Zaire Appraisal Of

ReportNo. 1592-ZR Zaire Appraisalof the FILECOPY Oil PalmProject Public Disclosure Authorized March29, 1978 Central AgriculturalDivision EasternAfrica ProjectsDepartment FOR OFFICIAL USE ONLY Public Disclosure Authorized Public Disclosure Authorized

Public Disclosure Authorized Document of the World Bank

This document hasa restricteddistribution and may be used by recipients only in the performanceof their official duties.Its contents may not otherwise be disclosedwithout World Bankauthorization. CURRENCY EQUIVALENTS

Z 1 3 1 SDR Z 1 = US$1.153 Z 1 million m US$1,153,000 US$1 = Z 0.867 US$1 million = Z 867,000

WEIGHTS AND MEASURES

1 hectare (ha) = 2.47 acres 1 kilometer (km) = 0.624 miles 1 kilogram (kg) = 2.204 pounds 1 metric ton (ton) = 2,204 pounds

ABBREVIATIONS

ADF = African DevelopmentFund BADEA` = Banque Arabe pour le Developpement Economiqueen Afrique Busira (Busira-Lomami) = Entreprisesagricoles et industrielles de la Busira au Lomami CCCE = Caisse centrale de cooperationeconomique CCP = Compagniede commerceet de plantations CELZA = Cultures et elevagesau Zaire ENTRIAC = Entreprisesindustrielles, agricoles et commerciales ONATRA = Office national des transports PLZ - PlantationsLever au Zaire SOFIDE = Societe financierede developpement

FISCAL YEAR

January 1 - December 31 (Governmentand companies involved in Project) FOR OFFICIAL USE ONLY

ZAIRE

OIL PALM PROJECT

TABLE OF CONTENTS

Page No.

SUMMARY AND CONCLUSIONS ...... i -iii

I. INTRODUCTION ...... e...... 1

II. BACKGROUND ...... e ...... 2

,A. General ...... e...... 2 B. Agricultural Sector .*...... 3 C. The Oil Palm Sector ..... *et...... ** ...... 3 D. Agricultural Services ...... 7

III. THE PROJECT AREAS ...... *o...... 8

IV. THE PROJECT ...... 9

A. General Description ...... * ...... 9 B. Detailed Features ...... o...... o... .o ...... 10 C. Cost Estimates ...... 15 D. Financing ...... 0...... 17 E. Procurement .... e ...... o ...... *... * *. 18 F. Disbursement ...... 19 G. Accounts and Audits ...... 20

V. ORGANIZATION AND MANAGEMENT ...... 22

VI. PRODUCTION. MARKETS AND PRICES, AND CASH FLOWS ...... 22

VII. BENEFITS AND JUSTIFICATION ...... 23

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS ...... 25

This document hasa restricteddistribution and may be used by recipientsonly in the performance | | of their officialduties. Its contents may not otherwise be disclosedwithout IFC authorization. - 2-

ANNEXES

1. Production,Marketing and Prices of Palm Oil

Table 1: World Production of Selected Fats and Oils Table 2: Palm Oil Production by Major Producers Table 3: World Exports of Palm Oil Table 4: World Exports of Selected Oils and Fats Table 5: Prices of Selected Fats and Oils Table 6: Palm Oil Production in the Northern Area with and without Project Table 7: Palm Oil Production in the Southern Area Table 8: Oil Palm Project - Yield Projections Table 9: Production due to Project Table 10: Estimated Local Consumption of Palm Oil Table Il: End Use of Palm Oil Table 12: Total Production and Use of Palm Oil Table 13: Export Prices for Palm Oil

2. PlantationsLever au Zaire (PLZ)

3. Busira-Lomami

4. Compagnie de commerce et de plantations (CCP)

5. Research Training

6. Project Cost Estimates

Table 1: Summary of Project Cost Table 2: Project Base Cost: PLZ, Lokutu Table 3: Project Base Cost: PLZ, Yaligimba Table 4: Project Base Cost: PLZ, Boteka Table 5: Project Base Cost: Busira-Lomami Table 6: Project Base Cost: CCP Table 7: Project Base Cost: Management and Technical Training

Appendix 1: Establishment Cost per Hectare Appendix 2: Plantation Maintenance Cost per Hectare

7. Financial Projections of the Companies

Table 1: PLZ Financial Projections Table 2: Busira-LomamiFinancial Projections Table 3: CCP Financial Projections -3-

ANNEXES

8. Financial and Economic Analysis

Table 1: Palm Oil Price Projections Table 2: Project Cost and Returns: PLZ Table 3: Project Cost and Returns: Busira-Lomami Table 4: Project Cost amd Returns: CCP Table 5: Project Internal Financial Rate of Return and Sensitivity Analysis Table 6: Project Internal Economic Rate of Return and Sensitivity Analysis 9. Government Cash Flow - Resulting from the Project 10. Training 11. Estimated Schedule of Disbursements of IDA Credit 12. Key Indicators 13. Project Implementation Schedule

