alladian 216 391 451 321 - 1,379 _ - - - - 1,379Grand Lahou - - 261 746 153 1,160 - - 400 1,100 1,500 3,000 4,160Frusco - 52 198 - - 250 - - 400 1,100 1,000 2,500 2,750Toumodi - 300 - - 300 - - -

Total Estates 516 1.863 1.075 1.283 153 4.890 500 800 2,000 2.200 2.500 8.000 12.890

B. OU TROWERS

Assirde - - 211 490 - 701 - - - 640 970 1,610 2,311Port Bouet - - 268 - - 268 - - - - 268Boulay - - - - 274 274 - 200 260 350 - 810 1,084Alladian - - 343 970 - 1,313 - - - 490 490 1,803Orand Lahou - - 61 216 191 468 - - - 210 310 520 988Fresco - - - - - - - 240 350 480 1,070 1,070

TotXa2l4uroes- - - 883 1.676 465 3.024 - 200 500 1.550 2.250 4.500 7.524

GRAND TOTAL 516 1.863 1,958 2.559 618 7.914 500 1.000 2.500 3.750 4.750 12.500 20.414

FIRST PROJECT

1967 1968 1969 1970 1971 Total

RECAPITULATION

A. ESTATES

FAC - 300 - - - 300 (TouTmodi)CCCE 516 184 - 700 (Assinie and Alladian)IBRD/CCCR - 1,307 877 1,173 143 3,500BSIE - 72 198 110 10 390 (Fresco and extras)

Total Estates 516 1.863 1,075 1.283 153 4,890

B. OU TROWERS

IBRD/CCCE - - 883 1,676 443 3,000BSIE - - - 24 24 (Boulay)

Total Outgrowers - - 883 1,676 465 3,024

GRASI TOTAL 516 1,863 1.958 2,959 618 7,914

April 11, 1971

ANNEX 6Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

DABOU OIL MILL

General

1. A new oil mill in the Dabou area would process the ffb from a total

of 13,000 ha, including the Sodepalm estates (3,500 ha), an IRHO's estate

(3,600 ha) and outgrower's areas (6,300 ha). At maturity, about 141,000 1/

tons of ffb would be produced for processing. The new mill would be

commissioned by January 1973, when a capacity of 35 ton ffb/ha would be

required. Initially, two lines of 10 ton ffb/hr each would be installed,

and a third line of similar capacity would be added in the late 1970's,

when ffb production would have increased.

Location -

2. The mill site is at the intersection of the Abidjan-Bouake and

Yassap-Grand Lahou roads. Investigations of water availability indicate a

groundwater supply of over 100 m3/hr at about 50 m, which is more than

adequate for mill requirements.

Construction

3. PALMIVOIRE would build the mill. It has the experience and

equipment necessary for earth moving, ground preparation, and building and

storage tank construction. Steel work, roofing, painting, and road surfac-

ing would be let on subcontracts. Mill machinery would be procured through

international competitive bidding.

Time Schedule and Tendering Arrangements

4. Civil works were started in March 1971 and should be completed

by the end of the year, allowing trial production to begin in 1972. Bids

for machinery and equipment were opened in April and orders will be

placed early in May. The Bank has agreed to pre-qtialification for bids

and these will be limited to the Speichim and de Wecker companies. These

two companies have equipped the eight existing PALMIVOIRE mills.

1/ The Bank's forecast is slightly more conservative than that of SODEPALM

(149,000 ton ffb).

2/ See Chart.

ANNEX 6Page 2

Cost

5. Project costs for the per:Lod 1971-74 total CFAF 1,335.5 including8% contingencies. A breakdown of these costs is given below.

Estimated Project Costs to be Incurred by Palmindustrie(CFAF millions)

Total1971 througt 1972

Mill Machinery and Equipment 580.9Construction and Installation /1 356.7Preparation and Supervision /1 47.2Road Crossover /1 25.0Housing /1 94.9Vehicles

General 6.2Harvesting and Collection 102.4Production Evacuation 21.0

Sub-Total 1,234.3Contingencies /2 101.2

Total 1,335.5

/1 Work to be undertaken by PALMIVOIRE./2 Physical 3% per annum, price 5%; per annum.

Alternative Phasing for Milling Arrangements

6. There are mills at Irobo and Anguededou (Map 3), which are 62 kmand 40 km from the centre of the Dabou area. Each has a potential capacity,with additional equipment, to handle 40 ton ffb/hr. This additional capacityand that in the new mill at Dabou would be required by 1976 to process theffb produced around the three mills. The possibility of expanding thesemills, before building the new Dabou mill, to handle project ffb in theearly years of production was investigated, and though there is a marginalfinancial benefit from expanding them first, it was decided to proceedimmediately with construction of the Dabou mill because:

(a) haulage distances would be reduced by two-thirds, eliminatingrisks of delays, and extra cost caused by accidents and roadimpediments; and

(b) mill management would be simplified.

7. Table 1 shows the comparative costs and rates of return for the pro-posed milling arrangements and the alternative arrangements for expanding theIrobo and Anguededou mills first, and constructing the Dabou mill in 1975/76.

SECOND IVORY COAST OIL PALM AND COCONUT PROJECT

PROPOSED DAROU MILL AND EXTENSION OF EXISTING MILLS

Comparison between Proposed and Alternative Phasingof Esinoditur(CFAF iilliloos)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984

PROPOSED PRAlINC OF EXPENDITURE-

New Mill 251.7 561.5 428.7 133.6 14.4 17.8 43.9 12.0Eitentions - 173.8 173.9 12.7 123.2 94.0 3.0 3.0Operatieg Costs - - 264.2 295.2 316.5 318.3 338.7 347.3 350.7 352.0 354.1 355.1 350.1 355.4

Sob-ToteS 251.7 735.3 866.8 441.5 454.1 430.1 385.6 362.3 350.7 352.0 354.1 355.1 355.1 355.4

REVENUE

Sales Froneeds - - 504.0 528.0 528.0 576.0 624.0 696.0 768.0 840.0 888.0 912.0 912.0 936.0Residual Vales Old Mill - 72.0 - - - - - - - - - - - -Residual Value New Mill - - - - - - - - - - - 478.2Residual VSIne Extessions - -- - - - - - - - 244.7

ANNUAL +SURFLUS/-DEFICIr -251.7 -663.3 -362.8 + 86.5 +73.9 +145.9 +238.4 +333.7 +417.3 +488.0 +533.9 +556.9 +556.9 +1.303.5

ALTERNATIVE PRASING OFEXPENDITURE 2/

New Mill - - - 251.7 561.5 388.7 173.6 14.4 17.8 3.9 12.0 - -Extensions 173.8 288.9 137.7 8.2 9.0 3.0 3.0 - . - - - - -Operating Costs - - 336.3 375.2 401.3 318.3 338.7 347.3 350.7 352.0 354.1 355.1 355.1 305.4

Sub-Total 173.8 288.9 474.0 635.1 971.8 710.0 515.3 361.7 368.5 355.9 366.1 355.1 355.1 355.4

REVENUE

Sales Proceeds - - 504.0 528.0 528.0 576.0 624.0 696.0 768.0 840.0 888.0 912.0 912.0 936.0Residual Value Old Mill - 72.0 - - - - - - - - - - -Residual Voice New Mill - - - 717.4Residual Va.e Eateosions- - - - - - - - - - - - - 200.8

ANNUAL +SURPLUS/-DEFICIT -173.8 -216.9 +30.0 -107.1 -443.8 -134.0 +108.7 +334.3 +399.5 +484.1 +521.9 +556.9 +556.9 +1.498.8

P inaocial1Rate of Return

PROPOSED PHASING OF EXPENDITURE 177.

ALTERNATIVE PFA8ING OF EXPENDITURE 20O

1/ Dabou Mill eostruetion by 1973 followed by extensions is 1973 sod 19762/ FiPet estension by 1973, Second by 1974 followed by Dab.. Hill in 1976

Other Notes(a) Residuol value of old Dabou mill includes housing, vehicles and equip-ent(b) Residual value of new mill and enteosions assumes 20-yeao life deprecioted on straight line basis(c) Sales proe.eds are nmialo only and identical for proposed and alternative phasing of eopendit-ra(d) Alternative phasing assumes IRHO fruit would be transported up to 60 km until new Dabou mill is built in 1976; if IR0O elected to build a new mill, if Dabou mill .osstruetion is deferred,

the rats of return would be red-ced below 17%.(a) No aucount has been taken of poor road conditions, delays and t-ck breakdowns during the wet season in the aIter-ative phasing of expeodituce calculation; the t-ansport haul during

first sin years would average 40 km, twice thl maxinun 20 kI haul generally ammed for practicaI operation and efficiency.

May 24, 1971

DIAGRAM OF INCOMING FRESH FRUIT BUNCHES

AND OUTGOING PRODUCTS

DAB OIL Ml

RKENSI

-LO~~~~~~~~-

\AS~O YASSAP

IRHO 39,000 T

GRAND- AH-OU \ 0

PSD DEBR IMOU

MOPOYEM 50,000 T

SV DABOUJ

IBRD - 5650

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

ESTIMTED PROJECT COSTSOIL PAIM OUTGrMWE7S

(C;FAF 'I J0

0 1 2 3 4 5 Grand Total COSTTotal Development per

1972 1973 1974 1975 1976 1977 1972 -1976 1972 -1977 HBCARE____ ~~~~~~(CFAF)_

Planting Ha 500 2,000 2,000 - - - 4,500 4,500 -

Development Ha 500 2,500 4,500 4,500 4,000 2,000 - - -

Direct Assistance by SodepalmSupervision and overhead charges 3,375 16,875 30,375 30,375 27,000 13,500 108,000 121,500 27,000Vehicles 2,500 10,000 10,000 - - - 22,500 22,500 5,000Tools and equipment - 1,300 5,200 5,200 - _ 11,700 11,700 2,600

Grant Assistance to Growers at PlantingCover crop seeds 1,050 4,200 4,200 - - - 9,450 9,450 2,100Wire netting 2,100 8,400 8,400 - - _ 18,900 18,900 4,200Fertilizers and insecticides 305 1,220 1,220 - - - 2,745 2,745 610Transport 1,845 7,380 7,380 - - - 16,605 16,605 3,690Labor 1,550 6,200 6,200 - - - 13,950 13,950 3,100

Credits in KindOil palm seedlings 13,000 53,000 56,ooo 4,000 - - 126,000 126,000 28,000Fertilizers - 1,000 4,750 8,125 7,500 4,500 21,375 25,875 5,750

Sub-total 25,725 109,575 133,725 47,700 34,500 18,000 351,225 369,225 82,050

Contingencies at 10il' 2,575 10,955 13,375 4,770 3,450 1,800 35,125 36,925 8,210

Credit in Cash 5,500 23,500 29,500 13,500 12,000 6,000 84,000 90,000 20,000

G=RD TOr&L 33,800 144,030 176,600 65,976 49,950 25,800 47p,350 49k,6$0 110,260,=5 st t=====Sfl========= ====2== o==X==3w=fl=Sssw ==SC.S.S..... C..= f S..===f.

j/ Physical 5 %. p.a., Price 5 % p.a.

