Taking a 36,000ha Oil Palm Plantation in Ivory Coast from Crisis to Success

Unilever are a long-standing client of Siggs & Co Ltd. When their oil palm plantations in Ivory Coast had lost $15,000,000 annually for two successive years, Siggs & Co MD James Siggs was called in to make a rapid assessment and make proposals to get the company back into profit. James proposed that the entire senior expat management team be fired, a new Ivorian team be appointed and Siggs & Co. be engaged to turn the business around. Unilever accepted the proposals, and the Siggs & Co. team got to work. The Siggs & Co turnaround process was implemented, and within a year production increased by 64%, adding $21,000,000 to the bottom line. The Siggs & Co. team exited after a further year; the company was subsequently sold for $170,000,000.

The company was cash-strapped due to low production and high costs. Unilever had been pouring money in, but had now reached the point where no further funds would be made available.

As a first step, Siggs & Co. MD, James Siggs, went to the Ivory Coast to make a rapid analysis of the situation. After a brief visit to a few plantations the situation became clear: production was down because there was no follow-up from head office in Abidjan to ensure that company procedures were being followed. As a consequence, 30-40% of the production was being left in the field. James proposed that if the ex-pat management team in Abidjan had been fired and replaced with Ivoirians, Siggs & Co. would then provide support to the new team on a visiting basis.

Unilever Head Office in London accepted this radical proposal. The Siggs & Co team immediately started implementing the Siggs & Co turnaround process:

1. Identify the low-hanging fruit and target these;
2. Identify road blocks, restructure and reorganise
3. Identify the internal winners and work with them;
4. Introduce focused management processes and systems;
5. Communicate, communicate, communicate;
6. Follow up, follow up, follow up;
7. Exit leaving a renovated and motivated management team focused on delivering results.
   
   

In the first year, production increased by 64%, adding $21,000,000 to the bottom line without an injection of capital, the low-hanging fruit. In the second year, production increased by another 17%, and even though the price of palm oil dropped by 9%, another $750,000 was added to the bottom line. The ongoing benefit was a reinvigorated management team, solving problems and delivering results with pride in themselves and their company. The company was sold two years later for US$170,000,000 to a major oil palm company from Singapore.