MAP No. 12834

ZAIRE

OIL PALM PROJECT

SUMMARY AND CONCLUSIONS

(i) In the face of stagnation in the traditional agricultural sector and reduced production from the modern plantation sector, the Government of Zaire has recently determined that the highest priority should be given to the rehabilitation and development of the country's agriculture. The Government now realizes that major efforts need to be undertaken to reverse the alarming trends of rapidly increasing agricultural imports and declining exports. Thus, production of palm oil on commercial estates decreased from about 240,000 ton in 1959 to about 125,000 ton in 1976, while production from natural palms is estimated to have decreased from about 55,000 ton to 45,000 ton. Lower production, combined with increasing domestic consumption of palm oil, have caused Zaire's official exports to decline from about 190,000 ton in 1959 to about 40,000 ton in 1976. If this trend were to continue Zaire would need to import palm oil in the next few years and prompt action is therefore necessary to avoid that situation.

(ii) In the present circumstances the Government of Zaire considers that the rehabilitation of a number of existing commercial oil palm plantations offers the best prospects for future production increases at the least cost. Additional courses of action include the establishment of new, large, industrial plantations, smallholder schemes and the improvement of production in the natural palm tree areas. All these alternatives are relatively costly or risky, and are uncertain to result in substantial production increases rapidly. Assigning priority to rehabilitation efforts has the clear advantage that full use would be made of the infrastructure and management remaining on the existing commercial estates.

(iii) At the request of the Government of Zaire and with the assistance of an IBRD/FAO Cooperative Program team, three companies (representing about 60% of Zaire's commercial oil palm industry) have drawn up investment proposals for the rehabilitation of their existing plantations. The three companies are: Plantations Lever au Zaire (PLZ), Busira-Lomami (Busira) and Compagnie de Commerce et de Plantations (CCP). Along with most of Zaire's commercial and industrial enterprises the companies were de-nationalized in September 1976 and restored to their original foreign shareholders.

(iv) The Project would, over five years (1978-1982), provide for the planting of 12,215 ha oil palm; the renewal of equipment of three oil mills; the procurement of earth moving equipment, trucks, tractors and staff vehicles construction or repair of workers and staff houses and social infrastructure; training; employment of ad.ditionalstaff; technical assistance, feasibility studies and pilot programs to develop agricultural production and raise the standard of living of the rural population in the Project areas. Apart from - ii -

the technical assistance component, for which the Department of Agriculture would be responsible, the Project would be implemented by the companies mentioned in paragraph (iii). A committee of Government and company representatives under the chairmanship of the Director General of the Department of Agriculture would assess the Project's progress, review annual work programs and budgets and coordinate Project related matters.

(v) The overall cost of the Project including physical and price contingencies, is estimated at US$47.4 million of which about 74% would be invested in PLZ. About 56% of Project cost (US$26.4 million) requires external financing while the balance would be financed by the companies themselves. In addition to an IDA Credit of US$9.0 million, the African Development Fund (ADF) is expected to contribute about US$6.1 million, the Arab Bank for Economic Development in Africa (BADEA) about US$4.4 million and the Caisse Centrale (CCCE) about US$4.2 million. US$0.7 million worth of land clearing equipment, which PLZ ordered in 1977, is being financed out of a US$16.6 million US commodity import loan to the Government.

(vi) IDA and ADF would lend to the Government, CCCE would lend its funds to SOFIDE and BADEA would lend directly to PLZ and Government. The onlending terms for IDA, ADF and CCCE funds would be identical with a repayment period of 15 years, including five years of grace, and an interest rate of 10% per annum. The companies would take the foreign exchange risk on all off-shore expenditures and the Government would bear this risk on expenditures in local currency to the extent that these are financed with external funds. SOFIDE would administer loans to be made to the companies, as an intermediary for CCCE's funds (on which SOFIDE would receive a 3% margin) and as an agent o Government for IDA funds to be onlent to the 2 small companies (for which SOFIDE would receive a fee).

(vii) Vehicles, trucks, tractors, tools, fertilizers and pesticides would be procured through international competitive bidding in accordance with Bank guidelines. About one-half of the oil mill equipment would also be procured through ICB; for the other half standardization with existing equipment is essential and direct procurement would therefore be accepted. Because of the isolated location of the plantations the construction of houses and other buildings and the civil works and erection of equipment for the oil mills would be undertaken on force account by the oil palm companies themselves.

(viii) The new plantings to be made under the Project would produce about 33,000 ton palm ail and about 8,000 ton palm kernels at full maturity in 1995. In that year the Project's output, with a value of about US$18 million, is expected to represent about 18% of Zaire's total palm oil production (186,000 ton). Without the Project, Zaire's deficit of palm oil would reach about 30,000 ton in 1990 and 80,000 ton in 1995.