April 8, 1971

IVORY COAST

SECON1 OIL PALM AND COD000NT PROJECT

ESTIMATED PROJECT COSTS

COCONHIT ESTATES - ROALS AND KILNS

(OCFAF '000)

0 1 2 3 4 5 6 7 8 9 10 11

Years 1971 1972 1973 197I 1975 1976 1977 1978 1979 1980 1981 1982 Total Total Cost

Planting Hec s 30 1971 - 1976 1971 - 1982 per Ha

Planting Hectares 500 800 2,000 2,200 2,500 - - - - - - - 8,000 Ha 8,000 Ha CFAF

Development Hectares 500 1,300 3,300 5,000 6,700 4,700 2,500 - - - -

Crp - Copra Tons 25 240 1,270 3,670 8,395 14,890 21,960 26,250 28,000 - - -

Overhead Charges 750 6,000 9,300 11,270 11,350 10,830 8,320 4,400 49,500 62,220 7,778

Fixed Assets

Housing and building 20,100 20,450 34,050 28,450 14,950 118,000 118,000 16,750Vehicleo,squipisent and tools 7,160 6,670 12,200 6,550 5,420 2,160 2,810 2,560 40,160 45,530 5,691Roads 3,380 6,760 23,820 38,240 46,130 10,140 118,330 14,791Kilos 17,000 10,000 57,500 50,500 75.500 466500 27,500 17,000 2B4,500 35,563

Field Development

Stafi and labor 7,280 21,52D 45,760 61,740 74,030 49,090 30,980 14,180 259,420 304,580 38,072Land clearing 66,360 99,520 208,500 247,320 218,400 840,100 840,100 105,013Planting material 14,520 23,490 58,630 65,160 74,270 1,880 650 237,930 238,580 29,823Fertilizers and insecticides 3,450 6,060 16,120 25,390 33,430 32,750 26,910 17,450 117,200 161,560 20,195

Naintenance

Buildings 200 600 1,360 1,970 2,300 1,780 1,020 6,430 9,230 1,154Transport 1,180 3,210 7,470 9,110 10,110 6,700 4,460 2,360 37,780 44,600 5,575

Total 120,800 187,120 392,630 456,330 447,310 129,70 -109,730 137,710 96,630 75,500 46,500 27,500 1,733,660 2,227,230 278,405

Contingencies: 10% p.ay2 12,080 18,710 39,260 45,660o 44,730 12,950 10,970 13,770 9,660 7,550 4,65o 2,750 173,370 222,720 27,840

G R A N D T 0 T A L 132,880 205,830 431,890 501,970 492,040 142,620 120,700 151,480 106,290 83,050 51,150 30,250 1,907,030 2,449,95o 306,245

B. ROADS AND KIIMT /

Roads - 6,900 15,050 32,140 47,410 10,910 - - - - - 112,410 112,410

Kilns - - - - 36,000 48,000 43,000 85,000 26,000 6,000 - - 84,000 244,000

Total - 6,900 15,050 32,140 83,410 58,910 43,000 85,000 26,ooo 6,0o0 - - 196,410 356,410

Contingencies: 10% p.a.l/ - 690 1,510 3,210 8,340 5,890 4,300 8,500 2,600 600 - - 19,640 35,640

G R A N D T 0 T A L - 7,590 16,560 35,350 91,750 64,800 47,300 93,500 28,600 6,600 - 216,050 392,050

I/ Plhnioal 5 I p.a., Price 5 % p.a.3/ Required for first project financed under Loan 613 IVC.

April 8, 1971

IVORY COAST

SECOND OIL PALM AND OOCONUT PROJECT

ESTIMATED PROJECT COSTS INCURRED BY SODEPALU/

COCONUt OUTGRIERS

(CFAF '000)

- 1 0 1 2 3 4 5 6 7 8 9 10 TOTAL TOTAL COST

Yers 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1971 - 1976 1971 - 1982 Per NaCPA!

Planting - 200 500 1,550 2,250 - - - - - - - 4,500 Ka 4,500 HaDevelopment - 200 700 2,250 4,500 4,300 3,800 2,250 - - -

PRODUCTION - Nuta ('000) 300 2,150 8,125 22,975 44,075 59,625 67,500 - -Copra equivelent (tons) 60 430 1,625 4,595 8,815 11,925 13,500

COSTS

Overheads 1,500 3,380 5,640 7,420 8,690 8,770 7,970 4,880 35,400 48,250 10,722

Fixed AssetsHowing and Baildings 3,500 3,500 5,600 3,600 1,050 17,250 17,250 3,833Vehicles 1,030 1,300 5,240 12,890 1,980 1,400 660 2,090 23,840 26,590 5,909Roads 2,260 5,830 17,250 24,890 2,260 50,230 11,162Rium 3,000 20,000 20,500 33,500 34,500 19,500 2,500 3,000 133,500 29,668

Field DevelopmentStaff and labor 2,000 4,830 8,360 12,550 15,540 11,690 10,630 6,500 54,970 72,100 16,022Land clearing 4,200 27,300 74,550 177,450 189,000 472,500 472,500 105,000Planting m,aterial 5,810 14,620 45,320 66,280 1,570 590 133,6oo 134,19 29,820Fertilizers and insecticides 1,370 3,730 11,990 21,500 15,800 21,100 17,470 54,390 92,960 20,659Land sarvey 600 1,500 4,650 6,750 13,500 13,500 3,000

NAi-ntenaocBuildings 40 120 310 530 700 690 420 1,700 2,810 622Transport 610 1,490 3,180 6,530 9,110 7,700 6,770 4,020 28,620 39,410 8,758

Sub total (a) 12,840 49,620 122,540 282,710 320,430 52,890 74,240 73,130 58,390 34,500 19,500 2,500 841,030 1,103,290 245,175

Cash advances 600 1,900 5,850 10,550 6,750 4,300 3,800 2,250 25,650 36,000 8,000

Total without contingencies 12,840 50,220 124,440 288,560 330,980 59,640 78,540 76,930 60,640 34,500 19,500 2,500 866,680 1,139,290 253,175

Contingencies of 10% p.a. on (a)2/ 1,290 4,960 12,260 28,270 32,040 5,290 7,420 7,310 5,840 3,450 1,950 250 84,110 110,330 24,518

Total with contingencies 14,130 55,180 136,700 316,830 363,020 64,930 85,960 84,240 66,480 37,950 21,450 2,750 950,790 1,249,620 277,693

1/ All e-penses with the exception of kilns cos;ting CFAF 146.9 ilon including contingencies would be repayed by outgrowers.f/ Physical 5 S p.a., Price 5 % p.a.

April 8, 1971

SCONTD IVORY COAST OIL PALI AkI'JD COCON4UT PROJEC'JT

DAPOU OIL MILIL

Estimated Project Costs to be incurred by Palmindustrie1971 through 197h1(CFAF millions)

Total1971 1972 1973 197)4 1971 through 1974

Mill Machinery &' Equipment 135.1 262.0 157.1i 26.1. 58o.9

Construction and Insta-lation 70.0 168.1L 108.3 10.0 356.7

Preparation and Supervision 15.0 20.1 8.6 3.5

Road Crossover 12.5 12.5 - - 25.o

Housing 30.6 30.6 33.7 91t.9

Vehicles

General 3.1 3.1 - 6.2

Harvesting 4' Collection 15.3 L)W.2 It2.9 102.b

Production Evacuation -__ 7.0 7.0 7.0 21.0

Sub-Total 232.6 519.o 359.2 123.5 1,23h.3

Contingencies-/ 19.1 42.5 29.5 10.1. 101.2

T otal 251.7 561.5 388.7 133.6 1,335.5

1/ Physical 3% per annum, price 5% per annum.

IVCRY COASTSECOND OIL PALM AND COCONUT PROJECTS

SUMNARY LIST OF GOODS TO BE FINANCED BY BANK LOANSESTIMATED ACTUAL DISBURSEMENTS

(CFAF Millions)

1971 1972 1973 1974 1975 1976 1977 Total US$ xA. LOAN TO SODEPALM

1. Coconut Program

i) Fertilizers and insecticides (80%) 2.8 5.9 15.9 29.8 43.8 38.8 - 137.0 0.5ii) Kilns (80%) - - 29.0 54.0 - 83.0 0.2iii) Staff and labor (70%) 6.5 18.4 37.9 52.0 62.7 42.5 - 220.0 0.8iv) Planting material (50%) 7.3 14.7 36.7 55.3 70.2 1.8 - 186.0 0.7v) Vehicles and equipment (47%) 3.9 3.8 8.2 9.1 3.4 1.6 - 30.0 0.1vi) Land dlearing (35%) 25.0 45.0 lOC.2 149.0 143.0 - - 462.2 1.7

Contingencies (40%) 4.5 8.8 15.9 29.5 35.2 13.9 - 111.8 0.4

Total IBRD Disbursements (40%) 50.0 96.6 218.8 324.7 387.3 152.6 - 1,230.0 4.4

2. Oil Palm Outgrowers

i) Fertilizers and insecticides (80%) - 1.9 8.5 11.5 6.5 6.0 - 34.4 0.1ii) Supervision and overheads (68%) - 2.3 11.5 20.7 20.7 18.4 _ 73.6 0.3iii) Oil Palm seedlings (50%) - 6.5 26.5 28.0 2.0 - _ 63.0 0.2

Contingencies (48%) - 1.1 4.6 6.o 2.9 2.4 - 17.0 0.1

Total IBED Disbursements (40%) - 11.8 51.1 66.2 32.1 26.8 - 188.0 0.7

B. LOAN TO PALMINDUSTRIE

Dabou Palm Oil

i) Mill machinery and plant (94%) 120.7 209.1 110.3 18.2 - - 458.3 1.6ii) Vehicles (27%) - 6.9 114.8 13.7 - - - 35.4 0.1

Contingencies (40%) 9.9 17.7 10.3 2.6 40.5 0.2

Total IBRD Disbursements (40%) 130.6 233.7 135.4 34.5 - - _ 534.2 1.9

GRAND TOTAL IBRD Disbursements 180.6 342.1 405.3 425.4 419.4 179.4 - 1,952.2 7.0

DISBURSEMENTS 90.3 261.4 373.7 415.4 422.4 299.3 89.7 1,952.2 7.0(allowing for 6 months slippage)

April 8, 1971

ANNEX 9Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

CREDIT ARRANGEMENTS - OIL PALM OUTGROWERS

Credits, grants and supervision

1. The following table shows the distribution of credits, grants

and services over the four-year period required to bring outgrower oil

palms into producton:

(CFAF per hectare)

Credits Grants Supervision

Year 0 - PlantingSeedlings 26,000 -

Cash to assist in land clearance 8,000 -

Cash to assist in maintenance 3,000 - -

Fertilizers and insecticides - 610 -

Cover crop seeds - 2,100 -

Wire netting - 4,200 -

Transport plant and labor - 3,690 -

Labor - 3,100 -

Vehicles and equipment - 5,000 -

Supervision 6,75037,000 18,700 6,750

Year 1 - Replacement of seedlings 2,000 - -

Fertilizers 2,000 -

Cash to assist in maintenance 3,000 -

Tools and equipment - 2,600 -

Supervision 6, 507,000 2,600 6,750

Year 2 - Fertilizers 1,500 - -

Cash to assist in maintenance 3,000 - -

Supervision 6,7504,500 - 6,750

Year 3 -Fertilizers 2,250 - -

Cash to assist in maintenance 3,000 - -

Supervision _ 6,7505,250 - 6,750

TOTAL CFAF 56L750 21,300 / 27,000

GRAND TOTAL 102,050

/1 Repaid by F.E.R. (Fonds d'Extension et de Renouvellement) to SODEPAIM.