(ix) The Project's internal economic rate of return is estimated at 16%; the internal financial rate of return for each of the companies' parts of the Project ranges between 16% (CCP) and 21% (Busira). The major risk - iii - facing the Project is that the planting program would need to be reduced if the companies were unable to recruit sufficient numbers of plantation workers. Another risk is the uncertain river transport situation which could impair the delivery of essential supplies and the shipment of the companies' palm oil and palm kernels. Delays in the planting program and transport delays would possibly result in higher overhead costs per ton of oil produced and probably also in lower revenues. Both the IER and the IFR would decrease by about two percentage points if for the above (or any other) reasons the costs were to increase by 10%; a further reduction by another two percentage points would occur if simultaneously the Project's benefits were to decrease by 10%. The Project provides for better housing and social services to reduce the risk of labor shortages. The level of the needed increase in the wages of plantation workers is now being discussed between the Government and the companies while in the future the Project coordinating committee would regularly review this aspect. Recent measures to strengthen ONATRA's management and operational staff are expected to reduce the river transport risk for the Project.

(x) About 3,500 plantation laborers' jobs would become available as a result of the '>roject. Besides net earnings (at present about US$200 per year for a full-time worker) they would also benefit from company housing and social services under the Project. The net income of the participating companies on Project investments is expected to reach a level of about US$3 million per year during the period 1987-1997. Of this, 52% would be payable to the Government in the form of company taxes while the balance would partly be retained by the companies and partly distributed to the shareholders.

(xi) Since 1967 Zaire has received 13 IDA Credits totalling US$192.5 million, and one IBRD Loan of US$100 million (Gecamines). Of the IDA Credits three have been for the agricultural sector. A 1973 Livestock Project had a slow start and experienced management and technical difficulties as well as cost overruns. Some adjustments in expenditures may be necessary in order to achieve the Project's main objectives by 1979. The two other Credits were recently extended for a Cotton Development Project (1976) and for a second Livestock Project (1977).

(xii) The Project is suitable for an IDA Credit of US$9.0 million to the Government of Zaire.

ZAIRE

OIL PALM PROJECT

INTRODUCTION

1.01 In the face of stagnation in the traditional agricultural sector and reduced production from the modern plantation sector, the Government of Zaire has recently determined that the highest priority should be given to the rehabilitation and development of the country's agriculture. The Government now realizes that major efforts need to be undertaken to reverse the alarming trends of rapidly increasing imports of food stuffs and declining agricultural exports. Thus, production of palm oil on commercial estates decreased from about 240,000 ton in 1959 to about 125,000 ton in 1976 and production from natural palm groves is estimated to have decreased from about 55,000 ton to 45,000 ton over the sane period. Lower production, combined with increasing domestic consumption of palm oil, have caused Zaire's official exports to decline from about 190,000 ton in 1959 to about 40,000 ton in 1976. If this trend were to continue Zaire would need to start importing palm oil in the next few years and prompt action is therefore necessary to avoid that situation.

1.02 The Government also realizes that the rehabilitation of existing commercial oil palm estates, rather than establishing new plantations or supporting the small traditional oil palm sector (paragraph 2.06), offers the best prospects for increasing, within a reasonable time period, the production of oil. Along with the other foreign-owned businesses in Zaire, the oil palm estates were either Zairianized in 1973-74 or nationalized in 1974-75. The abrupt implementation of these measures has further disrupted normal operations of the oil palm companies whose financial positions had already been weakened as a result of inadequate official price policies for oil sold locally and because of heavy taxes on exports. Since September 1976 most of the oil palm companies are again owned by their former foreign shareholders.

1.03 The proposed Oil Palm Project would support Government's overall strategy for the agricultural sector. It would provide assistance mainly for replanting of old or abandoned plantations, for renewing of their oil mills, transport fleets and equipment and it would finance feasibility studies and pilot smallholder programs. Three companies would benefit from the Project: Plantations Lever au Zaire (PLZ), which is owned by Unilever (British-Dutch) and Busira-Lomami (Busira) and Compagnie de Commerce et de Plantations (CCP), which are owned by Belgian parent companies.

1.04 The Project proposals for PLZ and Busira were formulated by the companies themselves, in consultation with the Government and an IBRD/FAO Cooperative Program mission which visited Zaire in May 1976. The proposals -2- for CCP vere prepared by the company followingan IDA pre-appraisalmission in October 1976. The CCP proposals were substantiallyreduced during the appraisal of the Project since they were found to be overambitious.

1.05 Since 1967 Zaire has received 13 IDA Credits totallingUS$192.5 million,and one IBRD Loan of US$100 million (Gecamines). Of the IDA Credits, three have been for the agriculturalsector. A 1973 Livestock Project had a slov start and experiencedmanagement and technical difficultiesand cost overruns because of inflation. Some adjustments in expenditures may be necessary in order to achieve the project'smain objectives by 1979. Priority vould be given to the purchase of more heifers and the provision of ranch infrastructure,transport facilities,and essential minerals and drugs. The tvo other Credits were recently extended for a Cotton Development Project (1976) and for a second Livestock Project (1977).

1.06 The Oil Palm Project was appraised in January 1977 by an IDA team in collaboration with representatives of the African Development Fund (ADF) and the Caisse Centrale de CooperationEconomique (CCCE) which are expected to co-finance the Project with IDA. The IDA team consisted of Messrs. H. van Voorthuizen,S. Gafsi and P.R. du Mee.

II. BACKGROUND

A. General

2.01 The Republic of Zaire covers 2.3 million square kilometers and is the third largest country in Africa. Its population in 1975 was about 25 million, and is growing at a rate of about 2.7% per annum. Most of the countryhas a vet tropical climate, but the plateau areas of the southeast and the mountainousareas along the eastern border have cooler and more temperate regimes. A vide variety of crops can be grown and the natural grasslandsand forests offer a vide range of developmentpossibilities, including livestock. The lakes and rivera are vell stockedwith fish and provide nearly 15,000 kilometers of navigable waterways and considerablehydroelectric potential. There are significantdeposits of copper, zinc, manganese and cobalt. In 1975 minerals accounted for about 80% of Zaire's export earnings and agricultural producte for about 15%.

2.02 Between 1970 and 1974 Zaire's GDP grew at an average annual rate of 5% per year, but in 1975 GDP fell by 4.6% due to a shortage of essential import goods, a sharp drop in copper prices and the disruptive effects of the Zairianization measures. All sectors of Zaire's economy have been adversely affected by uncontrolled Government spending and high inflation, causing the decline in economic growth and serious budgetary and balance of payments problems. A first stabilization program was adopted by Government in 1976 in consultationwith the IMF and a second program was adopted in April 1977. Per capita income in 1974-76 is estimated to be about US$140, for the country as a whole, but cash income is considerablyless in rural areas. - 3 -

B. Agricultural Sector

2.03 Only 1% of Zaire's total area is cultivated; 45% is covered by equatorial forests and the balance comprises savanna, mountains, lakes, rivers and marshes. About three quarters of Zaire's population derives its livelihood from agriculture and much of the remainder is indirectly dependent on it for employment. In 1975 agriculture's contribution to GDF was about 15%. About one half of agricultural production is marketed and the other half consumed directly by producer families. These proportions reflect the dual nature of the agricultural sector. On the one hand there are between three and four million traditional small family farms, whose combined production accounts for about 57% of total agricultural output. Those families grow food crops for subsistence, mainly cassava, maize, plantain and rice, and small amounts of cash crops, usually coffee or cotton. On the other hand, there are the commercial farm organizations, ranging from small and often poorly managed plantations, working at low levels of efficiency to large, corporation-operated plantations which include ranches extending over large land areas. The first commercial plantations date back to the beginning of the century and were designed primarily for industrial scale export crops, mainly oil palm, coffee and rubber, and to a lesser extent cacao and tea. The plantation sector re- mains of great importance for the Zairian economy, because it contributes to the country's foreign exchange earnings and provides substantial employment. Many adverse conditions in Zaire, starting with the political turmoil of the 1960s and followed by the nationalization policies, the lack of spare parts and other essential imports and the deterioration of transport facilities, compounded by unfavorable price policies and inadequate wages and social services for plantation workers, have discouraged the upkeep of existing plantations, the replanting of old plantations and the renewal of factory and other equipment. The result has been a pronounced decline in all export crops except coffee.

2.04 Agriculture has also suffered from the low level of public expenditures in the sector. From 1970-1974 agriculture's share of the recurrent budget fluctuated between 2% and 3% while its share of the public investment budget varied between 2% and 4%. Since 1976 Government has expressed its intention to give a higher priority to agricultural development. The main objectives of its new agricultural policy are to increase agricultural production in order to (i) satisfy national needs for basic food stuffs; (ii) provide raw materials for domestic agro-industries; (iii) increase exports; and (iv) increase farmer income and improve living standards of farm families. A number of policy changes and projects which would help meet these objectives are now being implemented or are under preparation. The Government prepared a 3 year plan (1978-1980) for the rehabilitation of the agricultural sector; the first meet- ing of the Agriculture Working Group which was created under the auspices of the Consultative Group for Zaire met in Kinshasa in mid March, 1978, chaired by the Bank, to discuss Government proposals and coordinate donor assistance.

C. The Oil Palm Sector (Annex 1)

Natural Palm Groves

2.05 Harvesting and processing of fruits of the wild oil palms (Elaeis Guineensis) has traditionally been practiced in three major.areas (Map 12834). Firstly Mayumbe, in the extreme western part of the country, which is well located from the marketing point of view. The average annual rainfall of 1,200 mm in the area, however, is too low for modern industrial plantations of high yielding varieties and the dry season of five to six months per year is too long. Secondly, Kikwit, in Bandundu Region, which has a slightly higher rainfall - 1,650 mm per year - but a pronounced dry season of three months and generally mediocre soils for oil palm. Some industrial plantations were started here during the initial period of the plantation industry, but the area is not regarded as promising for the future development of modern oil palm plantations. Thirdly, Equateur and the western part of Haut Zaire in northern Zaire, which have an average annual rainfall of 1,800-2,000 mm, without a marked dry season, and are therefore better suited for the cultivation of oil palm. Most of the industrial plantations are located in that part of the country.