ANNEX 9Page 2

2. During the operating period SODEPALM would supply fertilizers oncredit to outgrowers at the rate of CFAF 2,250/ha in year 4 and CFAF 3,000/hain year 5 to 9, for a period total of CFAF 17,250. llTis was not included inthe first project but experience to date indicates that outgrowers would beunlikely to apply fertilizers during the first 6 years of production withoutcredit facilities. From year 10 onwards SODEPALM would supply fertilizersto outgrowers at the rate of CFAF 3,000 per hectare per year and woulddeduct the cost from the sales price.

3. The outgrower would supply the necessary tools at an estimated costof CFAF 100 per hectare per year as from year 0. The estimated number ofman-days per outgrower per liectare per year are as follows:

Years Upkeep Years Upkeep Harvest Total

-1 80 /1 4 25 14 390 45 5 25 17 421 51 6 25 20 452 30 7 25 25 503 25 8 to 25 25 25 50

/1 Mostly land clearing.

4. Credits to outgrowers would be made by SODEPALM through its Comptede Plantations Villageoises (C.P.V.). Each participating outgrower would bedebited with a total of CFAF 53,750 per ha (See Annex 10 page 1). This isbased on past experience and compares with CFAF 63,000 per hectareestablished as average in the first project.

5. The credits would bear compound interest at 2% and the outgrowerwould repay principal and interest, together with the credits for fertilizerssupplied during the first 6 years of operation, over a period of 12 yearsbeginning in the 7th year after planting. Interest would be capitalized inthe grace period. SODEPALM would deduct credit repayments from its paymentsto outgrowers for ffb. Participating outgrowers would contract to sell alltheir ffb to SODEPALM and in practice would have no other market except forsmall quantities of ffb for local oil production. These arrangements workwell currently.

6. F.E.R. would reimburse SODEPALM CFAF 48,300 per hectare, which isthe difference between the total cost of establishing one hectare (CFAF 102,050per ha) and the amount repaid by the outgrower (CFAF 53,750 per ha); F.E.R.payments under the first project were CFAF 63,800 per hectare. Reimbursementwould be at the rate of CFAF 3,000 per hectare in year 7, CFAF 4,000 in year 8,CFAF 5,300 in year 9 and CFAF 6,000 Ln years 10 to 15.

7. The following table shows the estimated annual average allocationof the value of one kg of outgrower bunch for the period 1978 through 1988using the Bank's forecast of palm produce prices and assuming a net priceto outgrowers of CFAF 4 per kg of ffb (CFAF 5 per kg, less CFAF 1 per kg forSODEPALN supervision costs).

ANNEX 9Page 3

Average Values and Costs for one kg of outgrower ffb(CFAF)

1978-1988

Value kg of oil CFAF 36.44 x 21 - 100 7.65Value kg of kernels CFAF 30.31 x 5 - 100 1.52Value kg ffb: oil 21%, kernels 5% 9.17SODEPALM supervision costs (CFAF 8,650 per ha) 0.82Processing costs and fees to Participation:

CFAF 4,000/ton 4.00 4.82

Available for distribution to outgrower 4.35SODEPALM guaranteed price 4.00

Surplus per kilo of ffb 0.35

8. Although outgrowers credits only bear compound interest at 2% perannum the surpluses accruing to the Government from outgrowers productionwhich total approximately CFAF 50,000 per hectare during the loan period,effectively increases the compound interest rate to about 9% per annum onpresent price forecasts.

9. Annex 13 shows the returns to a typical outgrower expressed interms of net income per man day and per hectare.

ANNEX 10Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

CREDIT ARRANGEMENTS - COCONUT OUTGROWERS

1. The following table shows the average costs per ha over the 5-year period required to bring outgrowers' coconut into production.

(CFAF per hectare)Amounts SODEPALM'sLent by ServicesSODEPALM _

Year -1 Land Clearing 21,000Supervision, overheads, transport etc. 11,100

21,000 11,100

Year 0 (Planting) Land clearing 84,000Planting material 26,050Cover crop seeds 3,000Insecticides and fertilizers 6,900Land survey 3,000Labor 1,500Cash to assist in maintenance 3,000Supervision, overheads, transport etc. 11,550

127,450 11,550

Year 1 Planting material 500Insecticides, fertilizers 2,500Labor 300Cash to assist in maintenance 2,000Supervision, overheads, transport etc. 7,700

5,300 7,450

Year 3 Insecticides and fertilizers 8,600Cash to assist in maintenance 1,000Supervision, overheads, transport etc. 6,200

9,600 6,200

Total Years -1 through 3 167,300 44,000

Total cost per hectare 211,300

Year 4 (First year of production)Cash credit 1,000Fertilizer and insecticides 8,600Access roads 11,200

20,800Contingencies Year 1 through 4 21,900

TOTAL PRODUCTION LOAN 254 ,onn

ANNEX 10Page 2

2. Outgrowers would supply the necessary tools at an estimated costof CFAF 100 per hectare per year as from year 0. They would pay cash fortheir land title in year 0 and for fertilizers and transport fees from year5 onwards. The estimated numbers of man-days for outgrower per hectareper year are:

Year Upkeep Years Upkeep Harvest Total

0 31 4 8 1 91 18 5 8 4 122 13 6 8 7 153 8 7 to 40 8 9 17

3. The term of the loans will be 25 years as for the first project,but the interest will be 7-1/2% instead of 6%. The compound interest willbe capitalized during the grace period of 6 years (Year-1 through Year 4)and repayments will be made during the following 19 years (Year 5 throughYear 23). SODEPALM will deduct credit repayments from its payments to out-growers for nuts. Participating outgrowers will contract to sell their nutsto SODEPALM, although an allowance of some 7% of the product is made in theproject for family consumption and direct sales to traders.

ANNEX 11

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

MARKETING ARRANGEMENTS

Oil Palm Products

1. Project production of palm oil and palm kernels would be marketedby PALMIVOIRE, both directly, and through contracts concluded with SOGESCOL asan intermediary. This is a major trading company in fats and oils in Europeand is the commodity trading subsidiary of the Societe Financiere des Caout-choues S.A. (SOCFIN), which is an international plantation company owning andoperating extensive areas of oil palm estates. Three companies of the SOCFINGroup are shareholders of PALMINDUSTRIE and of PALMIVOIRE.

2. An agreement has been obtained from SOGESCOL (which is satisfactoryto the Bank) that Ivory Coast palm produce marketed by SOGESCOL at the requestof PALMIVOIRE, would receive equal treatment with respect to volume and prices,as produce of equal quality from other sources under the control of SOCFIN, orof any of its affiliates or subsidiaries.

3. The domestic market for palm oil, either in crude or refined forms,is still growing. Under a draft agreement, the Blohorn Group, (the onlyindustrial processor of palm oil in the Ivory Coast and a shareholder inPALMIVOIRE and PALMINDUSTRIE) would be supplied with oil, to the extent ofits processing capacity, at ruling cif Europe prices less export costs. Salesof crude palm oil would be made directly by PALMIVOIRE to wholesalers at pricesprobably slightly more attractive.

Coconut Products

4. Production will not start until 1976, and formal arrangements arenot necessary at present.

CSSPPA

5. In common with other agricultural exports, the Caisse de Stabilisa-tion et de Soutien des Prix des Productions Agricoles (CSSPPA) intervenes tostabilize producer prices for palm oil and for kernels. Another function ofCSSPPA is to collect farmer's taxes; and to transfer a substantial portion ofthe collected money to BSIE to promote new crops; and also, to other specialagency budgets. CSSPPA does not intervene directly in the sale of palmproducts.

6. Prices of products are given in Tables 1 and 2.

ANNEX 11Taole 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

COCONUT ESTATES AND OUTGROWERS

PROJECTED SELLJING PRICE FOR COPRA

CIF EUROPE US$ 170 185 200CFAF 47,300 51.,400 55,600(278 p. US$)

VARIA3LES %

Brokerage 0.50Losses 1.00Insurance 0.47Financial costs 0.60

T.57 1,220 1,320 1,430466,080 50,080 54,170

FIXED CHARGES

Supervision 100Handling 340Bags 318Freight 4,479

Sub. Transp. Assoc. 87.50Special commission 18.50Documents 1.50Interest on transit 27.50Taxes: handling 60

bags 47harbor 66

Fiscal stamp 1Export duties 875

6,421 6,420 6,420 6,420

FOB PRICE ABIDJAN 39,660 43,660 47,750

March 15, 1971

IVORY COAST

SlCOND OIL PALM AND COCONUT PI)JECT

Projected Selling Price for Palm Oil and Kernels

O I L K I R N E L S

CIF Euro,pe per ton US$ 140 160 180 130 1451 160

CIF Europe per ton CFAF 278/$ 38,920 44,480 50,040 36,1i40 40,310 44,480Oil Yernel

.vARBIABLS %

Moisture loss, insurance,supervision, unloading 0.95 3.25

Brokerage, selling conmission 0.75 0.75Comission for brokers,

information service 0.50 0.502.20 4.50 860 980 1,100 1,630 1i82O 2,000

FIXSD GHARaRS (CFAF/ton)

Lighterage - 483Port taxes 70 66Handling 238Freight 5,445 3,740Unloading - 353Analyses 20 28Stamp duty, etc. 5 -

Transit 147Transport 325Sacks (1/10) 160

T, 5J40 5T40- 5,540 5S540 5S540 5,54 5Si40 55540

TrOMrax~ CH~.ARMs 6,i400 6,520 6,640 7,170 7,360 7,540

PRICEbefore deduction of export duties 32,520 37,960 43,400 28,970 32,950 36,940

EORT DUTIESTill 1977 2% 4% 650 760 870 1,160 1,320 1,480As from 1978 4 % 8% 1,300 1,520 1,740 2,320 2,640 2,960

FOB IVORY COAST PER TON CFAF e w

Till 1977 31,870 37,200 42,530 27,810 31,630 35,460

As from 1978 31,220 36,440 41,660 26,650 30,310 33,980 H

lhrch 15, 1971

ANNEX 12Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

MARKETS AND PRICES FOR OIL PALM AND COCONUT PRODUCTS

1. Fats and oils may be conveniently divided among vegetable oils,animal fats (butter, lard, tallow) and marine oils (whale and fish oils).Modern refining and hydrogenation techniques have made the various oilsand fats increasingly interchangeable, and an analysis of internationalmarket prices for an individual oil generally has to consider the supply,demand and price developments for all fats and oils. However, for manyoils there is still a primary market for specific uses; only when thisdemand is filled does the oil compete directly with other oils and becomeinterchangeable with them.