2.06 Fruits from the natural trees are either processed in a traditional manner by the villagers themselves or sold to oil palm companies and processed in their mills. The production of village-processed oil bas probably only slightly decreased since 1970, if at all; for 1976 this production is estimated at above 45,000 ton. Most of this oil is consumed locally, but an unknown proportion is sold to local traders at prices which are believed to exceed substantially the official prices determined by the Government. Delivery of palm fruits to the oil palm companies, however, has sharply declined in Bandundu and Mayumbe. For the two areas combined, the production of the companies decreased by about 30% from 74,000 ton in 1970 to about 53,000 ton in 1976. Major reasons given for this are the low official prices paid for the fruits, an increasing reluctance by cutters to climb the trees and the bad state of maintenance of the roads. A 100% increase of the fruit prices from one makuta to two makuta per kg, announced in mid-1976, did not, however, increase delivery of fruits to the companies. This situation, combined with the unfavorable climatic conditions, effectively rules out the Mayumbe and Bandundu areas as potential contributors to an increase in Zaire's palm oil production.

Industrial Plantations

2.07 In the northern Equateur and Haut Zaire Regions almost the entire production of palm oil comes from industrial plantations. At most of these plantations, the collection of natural fruits has been discontinued, possibly because of inadequate incentives, by the local population. Some villagers still collect and process the fruits themselves, but the quantities involved are believed to be small. The production of the companies declined by about 20% from 85,000 ton in 1970 to 69,000 ton in 1976 (para 2.03). The reduction of investments in new plantations, particularly during the 1960's is reflected in both the total area under palms and in the skewed age distribution of the trees. At the end of 1976, the total area of oil palms was estimated at about 71,900 ha (this includes about 11,000 ha planted before 1960 in Bandundu but still in production) against 93,000 ha in 1973. The age distribution of the trees was, at the end of 1976, as follows: Age in Years More than 20 15-20 10-15 5-10 less than 5 Total

Area - in Ha. 22,800 20,500 6,500 8,900 13,200 71,900 - as Percentage of Total 32 29 9 12 18 100

More than 40% of the recent plantings were made on a new Government owned scheme (CAE) and the CELZA company but PLZ's annual plantings remained at less than half the level achieved during the 1950's.

2.08 The distribution of the oil palm plantation areas by company is as follows (end 1976):

Percentage Ha of total

PLZ 34,000 48 CCP 4,400 6 Busira 3,750 5 Sub-total 42,550 59 CELZA 20,900 29 Hevea Cequa 6,050 8 C A E 2,400 4 Total 71,900 100

PLZ (Annex 2) is the largest company and accounts for nearly half of Zaire's industrial palm oil production. The company has four oil palm plantations in Equateur and Haut Zaire and three in Bandundu. PLZ wishes to turn its southern plantations over to Government for growing alternative cash crops in Bandundu instead of oil palms. PLZ's other activities include 7,500 ha rubber and 3,800 ha cacao on two plantations in Equateur and a tea estate in Kivu. Busira (Annex 3) has one oil palm plantation (Bembelota) and a number of scattered small rubber and coffee plantations, all in the western part of Haut Zaire. The company is experiencing serious transport problems with its rubber production and does not plan any investments in that sector. CCP (Annex 4) has two oil palm plantations in Equateur and operates four small oil mills in the natural palm tree areas of Bandundu. The company has no other crops. The other major companies, which are not included in the Project, are Hevea Cequa, "Cultures et elevage au Zaire" (CELZA), "Commission agricole pour l'Equateur (CAE), and "Societe de cultures au Mayumbe" (SCAM) (see Annex 1, para 12). In the framework of Government's CAE scheme in Equateur an effort was undertaken recently to introduce oil palms on smallholder farms. So far this project has not made much progress because of lack of financial attractive- ness to the population of the localities concerned.

Development Priorities

2.09 In early 1976, because of the rapidly deteriorating situation of the existing oil palm plantations the Government formulated a "Plan d'Urgence". - 6 -

This plan provides for an accelerated renewal, over ten years, of some 80,000 ha of old or abandoned plantations and a modest extension of 20,000 ha, also on existing plantations. Where necessary, oil mills, roads, social infrastructure, means of transportand other equipmentwould be replaced, renewed or improved. The plan provides a realistic basis for investmentsin the immediate future, because full use would be made of the existing management capacity of companies and the remaining infrastructureon the plantations.

Marketing

2.10 Both internal and external marketing of oil palm products is entirely in the hands of the private sector, while the Government regulates internal market prices and determinesexport quotas. Total domestic consumptionof palm oil produced by the industrialcompanies increased from about 47,000 ton in 1970 to about 73,000 ton in 1975. Some 47,000 ton of the 1975 consumption were sold to the manufacturingindustry, mainly for making soap and margarine, while the other 25,000 ton were sold to licensed private traders. In addition, about one half of the 45,000 ton of village palm oil produced in 1975 is believed to have been sold to traders outside the producing areas. An unknown part of the oil marketed through traders is believed to have been sold illegally through informal channels to neighbouringcountries, while the balance was sold for household usage within Zaire. According to some estimates, illegal exports were about 25,000 ton in 1975. This practice, which deprives Zaire of export duties, is believed to have increased significantly in recent years because of the low official domestic prices for palm oil (para 2.13) which prevailed during the last 8 years.

2.11 Official exports of palm oil, palm kernel oil and palm kernel cake, are handled by the producing companies themselves,in most cases through European agents. Official exports of palm oil declined from 123,000 ton in 1970 to less than 40,000 ton in 1976. Palm kernel oil exports decreased from 50,000 ton in 1970 to 29,000 ton in 1975 and palm cake exports from 45,000 ton in 1972 to 31,000 ton in 1975. In the past Governmentdetermined fixed proportionsof palm oil for sale on the local market and for export, but since 1976 exports are authorizedonly on ad-hoc basis, depending on the needs of the domestic market.

Prices

2.12 Export prices for Zairian palm oil closely follow world market trends; they reached an average low of US$230 per ton in 1972 and an average high of US$640 per ton in 1974. In 1977 the price increasedfrom about US$470 per ton in January to about US$600 per ton in June. All oil is sold in the European Economic Community countries where it commands a 4% premium under the Lome convention. The current price of about US$600 per ton cif Europe is equivalentto about US$525 or Z 455 per ton fob Matadi. Kinshasa-Mataditransport and handling costs are about Z 20 per ton and export duties and other taxes about Z 90 per ton; the export price ex-Kinshasawas thus about Z 345 per ton in mid 1977. - 7 -

2.13 Since 1967 Government has fixed producer prices and wholesale and retail prices for palm oil sold on the domestic market. The official prices were consistently far below the world market prices, even when these were at the very low 1972 levels (Annex 1 para 21 and Table 13). This policy, designed to protect the consumer, was not effective because at the retail level the oil was unofficially sold at prices far exceeding the official price. At the producer level, however, and also at the wholesale level ex-Kinshasa, the low official prices were enforced, which seriously discouraged producers from making necessary new investments. In 1976 Government corrected the situation by increasing the wholesale price ex-Kinshasa from Z 190 per ton to Z 350 per ton. This price is now almost equal to the corresponding world market price ex-Kinshasa, net of export duties and other taxes.

D. Agricultural Services

Department of Agriculture

2.14 The Department is responsible for formulating agricultural policy, providing extension services and assisting the parastatal bodies under its control, including the National Institute for Agricultural Studies and Research (INERA). Its involvement with the industrial oil palm sector is restricted to policy making.

Oil Palm Research

2.15 The once important Yangambi research station, near Kisangani, came to a virtual standstill during the upheavals of the mid-1960s. Over the last ten years several attempts have been made to revitalize the station, including its oil palm research section. Chronic staff and other shortages have, however, seriously handicapped these efforts. The situation would have been disastrous for the oil palm industry, had not PLZ in 1969, in cooperation with the former Societe des cultures (now CELZA), established its own research station on CELZA's Binga plantation in Equateur. The station has five expatriate and three Zairian researchers and concentrates its research on agronomic trials and on the selection of high yielding and disease resistant material. About 350 ha have so far been planted at Binga and the station, together with PLZ's existing multiplication center at Yaligimba, now meets the foreseeable needs of the oil palm sector, particularly for seeds. The seeds have consistently been of good quality and an increasing proportion has proven resistance against wilt disease. For the implementation of the Project, present arrangements for the multiplication of high quality seeds are therefore adequate. Staff and facilities of the Binga center would, however, be expanded under the Project (Annex 5) to increase the station's capacity to train Zairian research staff (para 4.12) and to supply good seeds to the sector as a whole.

SOFIDE

2.16 The Societe Financiere de Development (SOFIDE) was established in early 1970 to support the development of enterprises in Zaire. The Bank -8- played an important role in SOFIDE's creation and has been its main source of funds through four lines of credit totallingUS$35 million. IFC and several local and internationalinstitutions participate in SOFIDE's share capital and/or have made loans to the company. One of the oil palm companies,CCP, received a SOFIDE loan of Z 350,000 in 1973 and a second loan of Z 150,000 in 1977. An Agriculture Department within SOFIDE started operations in May 1976 with the assistance of a three man FAO team. By the end of 1976 the Depart- ment had received more than 150 requests for loans of which 12, totalling about Z 2 million, were under active consideration. It is expected that SOFIDE's AgriculturalDepartment will play an increasinglyimportant role in assisting agriculturalenterprises (para 5.05).