2. World production of fats and oils during the 1954-56 to 1967-69period expanded by 3.0 percent yearly. Exports, on the other hand, in-creased by 3.7 percent yearly (Table 1). This expansion in trade couldonly be absorbed at declining world market prices. Thus the index ofprices for the major fats and oils declined by about 1.0 yearly from1958-60 to 1967-69 (Chart I).

3. Most important to world trade in fats and oils is the importdemand in developed countries, particularly Western Europe. Althoughthe rate of growth of import demand in all developed countries increasedslightly in the 1960's as compared with the 1950's (from 3.0 percent to3.5 percent yearly), this increase was mainly accounted for by an increasein import demand in Japan. The rate of growth in import demand for WesternEurope, which accounts for more than 50 percent of world import demand,declined (from 2.7 percent to 2.4 percent yearly). This situation explainsto a large extent the pressure on prices experienced in the past.

4. On the other hand, declining world market prices stimulated theimport demand in developing countries. Their share on world imports in-creased from about 15 percent in 1954-56 to nearly 25 percent in 1967-69.Although there exists a large potential import demand in developing coun-tries, which could reverse the price trend, the lack of foreign exchangein these countries made it difficult to turn the potential into an effec-tive demand. Expansion in import demand in these countries will dependon relatively low fats and oils prices.

5. World exports in the 1970's are expected to grow at about thesame rate as in the 1960's (3.8 percent yearly). The major expansionwill take place in vegetable oils; among these palm oil will experiencethe largest expansion with about one million tons between 1967-69 and1975. The expansion in total exports will not be met by an equally large

ANNEX 12Page 2

increase in import demand at 1967-69 prices, however. Import demand isexpected to increase to about 13.8 million tons in the mid-1970's from10.8 million tons in 1967-69, while export availabilities will rise toabout 14.2 million tons. The potential export surplus will push pricesdownward from their 1967-69 level.

6. The potential surpluses ,are similar in relative magnitude tothose that developed during 1962 and 1968, and it is assumed that theoverall price level for fats and oils in 1975 will settle around the 1968level - or slightly below because of the unusually large drop expectedfor some individual oils in the stiruggle to increase market shares.Those oils which may be considered more valuable from the processors'point of view (such as groundnut o:1l, cottonseed oil, coconut oil andsunflowerseed oil) may settle at about or slightly above their 1962 and1968 levels. After 1975 prices are expected to increase temporarily,encouraging production and exports of annual oilseed crops, but the pricelevel at the beginning of the 1980"s is not going to remain above thelevel predicted for the mid-1970's.

Palm Oil

7. Prices for some oils, mainly palm oil and perhaps soybean oil,are expected to decline below levels achieved at any time in the 1960's.These oils are of lower quality from the processors' point of view, andthey already have a large market shiare or they are expected to increasethis share. The latter point applies particularly to palm oil. Proces-sors will only be induced to increase the relative share of these oilsif there is a sufficient price incentive to do so. Therefore, palm oilprices are expected to settle at $155-$165 per metric ton in 1975 andthereafter. This level compares with $222 per ton in 1962-64 and $190per ton in 1967-69.

8. Palm oil is produced almost entirely in four developing coun-tries: Nigeria, Congo (Democratic Republic), Indonesia and Malaysia.Table 2 indicates the production situation in these and other countriesin recent years. Palm oil production expanded slowly in the past as com-pared with other major fats and oils. The growth rate for world palm oilproduction amounted to only 1.9 percent yearly, compared with 3.0 percentyearly for all fats and oils. The only really significant expansion tookplace in Malaysia. However, in a number of countries, particularlyMalaysia, a considerable expansion in production is planned for thefuture. Some of these plans have already been put into operation. Ifthese developments go according to schedule, total world production willamount to approximately 2.7 million tons by 1980. This would representa growth rate of 5.5 percent between 1967-69 and 1980, and the share ofpalm oil production on total fats and oils production would increase toapproximately five percent, compared with about three percent in 1967-69.

9. Many of the new plantings are export-oriented and a considerableshare of the additional supplies will have to be absorbed by the interna-tional market. Palm oil exports increased very slowly during the last

ANNEX 1 2Page 3

decade, owing largely to the slow growth in production rather than tomarketing difficulties. It is estimated that by 1980 palm oil exports mayamount to approximately 1.9 million tons, compared with about 620,000 tonsin 1967-69. Consequently, the share of palm oil exports on total tradewill probably increase to about 12 percent in 1980, compared with 5.7 per-cent in the earlier period.

10. The palm oil economy thus faces two major problems in thefuture. First, it will experience declining world market prices, aphenomenon that is shared by all major fats and oils. Second, it willhave to increase its share in total usage of fats and oils - particularlyin food end-products.

11. It has already been mentioned that securing an increased shareof the market will require a much greater than average decline in the priceof palm oil as compared to most other oils. At the same time the increasedshare will have to take place within the highly complex technical settingwhich determines the input and output mixes of the world fats and oilsprocessing industry. Here it meets its strongest competition from soybeanoil, fish oil and lard.

12. The economic and technical factors involved in the interchange-ability of fats and oils are very complicated, however, and prohibit asimple substitution of one oil for another. It appears that lard and soy-.bean, fish and palm oils all have characteristics which make them lessdesirable to processors than, for example, groundnut oil and coconut oil.The less desirable aspects of palm oil are the comparatively high contentof the inedible portion of stearin and the tendency to change color andcrystallize during storage. The elimination of these shortcomings requiresresearch which has been lacking in the past, since relatively small suppliesand high prices made the expense not worthwhile. Recently, in anticipationof lower prices, research aimed at improving the substitutability of palmoil has started.

13. While having to compete on technical grounds, palm oil will alsohave to contend against strong price competition. This is illustrated inChart I, which indicates the close price relationship between soybean oi-and palm oil. In future, price developments for these two oils, whichfrom the processors' point of view are of similar quality, will continueto move closer together.

Coconut products

14. Coconut palm cultivation is restricted to a relatively narrowbelt within the tropics, since the tree grows best on alluvial soils underconditions of high temperature and rainfall; hence, palms are mainly foundon islands and in other coastal regions. In most countries the bulk ofthe palms are owned by smallholders for whom the coconut palm is oftenan important source of the basic necessities of life, as well as of a

ANNEX 12Page 4

cash income. The chief commercial. products obtained from the nut arecopra, which is the dried kernel, and coconut oil, which is extracted fromthe copra. In addition, the production of desiccated coconut is of someimportance in the Philippines and Ceylon, as is coir (the fiber from thecoconut husk) in India and Ceylon. International trade in fresh coconutsand copra cake is relatively small. Copra normally has an oil content of64 percent. It is utilized in the production of margarine and compoundcooking fat, in the manufacture of soap and synthetic detergents, and forother industrial uses.

15. Coconut oil and copra (in oil equivalent) comprised about fivepercent of total world fats and oil production in 1967-69. Over 60 per-cent of world coconut output is produced in three countries (Table 3).The Philippines is by far the largest producer and exporter of copra andcoconut oil and accounted for about 40 percent of world production in1967-69. Developments in that country's coconiut industry have been andwill continue to remain the major factor influencing coconut productionand exports in the next decade. Indonesia is the second largest producer,followed by Ceylon.

16. Coconut production (in terms of oil equivalent) expanded by only0.5 percent yearly from 1954-56 to 1967-69, compared with 3.0 percent forall fats and oils production. A nulmber of reasons explain the rather poorproduction performance. Coconuts -are a poorly organized smallholders'crop in the major coconut-producing countries. They provide a food andcash crop for growers, and require very little attention and expenditureas long as output is maintained at a low level of productivity. Becauseof problems involved in the collecting, processing and shipping of copra,buyers insist on relatively large raargins. The price the farmer receivesis usually not sufficient incentive to induce him to increase the producti-vity of his trees. In addition the long gestation period of coconut treesreduces the incentive for farmers to replant as they are uncertain of asituation ten years hence when the trees would be in full production. Toput it bluntly, when prices are good the grower sells more nuts, and whenprices are bad he eats more of them. As long as the trees keep bearinghe feels no need to devote time ancl energy to improving his production.The result is that most of the coconut stands are old and of decliningproductivity, with very little new planting or replanting being done.

17. The situation was somewhat different with respect to new plant-ing in the Philippines. While very, little replanting or new planting tookplace in the northern islands, substantial new planting was undertakenin the south. Up to the early 1960's most of the production was concen-trated in the northern islands. This area is in the typhoon belt andsevere losses were often experienced through typhoon damage. Since theearly 1960's substantial new planting (mainly on large plantations) wascarried out in the south, particularly Mindanao, where typhoon occurrenceis small. So far output has not expanded significantly, because not allof the trees have reached maturity and typhoon damage was heavy duringthe past years in the northern part of the country. In addition severedroughts reduced output in the south.

ANNEX 12Page 5

18. But output (and exports) from the Philippines will expand mainlybecause of the replanting. We estimate that by 1980 about 1.6 milliontons of copra (in oil equivalent) will be produced, of which about 1.2million tons will be exported. Little expansion is expected in otherareas.

19. World exports of coconut oil and copra (in oil equivalent) de-clined by 0.3 percent yearly from 1954-56 to 1967-69. The decline inexports would have been even more severe had not output from new plant-ings in the Philippines slowed down the decline. That country is thelargest exporter of coconut products and accounted for about 60 percentof world exports in 1967-69. Exports from Indonesia, the second largestexporter, have declined since the 1950's and have only recently begun toincrease. Whether this will be a permanent trend depends on an improve-ment in the inter-island shipping situation as well as the developmentof domestic consumption. These factors are uncertain, but it is doubt-ful that a great export expansion can be expected, particularly sincereplanting has been neglected.

20. Relatively little export expansion can be expected from theother coconut growing areas. Tree stands are old and a growing domesticconsumption limits export expansion, a situation which is particularlyprevalent in Ceylon. Thus the major expansion in exports will come fromthe Philippines. The expansion of about 26,000 tons from project plant-ing is only a small contribution to export development, and will accountfor about 1.5 percent of world exports when the project reaches maturity.

21. Taking these factors into account, we estimate that by 1980world exports of copra and coconut oil will be about 1.6-1.7 million tons(oil equivalent). Within this overall trend copra exports will continueto decline, while exports of oil will increase as more and more process-ing will be carried out in the country of origin. From 1960-64 to 1967-69 copra exports declined by 4.0 percent yearly, while coconut oil exportsincreased by 4.6 percent yearly.