III. THE PROJECT AREAS

Climate

3.01 The Project would be implementedby three companies: PLZ, Busira and CCP, on their estates in Zaire's northern Equateur and Haut Zaire Re- gions. Soils in the equatorial Zaire river basin area are generally well suited for the cultivationof tree crops and the climate is favorable for oil palm. Annual rainfall averages 1,800 to 2,000 mm in most of the area and is well spread over the year with a dry season of less than two months. Temperaturesaverage 24 to 25 C and fluctuatevery little; minimum tempera- tures are never lower than 190 C. The sun shines a high 2,000 hours per year on average in the region. Growing conditions do not differ much throughout the basin, although Busira's Bembelota plantation is more productive than others.

Communications

3.02 All the plantationswere establishedon the Zaire river or its navigable tributaries,since transport in the areas depends almost entirely on river transport (see Map 12834). All plantationsare served by river boats of the state-ownedNational Office of Transport (ONATRA). The quality of ONATRA's services varies considerably. On the Zaire river itself and on the lower parts of its principal tributariesONATRA's performancemeets reasonable standards,but in the upstream sections of the tributariesservices suffer often from poor management and staff indiscipline. Transport of supplies from Kinshasa to the plantations is often irregular and time con- suming and the companies frequently complain about pilferage. In the framework of a US$26 million IDA Credit (1975) the Bank discussed in 1976 the deterioratingsituation of ONATRA and agreed with Government on a rescue plan embodying measures to reduce costs, increase revenues and tighten controls. An agreementbetween Zaire and Belgium, in 1977, provided for the recruitment of expatriatemanagement and operationalstaff to improve the efficiency of ONATRA's operations. -9-

Population

3.03 The sub-regionsof the Equate r and Haut Zaire Regions are sparsely populated, with only 3-5 persons per km on average. The population density in specific areas has, in the past, always been an important factor for determiningthe location of new plantations. But for a variety of reasons (see para 4.14) the recruiting of workers has become increasinglydifficult in recent years.

IV. THE PROJECT

A. General Description

4.01 The Project would, over five years (1978-1982),support the rehabilitation of existing oil palm plantations through investmentsfor replanting and new plantings, the renewal of oil mill and transport equipment, the improvementand expansion of social infrastructure,the employment of additional staff and training of staff. The Project would specifically include:

(i) planting of 12,215 ha, of which 9,585 ha would be replanting and 2,630 ha new plantings;

(ii) complete renewal of the equipment of one oil mill and partial renewal of two mills (PLZ only);

(iii) procurementof land clearing equipment (PLZ only), trucks, tractors and staff vehicles;

(iv) constructionor repair of workers' and staff houses, schools, health clinics and stores;

(v) procurementof fertilizersfor existing young, but not yet productive,plantations (Busira and CCP);

(vi) employment of additional internationallyand locally recruited staff;

(vii) logistics support for a mechanics' school and one year training courses for plantation staff (PLZ only);

(viii) feasibilitystudies and pilot programs for smallholder and plantation employees' cultivationschemes; and

(ix) technical assistance for the Department of Agriculture. - 10 -

Parts (i)-(viii) of the Project would be implemented by the companies (PLZ, Busira, and CCP) under the supervision of a Government coordinating committee, assisted by SOFIDE (para 5.05). The Department of Agriculture would have overall responsibility for the Project and will itself execute part (ix).

B. Detailed Features

New Plantings

4.02 The planting program of the three companies for the five year period 1978-82 is as follows (ha):

PLZ Busira CPP Total

Replanting 9,320 - 265 9,585 New Planting 580 900 14150 2,630

Total 9,900 900 1,415 12,215

PLZ would plant 4,770 ha at its Lokutu plantation, 4,200 ha at Yaligimba and 930 ha at Boteka. Except for 580 ha new plantings in virgin soils at Boteka, all plantings would be made on presently abandoned or old plantations. Busira's 900 ha and CCP's 1,150 ha new plantings would be made in virgin forest soils. Seeds for all new plantings would be procured from the Binga research station and the Yaligimba multiplication center (para. 2.15). In view of the importance of the regular supply of good seeds for the Project progress of the operations as well as the annual work programs and budgets of the joint PLZ-CELZA research and multiplication scheme would be reviewed by the Project coordinating committee (para 5.04). If one of the parties were to withdraw its support for the center, Government would, in consultation with IDA, take appropriate measures to assure the uninterrupted supply of good quality seeds to meet the demand of the oil palm sector (see also para 4.12). The Project would also provide for the purchase of incremental fertilizers, insecticides, fungicides, herbicides, tools and other necessary inputs for the planting program.