22. It is unlikely that the expansion in exports will take place atpast high prices, since the import demand will not expand significantlyat these price levels. The United States is by far the world's leadingimporter of copra and coconut oil (Table 3), and is followed by theFederal Republic of Germany, the United Kingdom and the other WesternEuropean countries, especially France and the Netherlands. The UnitedStates, the EEC and the United Kingdom accounted for 75 percent of worldimports in 1967-69. Australia, Canada, India, Pakistan and Japan are alsofairly important users of coconut oil, while moderate imports are made bya large number of countries in Eastern Europe, South America and Asia.In all these countries, however, long-term import demand has not increasedbecause of limited export availabilities and high prices.

23. In the 1920's coconut oil was the lowest-priced major vegetableoil on the world market. At that time it was widely used for food andtechnical purposes. Since the end of the 1950's it has become the highest-

ANNEX 12Page 6

priced oil, mainly because output ancl exports have failed to expand withdemand, thus encouraging large-scale substitution by less expensive oils.Today coconut oil still has certain irreplaceable uses which make exportdemand inelastic up to a certain point and allow prices to rise steeplyif supplies fall short. If export supplies increase beyond these specialrequirements, however, prices decline to the level of those of other fatsand oils.

24. The special characteristic of coconut oil in food uses is dueto the fact that it has less tendency to become rancid than other oils,

has a high melting point (75° F.) and contains more than 40 percent solidsat 50° F. These qualities make it a necessary ingredient in many bakeryand confectionery products, and to a lesser extent in table oils. Theincrease in utilization in the EEC and in the United States from 1963 to1967 was caused by increased use in the food industry. When world mar-ket nrices continued to rise, imports were reduced drastically in 1968-69.In other importing regions coconut imports declined as other oils replacedcoconut oil in food uses.

25. The technical uses of coconut oil are based on its lauric acidcontent, necessary to produce the lathering quality of soap and detergents,as well as in synthetic rubber, hydraulic brake fluids, synthetic resins,plasticizers and insecticides. Technical use of coconut oil has not in-creased in the major consuming countries (Table 4) in spite of a growingdemand for its end-products. This indicates that some substitution tookplace, and this process can only be stopped if lower coconut oil pricesmake substitution less profitable.

26. If there is to be an increase in future import demand, it seemsquite clear that international market prices will have to come down inorder to encourage increased use - mainly in the food industry. At pasthigh prices it is unlikely that import demand will increase beyond 1.3-1.4million tons by 1980. Our export projections indicate world market avail-abilities of 1.6-1.7 million tons. Prices will have to decline if thissurplus of about 300,000-400,000 tons is to be disposed of.

27. Copra and coconut oil prices are illustrated in Chart I. Thesubstantial price premiums coconut oil enjoyed over competing oils areattributable mainly to the long-run rigidity in total supplies of coprain the face of a rigid demand for specific uses. When this demand wasfilled prices declined sharply (as in 1955-57 and 1961-62), because coconutoil had to then compete with other oils in food uses, particularly marga-rine and shortening. The major competitor in this field is groundnutoil - also a high quality oil from the processors' point of view. Sincefuture coconut oil supplies will exceed its specific demand, prices willhave to decline to allow it to compete with other food oils. We esti-mate that this situation will reduce prices by 1980 to about $280-$290per metric ton, c.i.f. Europe. Assuming that the past price relationshipbetween copra and coconut oil prices prevails, copra prices at theend of the 1970's would amount to about $180-$190 per ton.

ANNEX 12Page 7

28. There is one possibility that the specific demand for coconutoil will exceed our projections, and consequently keep copra and coconutoil prices above the projected price level. Coconut oil derivatives havebeen found to be non-water polluting when used as a detergent base, andit is possible that they will find increasing use in the detergent in-dustry. So far there is no evidence that this will be the case. In 1964a law was passed in the Federal Republic of Germany restricting thie useof detergents to those that are 80 percent decomposable or non-waterpolluting. This has not led to the increased use of coconut oil derivativesin that country, however. Apparently detergent manufacturers have founda cheaper substitute than coconut to comply with the law.

PRICES FOR SELECTED VEGETABLE OILS, cif. EUROPEANPORTS AND INDEX OF EDIBLE FATS AND OILS, 1958 to 1970(U.S. DOLLARS PER METRIC TON OR INDEX)

450 1 450

400 400

COCONUT OIL

A~~~~~~~~~~~

350 350

350 / \- - GROUNDNUT OIL /

300 0I

00, ~ ~ ~ ~ ~ ~ ~ ~ N

* 5 . / / * SOYBEAN OIL *

/0 *\. **% \ 2

200 *:200

C OP R Al\ - * AL

N-"PALM OIL

150 IS0

100 100

PRICE INDEX OF EDIBLE FATSAND OILS (1965 - 66 = 100)

50 50

0 I I I I 0 1958 '59 '60 '61 '62 '63 '64 '65 '66 '67 '68 '69 '70 1971

(PROV.)

IBRD - 5561

Tu1le 1: li; 1r 1) :K: O;TS ()OF Fr.r3 A'- "t!i r;lo)u? -;~ .8'r.m* ' o,iv:' OIL,

AVBP.RGE 19514-56 A:': 1967-69, OIL 1&JPUJr,ALrr

Avx'fa- o 19:1-5.) _ TV_ _ _ _ e -aExnorts au rxpworts as Percent Change

Groups & Type of Oil Exportu Percent E:xDorts Percent per annumI(I,COo of Total (i,003 o." Total in Fxportsm. tons) Exports r. tons) F.r ets 19.Q-56 to 1967-69

Soft oils 2 570 37.11 5 662 51.8 6.3Edible I W4l Po2 .0

Co-tonseed 3671/ 5.3 1951/ 1.8 - 5.0Groundnut 7511 11.0 1,018 9.3 2.3Soybeans 5061/ 7.4 2,0321/ 18.6 11.3Sunflower 26 0.1 891 8.2 31.5Olive 101 1.5 180 1.6 41.5Sesame 110 O.6 82 0.7 5.7Rapeseed 117 0.7 10oll 3.7 18.0

Industrial 623 9.0 6115 5.9 0.3Linseed 470 6.8 378 3.5 - 1.7Castor bean 108 1.6 219 2.0 5.6Tung 115 o.6 18 2 0 014 0.5

Others, n.e.s. 106 1.5 215?! 2.0 5.6

Ha rdl oi'3 2_j.(;! ?t31 2J097 19.2 - 0.3Co onut 1,209 17.6 l,12 :10.6 - 0.3Palm kernel 3914 5.7 306 2.8 - 2.0Palma oil 558 8.1 622 5.7 0.9Babassu 3 - 7 0.1 6.7

Totll vecetablc . 7314 68.8 7L59. 71.0 3.9

hnitaf a 'ats 1.1073 ?1.1) 2 281 20.9 3.5Butter 430 6.2 . 2.0Lard 320 I1.7 325 3.0 0.1Talloui 723 1.0.5 1,398 12.8 5.2

.- arine oils 6714 9.8 891 8.]. 2.1W.Ehale li1Tl 7,0 22 6h -Fish 190 2.8 670 6.1 10.2

Total an irmal 2,17 31.2 3,172 2 .,0 3.1

!*'orld Total 6,881 100.0 10,931 100.0 3.7

1/ Ir.cludes U.S. donations.

2/ Of 'rihich 149,330 tons safflo,,er oil.

Source: Pased on Unilcver statistics.

Tab)5? ?: 1.O.LD .-];:vSJIDl'£TiM,t..{ .iS,..I'*iU.S' <,' C()P.A A';.'0 (G0C3;JL' 0,LJ 1L96;)-6')

(1,00)3 metric tons, oil equivalent)

Average*3.ic'-61 1- 6 5 1966 1967 1-968 3 1, .Y9

ProductionPhilippine s 899 961% 1,031 885 836 832Indonesia 353 322 375 382 383 1i22Ceylon 165' 170 143 122 120 120New Guinea 60 68 6L1 65 76 )i*bza:ibique 38 26 28 1s4 38 ) 735Others 626 591 658 521 665 )

VWorld To'al 3 2,211 2,3h49 2,019 2,123 2, 109

Exports 1/ of Copraand Coconut- OilVnilinmw'. .736 797 915 767 695 570Indonesia 132 93 .115 8t 1h5 123 3/Ceylon *1 2 4 115 87 78 78 68Nei) Guinea 60 68 63 63 73 71 31*bzambitie 36 26 27 37 33 36Others 187 163 1.76 172 215 ).9l4Wo rl i To'vzl 1,275 1,2$:2 1,3b3 1,201 1,ll 1,0('62

IJsp)r Ls V/ of Copraamd Cocoriift Oi1

363 335 t3O 375 339 292Uniited K½8don 85 79 71 66 7' 73S wedern 1b2 h 7 .7 l 2 39 25

t'lielo ... .Cs 31 - 3t0O 3 ;lxI 3. 3f5Japan 57 59 6 0 72 60 70

:'Othcars . . 3-74 321*; 3b5 259 261. . 75 3J. 2 ; i3

'1/ flct exrorts.

2/ Retvaincd imoorts.

3/ Estiinated.

Source: U.S. Denartn,rn' of Akric'Jl-ture, I;ori r A'ric :1ta1C'ic.,lE. 0 1-70 and ;' 10-'7: c3 Av i c .t'i rr K.:t . mmScpto:-iber 1967.FAQ, Coc Onutl t ".-ition (varLous issucs).

2ILthlbc 1 ';0ALJ)rOUTc EXVD273 XID E :*?:T;3 OF PMAI-i OIL

(','JO r.etric ton.,)

Avora-oe1955-59 196ih 3.165 1966 1967 1968 1969

Pro duc LionI;ig,eria n.a. 515 530 508 325 370 1125Cong,o, Deoi. Rep. .n.a. 165 125 147 179 240 200Indonesia n.a. 161 165 174 1741 179 180Malaysia n.a. 123 150 190 226 283 351Others n.a. 2.2 2J9 2h9 261 277 31.2

Vlorld Total 1,265 1,196 1,219 1,268 1,165 13h49 13468

ExnortsUigCaria 180 136 152 146 17 3 23Congo, Do:n. Rep. 160 1211 79 78 115 159 125/1Indonesia 121 133 126 177 131 142 1607iMalaysia 62/2 125 14i1 181 180 268 329Others 33 53 52 WIt 52 92 63

World Total 556 571 550 626 495 667 700

Retained IrnortsEEC 226 279 24i9 268 252 282 294United King7dom 198 116 117 150 98 109 1.39United States 13 3 3 34 29 147 72Japan 20 18 16 20 22 28 II3.Iracq 4 29 50 36 52 514 58Others 92 107 70 914 84 81 93/1

World Total 553 ' 552 -'511 602- :537 . 601 607

n.a. = not available

1/ Estimated.

2/ Excluding trade wlith Singapore

Source: U.S. Departmont of Ac-ricnilture, W,orld Atric l-'uril Pro.u tcand Tracl- July 197U aneid revio-2 1ssTh.$; '.-O,-) Trw 7v-:~c.

t 6w andllt .':kmt, ,U1i:l ,l;-tA-3.-Ln of' n..- ic'0.tl.-J;lon-a .,. -s;-ist.ies, Oct. 1970;; 0j09, £radebL .z&L Scries C.

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

OIL PALM OUTGROWER'S BUDOE'

COSTS AND RETURNS PER HECTARE PLANTED IN 1973

(CFAF)

- 1 0 1 2 3 4 5 6 7 8 9 10 to 17 18 19 to 25

Years 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 - 1990 1991 1992 -1998

PRODUCTION - FFB kgs 2,500 5,000 7,000 9,500 10,500 10,500 10,500 10,500 10,500

RECEIPTS

Cash advances 11,000 3,000 3,000 3,000

FFB @CFAF 4 per kg 10,000 20,000 28,000 38,000 h2,000 42,000 42,000 42,000 42,000

CASH OUTLAYS

Tools 100 100 100 100 100 100 100 100 100 100 100 100 100 100

Fertilizers 3,000 3,000 3,000

Sub-total 1 100 100 100 100 100 100 100 100 100 100 100 3,100 3,100 3,100

Contingencies' 10 10 10 10 10 10 10 10 10 10 10 310 310 310

Total 110 110 Uo 110 110 110 110 110 110 110 110 3,IAo 3,410 3,41o

GROSS CASH BALANCE (110) 10,890 2,890 2,890 2,890 9,890 19,890 27,890 37,890 41,890 41,890 38,590 38,590 38,590

DEBT SERVICE 3,000 5,000 7,000 8,000 5,300 -

NET CASH BALANCE (110) 10,890 2,890 2,890 2,890 9,890 19,890 27,890 34,890 36,890 34,890 30,590 33,290 38,590

LABOR REQUIRMENTS: Mandays 80 45 51 30 25 39 42 45 5o 50 50 50 50 50

CASH REVENUE PER MANDAY - 242 57 96 116 254 474 620 698 738 698 612 666 772

COST OF LABOR: OCFAF 100 + 10% 8,800 4,950 5,610 3,300 2,750 4,290 4,620 4,950 5,500 5,500 5,500 5,500 5,500 5,500

NET CASH BALANCE (8,910) 5,940 (2,720) (4110) 140 5,600 15,270 22,940 29,390 31,390 29,390 25,090 27,790 33,090

after deduction of labor cost

/ Physical 5 % p.a., Price 5 % p.a.

April 8, 1971

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

COCONUT OUTGROWER' S BUDGET

COSTS AND RETURNS FOR ONE HECTARE PIANTED IN 1974

( CFAF)

0 1 2 3 4 5 6 7 8 9 10 to 23 2

4 to 40

Years 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1954 - 1997 1998 - 2015

PRODUCTION - Nuts

Sales to Sodepalm 1,500 6,750 11,250 14,000 14,000 14,000 14,000 14,000

(equivalent copra in tons) (0.3) (1-35) (2.25) (2.8) (2.8) (2.8) (2.8) (2.8)Sales to traders 250 250 1,000 1,000 1 000 1 000 1 000

(equivalent copra in tons) (0.05) (a.o5) (0.2) (0.2) (3.2) (0,2) (0.2)

TOTAL: (equivalent copra in tons) (0.3) (1.4) (2.3) (3.0) (3.0) (3.0) (3.0) (3.0)

FINANCIAL RESULTS

INCOMESales of ruts to:

- Sodepalm OCFAF 5 p. nut 7,500 33,750 56,250 70,000 70,000 70,000 70,000 70,000- traders @CFAF 6 p. nut 1,500 1,900 6,000 6,000 6 o 6,000 6,000

Cash credit 3,000 0 1,000 1,000 1,0003,000 2 1,000 1,000 8 ,500 35,250 57,750 76,000 76,000 76,000 76,000 7,O0

OUTGOING- Land title 2,500- Tools 100 100 100 100 100 100 100 100 100 100 100 100- Fertilizers and Insecticides 14,000 13,100 14,020 13,070 13,930 13,850 13,850- Distribution fees 1,430 1,430 1,430 1,430 1,430 1,430 1,430

Sub-total 2,600 100 100 100 100 15,530 14,630 15,550 14,600 15,460 15,380 15,380Contingencies: iof 260 10 10 10 10 1,550 1,4600 1,60 1116,0 1, 90 1,140 1,5140Total Outgoing 2,860 110 110 110 110 17,080 16,090 17,110 16,060 17,010 16,920 16,920

GROSS CASH BALANCE 140 1,890 890 890 8,390 18,170 41,660 58,890 59,940 58,990 59,080 59,080- Debt service - - - - - 13.000 35.000 40,000 40.000 34-°°° 3h4.000 -

NET CASH BALANCE 140 1,890 890 890 o,390 5,170 6,660 18,890 19,940 21,990 28 ,08O 59,0oo

LABOR RgQUIRENMNT9 - Mandays 31 18 13 8 9 12 15 17 17 17 17 17

Cash re-venue per manday2:before deduction of debt service 4 105 68 111 932 1,514 2,777 3,464 3,526 3,470 3,475 3,475after deduction of debt service 4 105 68 111 932 430 444 1,111 1,173 1,470 1,2475 3,475

Cost of labor NCFAF 100 + 10% cont. 3,410 1,980 1,430 880 990 1,320 1,650 1,870 1,870 1,870 1,870 1.870 r

SURPLUS OR DEFICIT (3,270) (90) (5940) 10 7,400 3,650 5,010 17,020 18,070 23,120 23,210 57,210

after debt service anddeduction of labor cost

/ Physical 5 % p.a., Price 5 E p.a.

May 16, 1971

IVORY COAST

SEOONI OIL PALM AND COCONTIT PROJECT

SODEPALM 1/

Esticeted Project Calh Flow - 1972-1999

(CFAF Millions)

1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984-1987 1988 1989 1990 1991 1992 1993-1997 1998 1999

SOURCE8 OF FUNDS

Loans 11.8 91.1 66.2 32.1 26.8

CcCE 15.4 64.8 75.7 20.1 12.0

Grant 6.6 28.2 34.7 13.8 11.1

SalesProceeds of palm oil and kernels 8.1 51.9 138.0 242.4 345.9 414.7 432.3 432.3 [432.3 432.3 432.3 432.3 432.3 432.3 432.3 384.2 192.1

Reimbursement of Loans(including interest)Outgrowers

1.5 8.5 19.5 28.0 34.0 36.0 36.0 36.0 34.7 26.6 10.6 - - -

FER (CFAp 48,300 p. ha) 1.5 8.0 16.7 21.6 25.6 27.0 24.0 12.0 - - - - - -

TOTAL SOURCES 33.8 144.1 176.6 66.0 58.0 51.9 138.0 245.4 362.4 450.9 481.9 491.9 495.3 492.3 480.3 467.0 458.9 442.9 432.3 384.2 192.1

APPLICATION OF FUNDS

Development cos 33.8 i44.1 176.6 66.0 49.9 25.8

Exploitation Costs 15.9 91.1 203.1 285.0 358.6 410.5 421.2 414.6 40408. 408.0 408.0 408.0 408.0 408.0 408.0 362.7 181.4

Debt ServiceIERD 0.[4 2.7 7.0 10.5 12.7 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 21.0 - - - -

CCCE 0.5 2.9 7.1 10.0 10.9 19.4 19.4 19.4 19.4 19.4 19.4 19.4 19.L 19.4 19.4 19.4 19.4 - - - -

TOTAL APPLICATION 34.7 149.7 190.7 86.5 89.4 157.3 243.5 325.4 399.0 450.9 461.6 455.0 448.4 448.4 448.4 448.4 448.4 408.0 408.0 362.7 181.4

ANNUAL CASH SURPLUS (OR DEFICIT)- (0.9) (5.-6) (14.1) (2 . ) (3 . ) (105.4) (105.5) (80.0) (36.6) - 20.3 36.9 46.9 43.9 31.9 18.6 10.5 34.9 24.3 21.5 10.7

.CDMIATIVE ASH SURPLUS (j.,DEYICIT (0.9) (6.5) (20.6) (41.1) (72.5) (177.9) (283.4) (363.4) (400.0) (400.0) (379.7) (342.8) (155.2) (111.3) (79.4) (60.8) (50.3) (15.4) lo6.1 127.6 138.3

1/ Sunarized overall cash position is at Annex 2, Table 7.

i Ancual deficits would be covered by FER, see Anmex 15, Table 2.

AprilB, 1971

IVORY COAST

SECOND OIL PALM AND COCONCt PROJECT

SODEPALMBstimated Project Cash Flox - 1971-1983

ogram(CFAF Mllions)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983

SOURCES OF FUNDS

Loans

IERD 50.0 96.5 218.8 324.8 387.3 152;6CCCE 73.5 122.3 255.7 348.0 352.0 78.5

Grant

BSIE 23.5 49.8 110.6 181.4 207.5 41.1

Sales

Copra Sales proceeds 1.1 10.5 58.1 178.3 435.4 844.3 1,329.3 1,642.0 1,772.1 1,772.1

Reimbursement of loans (including interest)

Out~owers 2.6 13.5 45.7 111.5 167.6 175.8 166.5

TOTAL SDURCES 147.0 268.6 585.1 855.3 957.3 330.3 180.9 4!48.9 890.0 1,440.8 1,809.6 1,947.9 1,938.6

APPLICATION OF FUNDS

Development Costs

Estates (8,000 ha) 132.9 205.8 431.8 502.0 492.0 142.5 120.7 151.5 106.3 83.1 51.2 30.3 -

Outgrowers (4,500 ha) 14.1 55.2 136.7 316.8 363.0 64.9 86.0 84.2 66.5 38.0 21.5 2.8 -

Kilns and Roads 7.6 16.6 35. 4 91.8 64.8 47.3 93.5 28.6 6.6 - - -

Exploitation Costs .2 10.3 46.6 140.1 330.7 615.7 823.2 924.5 952.8 977.7

Debt service (annuity)

IBRD 1.8 7.1 18.5 38.2 64.o 83.5 137.2 137.2 137.2 137.2 137.2 137.2 137.2CCGE 2.2 8.1 19.5 29.9 40.5 42.9 126.6 126.6 126.6 126.6 126.6 126.6 126.6

TOTAL APPLICATION 151,0 283.8 623.1 922.5 1,061.6 445.2 657.9. 923.7 1,080.9 1,214.7 1,261.0 1,249.7 1,241.5

ANNUAL CASH SURPLUS (OR DEFICIT) (4-0) (15-2) (38.0) (67.2) (104.3) (114.9) (077.0) (474.8) (190.9) 226.1 548.6 698.2 697.1

CUMULATIVE CASH SURPLUS (OR aEFICIT)II (4.0) (19.2) (57.2) (124.4) (228.7) (343.6) (82Q.6) (1,295.4) (1,486.3) (1,260.2) (711.6) (13.4) 683.7

1/ Annual deficits would be covered by surpluses arising from4oil palm estates operations, see sumarized overall cash position at Annex 2, Table 7.

May 16, 1971

SECOTID IVORY COAST OIL PALM PROJECT

DABOU OIL MTLL

Project Cash Flaw 1971 through 19741/

Total1971 1972 1973 197L 1971 through 197L

TOTAI, PROJECT COSTS(see Annex 21 736 1,335.5

FIUA'<CED BY:

IBRD 130.6 233.7 135.Lt 31j.5 534.2

CCCE 76.7 222.1 172.5 62.9 53h.2

Self-Generated Funds 4. 105.7 80.8 36.2 267.1

TOTAL 251.7 561.5 388.7 133.6 1,335.5

1/ Overall PATI-1IITDUSTRIE Cash Flow including Dabou Mill Operating Costs is at Annex 1, Table 5.

m

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

ESTIMATED GOVERNENT PROJECT CASH FLOW 1971 THROUGH 1982

(CFAF l000)

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982

APPLICATION OF FUNDS

BSIE Grants - Coconut 23,490 49,790 110,640 181,360 207,530 41,060 - - - - - -

- Oil Palm - 6,600 28,150 34,720 13,770 11,110 - - - - -

TOTAL APPLICATION 23,490 56,390 138,790 216,080 221,300 52,170 - - - - - -

SOURCE OF FUNIE

Value Added, I/omeai Other Taxes,

Coconut Estates 13,300 20,600 43,200 50,200 50,250 18,400 23,700 38,750 48,700 56,500 55,250 52,350

Cocorut Oatgrowers 1,415 5,650 14,030 .2,795 38,130 7,640 10,860 15,540 23,470 24,670 24,550 23,330

Oil Palm Outgrowers 445 5,415 17,480 19,985 8,565 7,650 10,815 16,060 20,865 25,o85 27,935 28,465

15,160 31,665 74,710 102,980 96,945 33,690 45,375 70,350 93,035 106,255 107,735 lo14,145

EXPORT DUTIES

Coconut Estates - - - 20 210 1,110 3,210 7,350 13,030 19,200 23,000 24,500

Coconut Outgrcwers - - 50 370 1,390 3,890 7,420 9,940 11,020

Oil Palm Outgrowers - - _ - - 200 1,410 6,890 12,030 17,040 20,410 21,280

- - - 20 210 1,360 4,990 15,630 28,950 43,660 53,350 56,800

TOTAL SOURCES 15,160 31,665 74,710 103,000 97,155 35,050 50,365 85,980 121,985 149,915 161,085 160,945

ANNUAL SURPLUS (DEFICIT)_/ (8,330) (24,725) (64,080) (113,080) (124,145) (17,120) 50,365 85,980 121,985 149,915 161,085 160,945

CUMULATIVE SURPLUS (DEFICIT)!/ (8,330) (33,055) (97,135) (210,215) (334,360) (351,480) (301,115) (215,135) (93,150) 56,765 217,850 378,795

1J Indirect taxes estimated at 10% of overall expenditure.

2/ No account has been taken of deficits and surpluses arising under the coconut or oil palm outgrcwers programs (see Anmex 2, tlable 7 and Annex 14, tables 2 and 3). Coconut program

deficits arising during the period 1977 through 1979 would be covered by surpluses arising from Sodepalm oil palm estate operations. Oil palm oatgrower deficits would be met by a

FER (see Annex 15, table 2), although initially short term Government funds may be required in view of the FEE coTmmitment to provide labor housing under the Sodepalm oil palm H w

programs financed by FED.

April 9, 1971

IVORI COAST

SEOND OIL PALN AD ODOONUT PROJECT

FONDS DI EXTE?SION Er DE RENOUVELIJZN (FER)

Estimated Cash Flow - 1971-1982(CFAF Millions )

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 Total

SOURCES OF FUNDS

SODEPALM ESTATES

Reimbursements CFAF 0.80/kg ffb 127.8 194.3 252.4 298.5 331.8 347.1 350.0 350.0 350.0 350.0 350.0 350.0 3,651.9Reimbursements short-term advance - - - 300.0 300.0 - - - - - - - 600.0Rent for housing 1/ 9.0 42.6 83.6 100.4 111.5 123.2 123.2 123.2 123.2 123.2 123.2 123.2 1,209.5

SODSPAIM Outgeravers7HIranced byFEP/SIE)

Loan Repayments 4.4 10.3 21.7 29.8 41.6 48.6 53.5 56.1 53.2 47.4 38.1 19.2 423.9

FVONS SOCIAL

Reimbursements of FR Advance - - - - - - 527.2 - - - - - 527.2

TOTAL SDURCES 141.2 247.2 357.7 728.7 784.9 518.9 1,053.9 529.3 526.4 520.6 521.3 492.4 6,412.5

APPLICATION OF FUNDS

Program of Housing

FER funds 591.9 505.2 313.7 337.4 222.3 232.9 - - - - - - 2,203.14Fonds Social 139.2 107.0 95.0 84.0 83.0 - - - - - - - 508.2

SODMPALR Outgrnwers

Credits made to outgrowers1st project: CFAF 63,000 p.ha - - - 9.1 20.4 41.9 70.2 89.1 102.3 106.8 106.8 106.9 653.52ad project: CFAF 48,300 p.ha - - - - - - - - 1.5 8.0 16.6 21.6 47.7Deficits on outgrowerd programslot project, 74.3 78.7 70.5 187.6 250.6 224.3 171.9 171.9 122.6 80.4 35.9 16.8 1,485.52nd project - 0.9 5.6 14.1 21.0 32.0 105.4 105.5 80.0 36.6 - (20.3) 380.8

TOTAL APPLICATIONS 805.4 691.8 484.8 632.2 597.3 531.1 347.5 366.5 306.4 231.8 159.3 125.0 5,279.1

AWIUAL CASH SURPLS (CR DEFICIT) (664.2) (444.6) (127.1) 96.5 187.6 (12.2) 706.4 162.8 220.0 288.8 352.0 367.4 1,133.4

CUMULATIVE CASH SUNPLUS(OR DEFICIT) (687.7) (1,132.3) (1,259.4) (1,162.9) (975.3) (987-5) (281.1) (118.3) 101.7 390.5 742.5 1,109.9- December 31,1970 - 23.5)

1/ After deducting cost of maintenance.

ANNEX 16Page 1

IVORY COAST

SECOND OIL PALM AND COCONUT PROJECT

CALCULATION OF THE ECONOMIC RATE OF RETURN AND SENSITIVITY ANALYSIS

1. The estimated economic rates of return from investments in theproject on the basis of conservative estimates of yields, costs free ofidentifiable taxes but including cash cost of labor and the price assumptionsset out in para 6.05 and 6.06 of the main report and Annex 12 are as follows:

Oil palmsOutgrowers: 17.2%

CoconutsEstates : 18.1%Outgrowers: 16.4%

Overall : 17.5%

For the purpose of the considerations below these rates are referred to asthe standard rates of return.

Increases and decreases of Income and Expenses

2. An analysis has been made of the sensitivity of the standard ratesof return to alternative assumptions concerning increases and decreases ofincome and expenses by 10%.

Expenses 90% 100% 110%

Oil Palm Incomeoutgrowers 90% 17.7% 14.5% 11.7%

100% 20.5% 17.2% 14.5%110% 22.5% 19.7% 17.2%

Coconut IncomeEstates 90% 18.2% 16.2% 14.4%

100% 20.1% 18.1% 16.3%110% 21.9% 19.9% 18.1%

Coconut Incomeoutgrowers 90% 16.4% 14.6% 13.0%

100% 18.2% 16.4% 14.8%110% 19.9% 18.0% 16.4%

ANNEX 16Page 2

Cost of labor

3. It has been assumed that the outgrowers would pay their hired laborat the daily rate of CFAF 100 which is the rate currently paid on smallholdings. The minimum agricultural daily wage enforced on industrial estatesis CFAF 210. If this rate was paid by the outgrowers the economic rate ofreturn would be as follows:

Oil palm outgrowers: 13.2%

Coconut outgrowers: 14.6%

4. It is assumed that estate coconuts would have a productive life of40 years. This is conservative in comparison with the known productive lifeof existing coconut plantings in the Ivory Coast and elsewhere. However,since hybrid coconuts have not been grown for 40 years the sensitivity of thereturn to lives of 20 and 30 years have been calculated:

Coconut estates Coconut outgrowers

20 years 17.1 15.230 years 17.9 16.240 years 18.1 16.4

5. Details of the calculations of the standard rates of return forcoconut estates, coconut outgrowers and oil palm outgrowers are shown attable 1 to 4 below.

IVORY COAST

SECOND OIL PAW AIID COCONUT PROJECT

OTI PALM OUTt R1OJEWS

ESTIMATED ECONOMIC RATE OF RETURN(GMAF '00°)

-1 0 1 2 3 b 5 6 7 8 9 10 11 12 - 25 26 27

Yers 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 - 1997 199d 1999

P.ECTAB!S

Planting 500 2,000 2,000

r2ture 500 2,500 4,500 4,500 4,000 4,000

Mature 500 2,500 1,500 b,500 4,500 4,500 b,500 4.500 4,500 4,000 2,000

P1100007281

FFB (Tone) 1,250 7,500 18,500 28,750 38,250 45,250 47,250 47,250 47,250 42,000 21,000

oil (Tone 175 1.125 3,100 5,500 7,900 9,500 9,900 9,900 9,900 8,800 1,400

Kern.ls (ToN) 50 315 825 1,390 0,910 2,260 2,360 2,360 2,360 2,100 1,050

INCOME

Oil NIO3, 6,5oo 41,900 113,000 200,400 287,900 346,200 360,800 360,800 360,800 320,600 160,300

Ke-rnls - 1,580 9,960 25,000 42,000 58,000 68,50 71,500 71,500 71,500 63,600 31,800

Total 8,080 51,860 138,000 242,400 345,900 414,700 432,300 132,300 132,300 384,200 192,100

De1ool,a-nt: Sodepobo 33,800 144,030 176,600 65,970 49,950 25,800

Outgrovers 4,160 20,350 30,800 23,270 19,690 12,510 5,720

Opratioo O Sdtgovep rs 11,810 65,170 139,830 160,250 326,730 254,120 257,750 251,150 240,550 217,360 108,680

outgrowero 2,200 11,170 20,70 22,390 24,150 25,250 26,900 33.500 010100 38,640 17,820

Total 4,h60 51,15o 174,830 199,870 85,660 76,SLO 108,160 160,620 208,610 250,880 279,370 284,650 281,650 281,650 253,000 126,500

BoforoMludf irt befLiits (4,460) (54,150) (174,830) (199,870) (85,660) (68,120) (56,300) (22,620) 33,760 95,020 135,330 117,650 117,650 117,650 131,200 65,600

Add: -IAdird,t Benefitsl 900 41,00 10,700 16,300 21,100 21,600 25,600 25,600 25,600 22,800 11,400

FIRANCIAL SRFPLO2S jOR DEFICIT) (1,460) (54,150) (171,830) (199,870) (85,66o) (67,520) (51,900) (11,920) 50,060 116,120 159,930 173,250 173,250 173,250 154,000 77,000

e~a'oe do&ucton oit x es andincluding indirect benefits

Estimated tacos on expen.e..6 445 5,415 17,480 19,985 8,565 7,650 10,815 16,060 20,865 25,o85 27,935 28,465 28,465 2S,465 25,300 12,650

E.poot dotiee 200 1,110 6,890 12,030 17,010 20,110 21,280 21,280 21,280 18,910 9,470

445 5,415 17,480 19,905 8,565 7,850 12,225 22,95o 32,895 12,125 43.315 49,745 49,745 49,745 11,240 _2,120

7/EC.NVO,ML§URSVBP,L, 12,id,4,,DfflE,1CT (4,015) (48,735) (157,350) (179,885) (77,095) (59,670) (39,675) 11,030 82,955 158,215 208,275 222,995 222,995 222,995 198,240 99,120

-- Econor rate of return, 17.2.

1/ Oln pls, on the bosis of 10$160 - CIF European Port..! KIerolo on the basis of US$145 - CIF European Port.

3/ Including pro.cesing.7; Sariogs in proces.ing noets for existing holdings.7/ Aftur pY,ent of indirect t.-e. .od export dutdes.

1/ Estimated at 18% Of overoll eopenditure.7/ After adding back indirect taxes and oopendituro.

April 10, 1971

TVOEY COAST

SECOND OIL PALM AND COCONUT PROXI=CT

SODEPALN

COCONUT 1STATE3

ESTIMATED ECONOMIC PATE OF EETUS2

(CFAF 'oO0)

0 1 2 3 4 5 6 7 8 9 10 13 12 to 40 41 42 43 44Tears 1971 1972 1973 1974 1975 1976 1977 1978 199 1980 1981 1982 1983 - 2011 2012 2013 2014 2015

PIAnting 500 800 2,000 2,200 2,500 - - - - - - - - -Development (icmature) 500 1,300 3,300 5,000 6,700 4,700 2,50o - - - - - -Operation (eature) 500 1,300 3,300 5,500 8,000 8,000 8,000 8,00O 8,000 8,000 7,500 6,700 4,700 2,500

PRODUCTION - Copra (Tonm) 25 240 1,270 3,670 8,395 14,890 21,960 26,250 28,000 28,000 26,250 23,450 16,450 8,750

INCOME - on the basis of 1,100 10,500 55,500 160,0o0 366,000 650,000 959,000 1,146,000 1,222,000 1,222,000 1,146,00o 1,024,000 718,ooo 3B2,0000S$185 p.t.(FOB CFAF 43,660)

mzNS

Development costs 120,800 187,120 392,630 456,330 447,310 129,470 109,730 137,710 96,630 75,5oo 46,500 27,500Operating coats 210 9,320 37,610 105,590 214,570 346,070 438,220 455,800 448,490 469,280 414,800 373,000 265,000 140,000Sob total 120,800 187,120 392,630 456,540 456,630 167,080 215,320 352,280 442,700 513,720 502,300 475,990 469,280 114,800 373,000 265,000 140,000Contingencies O 10% 12,080 18,710 39,260 45,650 45,660 16,710 21,530 35,230 44,270 51,370 50,200 47,600 46,930 41,480 37,300 26,500 14,000Total lepenso 132,880 205,830 431,890 502,190 502,290 183,790 236,850 387.510 486,970 565,090 552,530 523,590 516,210 456,280 110,300 291,500 154,000

FINkNCIAL SURPL1S or (DEFICIT)'/ (132,880) (205,830) (431,890) (501,090) (491,790) (128,290) (76,850) (21,510) 163,030 393,910 593,470 698,410 705,790 689,720 613,700 426,500 228,000

Add estimated indirect taxes" 13,300 20,600 43,200 50,200 50,250 18,hOO 23,700 38,75n 18,7G0 56,500 55,250 52,350 51,600 45,65o 41,300 29,150 15,400!port duties S CFAF 875 p.t. 20 210 1,110 3,210 7,350 13,030 19,200 23,000 24,500 24,500 23,000 20,500 14,400 7,700Total taxes 13,300 20,600 43,200 50,220 50,460 19,510 26,910 46,100 61,730 75,700 78,250 76,850 76,100 68,650 61,800 43,550 23,100

ECONOMIC SURPLUS or (DEFICIT) (119,580) (185,230) (388,690) (450,870) (441,330) (108,780) (49,940) 24,590 224,760 469,610 671,720 775,260 781,890 758,370 675,500 470,050 251,100

ECONOMIC RATE OF 887URN2 18.1 %1/ After payent of indirect taxes and export duties.

3/ Estinated at 10 % of overall expenditure.

]/ After adding back indirect taxes and export dcaties.

April 9, 1971

IVoRY COAST

SECOND OIL PALM AND COCOlNT PROJECT

COCONUT OUTOROVER3S

ESTIMATED ECONOMIC RATE OF RERIlN

(CFAF '000)

-' 1 0 1 2 3 4 5 6 7 8 9 10 l1 to 40 41 42 43

1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 - 2012 2013 2014 2015

RNCTA8IO

Plantirg - 200 5OO 1,550 2,250

Iature 200 700 2,250 4,500 4,300 3,800 2,250

yature - - - - 200 700 2,250 4,500 4,500 4 4,500 4,500 4,500 4,300 3,800 2,250

PRODUCTION

Note sold to traders ('000) 50 175 715 1,650 2,815 4,500 4,500 4,300 3,800 2,250

Copra (Tons) 60 420 1,590 4,450 8,485 11,360 12,600 12,600 12,040 10,640 6,300

INcOMR

Distribution fees 320 1,100 3,530 7,050 7,050 7,050 7,050 6,740 5,960 3,530

sales of copra 2,620 18,340 69,420 194,290 370,460 495 980 550 120 550,120 525,670 464,530 275,050

Sales of nuts to traders 300 1,050 4,290 9,9C0 16,890 27,000 27,000 25,8oo 22,800 13,500

Total 2,620 18,960 71,570 202,110 387,410 519,920 584,170 584,170 558,210 493,290 292,080

EXPONSES

DevelopmlfntSodepalm 14,130 55,180 136,700 316,830 363,020 64,930 85,960 84,240 66,480 37,950 21,450 2,750

Outgrowers 1,260 3,550 11,080 18,300 7,590 5,000 2,230

OperationSodepalm 3,700 13,710 55,960 127,190 136,050 146,070 151,470 153,560 134,540 118,900 71,640

Outgrowers 220 4,240 13,94O 44,200 79,060 84,410 85,540 85,540 80,760 71,380 42,270

Total 14,130 56,440 140,250 327,910 381,320 76,440 108,910 156,360 237,870 253,060 251,930 239,760 239,100 215,300 190,280 113,910

FINANCIAL SURPLUS (or DEFICIT) (14,130) (56,440) (140,250) (327,910) (381,320) (73,820) (89,950) (84,790) (35,760) 134,350 267,990 341,410 345,070 342,910 303,010 178,170

Add 2/!Tsi.ated indirect taxes 1,415 5,650 14,030 32,795 38,130 7,640 10,660 15,540 23,470 24,670 24,550 23,330 23,270 20,915 18,490 11,070

Export duties 9 OFAF 875/ton - copra 50 370 1,390 3,890 7,420 9,940 11.020 11,020 10,530 9,310 5,510

Total taxes 1,h415 5650 14,030 32,795 36,130 7,690 11,230 16,930 27.360 32.090 34.490 34.350 34.290 31.445 27,800 16.580

ECONOMIC SURPLUS (or DEFICIT)7 (12,715) (50,790) (126,220) (295,115) (343,190) (66,130) (76,720) (67.660) (8,ho0) 106,440 302,480 378,760 379,360 374.355 330.1ol 194.750

aLiter deductsion of taxes

ECONOMIC RATE OF RETURN: 16.4%.

1/ After pent of indirect taxes and export duties.

2/ Eotilmated at 10% of overall expenditure.

3/ After adding ack indirect taxes and export duties.

A,Dril 10, 1971

IVORY COAST

SEOOND OIL PALM AND COCONUT P1RJECT

SOIEPALM

COCONUT PROGRAM - 1968-1971

UFDATED ESTIMATED ECONOMIC RATE OF REORMN

(CFAF Million)

0 -1 2 3 14 5 6 7 8 9 10 11 12 13 14 to 59

1966 1969 1970 1971 1972 1973 1974 1975 1976 1977 978 1979 1980 1981 1982 - 2027

HECTARES

Planting 1,400 2,100 3,000 - - - - - - - - - - - -Davelopmnt (immature) 1,R100 3,500 6,50o 6,500 6,500 6,500 6,500 5,100 3,000 - - _ _ _Operation (mature) - - - - - - - 1,400 3,500 6,500

YIELDS (Tons/Ha)

Estates 0.25 1.50 2.30 2.60 2.70 2.70 2.70 2.70Outgrovers C.2D 1.20 1.85 2.10 2.20 2.20 2.20 2.20

PRODUCTION - Copra (Tons) 350 2,595 6,840 12,105 14,950 15,970 16,270 16,270

INCOME

Riijbursement 0.4 2.9 7.6 10.4 11.5 11.9 11.9Sales of copra before deduction of export duties 16 116 305 539 666 711 724 724

TOTAL INCOME i6 116.4 307.9 546.6 676.4 722.5 735.9 735.9

7PENDITURE 232.9 313.2 339.9 144.5 131.3 139.8 185.3 200.8 221.6 205.1 247.9 269 283 238.7 238.7

ADDITIONAL EXPENDITURES

Roads 6.9 15.1 32.1 1 ,47.4 10.9lRAlnS 36 ,48 43 85 26 6

Sub-total 6.9 15.1 32.1 83.4 58.9 43 85 26 6Contingencies .7 1.5 3.2 8.3 5.9 4.3 8.5 2.6 .6

Total 7.6 16.6 35.3 91.7 61,.8 47.3 93.5 28.6 6.6Less taxes -0.8 1.7 3.6 9.2 6.5 4.7 9.14 2.9 0.7

_ .8 14.9 31.7 82.5 58.3 12.6 84.1 25.7 5.9

TOTAL EXPENDITURE 232.9 313.2 339.9 1,44.5 138.1 154.7 217.0 283.3 279.9 247.7 332.0 294.7 288.9 238.7 238.7

ECONOMIC SURPLUS (OR DEFICIT) 4 (232.9) (313.2) (339.9) (144.5) (138.1) (154.7) (217.0) (267.3) (163.5) 60.2 214.6 381.7 1,33.6 97.2 497.2

ECONOMIC RATE OF RETURN: 11.8%.1/ Financed under Loan 613 IVC.2/ See Amnex 15, table 3 of Report No. TO-603C dated April 25, 1969.3/ Indirect taxes (10% of overall expenditures)

B/ Before deduction of Indirect taxes and export duties.

April 11, 197

. M A L I UP PER VOLTA !(._} & fmJ t.1 a J \ IVORY COAST

' z . ) > ^\.1 _._.s I SECOND OIL PALM AND COCONUT PROJECT

I / '> IVORY COAST SODEPALM OIL PALM ESTATES AND OUTGROWER PROGRAMSOIL PALM LITATES

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., Ce1. bo ndaries Estates created under fED grants, Agreement C. 183

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centers - Estates created or being created under FED grants, Agrosinont C. 331

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