Oil Mills

4.03 Two existing oil mills at PLZ's Lokutu plantation would be over- hauled under the Project and a new steam boiler would be provided for PLZ's Yaligimba mill. No investments in oil mills are needed in the foreseeable future at PLZ's Boteka plantation or at any of the plantations of the two small companies. At the Lokutu plantation PLZ presently operates three old mills with a combined capacity of 80,000 ton fresh fruit bunches (ffb) per year. In the long run PLZ would concentrate oil production at the Lokutu and Lukumete mills because of their convenient location on the Zaire river. The third mill, Mosite, is located about 30 km inland and would be phased out after completion of a first phase renewal of equipment at the two other mills - il -

(about 1982). The annual production of the Lokutu plantation is estimated to increase from about 75,000 ton ffb in 1976 to about 90,000 ton ffb in 1982 and about 160,000 ton ffb in 1990. The combined annual capacity of the Lukumete and Lokutu mills would be about 120,000 ton ffb after completion of the first phase works in 1982. Through further investments the capacity of the Lokutu mill would be doubled by 1988 and that of Lukumete by 1990.

Machinery and Vehicles

4.04 The mechanization of land clearing for plantations, construction sites and roads is necessary for the timely completion of the works at PLZ's two largest plantations, Lokutu and Yaligimba. The Project would therefore provide the necessary bulldozers, graders and front loaders. Elsewhere, the smaller planting programs would use labor for land clearing but the Project would provide one small grader to facilitate road construction and maintenance at the CCP plantations. For all three companies the Project would provide trucks, tractors and trailers to transport fruits, seedlings and inputs, and vehicles and motorcycles for the plantation staff.

Construction

4.05 The Project would provide 1,400 new houses for plantation laborers and 25 social facilities, including 7 schools, 8 dispensaries and 7 supply stores, for the new plantations and in some cases also for existing productive plantations. In a few localities, e.g. PLZ's Yaligimba plantation and the CCP plantations, the Project would also rehabilitate 1700 existing workers houses which were abandoned in the 1960's. The Project would also provide for the construction of 60 staff houses, storage sheds and offices where needed. An assurance would be given by the companies that they would adequately staff and operate their social services, on both existing and new plantations.

Fertilizers for Existing Young Plantations

4.06 Existing plantations have in recent years suffered because of poor maintenance and lack of fertilizers, insecticides and herbicides. In particular the immature plantations of the small companies are in a poor condition and normal development has often been hampered. The Project would therefore provide fertilizers for the young plantations of the small companies until those plantations come into production. PLZ's young plantations are generally in better condition than those of the small companies. Therefore, and also because PLZ is in a stronger financial position, no financing under the Project is envisaged in its case.

Staff

4.07 The Project would provide funds for some additional local and internationally recruited staff to complement existing staff during the implementation of the planting program. This staff would be incremental and for the duration of the Project. An assurance was given by the companies at negotiations that they would retain the present numbers of qualified staff, - 12 -

in addition to the staff to be provided for under the Project 1/, and that they would train Zairian staff in accordance with the agreed program (para 4.09). Government has given an assurance that it would permit the internationally recruited staff to remit an adequate proportion of their salaries to their respective home countries.

Training (Annex 10)

4.08 As a result of deliberate training efforts and in part arising from the Zairianization, the companies have substantially reduced their expatriate staff in recent years and now employ only one half of those employed in 1973. Some success has been achieved in training plantation and accounting staff. Efforts to train and retain local engineers and skilled artisans have been less successful, while generally broader experience is lacking among senior Zairian management staff.

4.09 The Project would extend past efforts, in part to improve the performance of Zairians recently promoted and in part to develop an increasing cadre of skilled personnel which can progressively take over the remaining senior management and technical positions. To this end tileProject would provide for three training programs over a 5 year period. The first would provide formalized one-year practical training courses for about 40 plantation sector and division chiefs. Housing and transport means would be provided. Secondly the Project would expand an existing secondary school near PLZ's Lokutu plantation for a two year course in mechanics for about 60 students through the provision of a dormitory, a classroom, a teacher and equipment. In both of the above cases, PLZ would be responsible for executing the programs and graduates would be available to all the companies. Thirdly the Project would provide study trips for about 60 senior management staff, accounting and technical staff to other palm oil producing countries. Candi- dates would be selected by Government in consultation with the companies and could include some of Government's own staff; the program of these studies would be agreed upon beforehand with IDA.

Technical Assistance

4.10 In order to strengthen the Department of Agriculture's capacity to respond more effectively to the demands of the oil palm sector (formulation of policies, preparation and supervision of projects) the Project would provide funds (US$500,000) which would be used for (i) recruitment of an expert; and/or (ii) ad-hoc consultancies; and (iii) training of Government staff, either by the expert mentioned under (i) and/or through study trips abroad (para 4.09). The submission of detailed plans, acceptable to the Association would be a condition of disbursement under this component.

1/ A total of 7 technical experts would be recruited internationally: 3 agronomists, 2 diesel specialists, 1 building specialist and 1 training specialist. - 13 -

4.11 The Project would also provide funds (US$200,000) for the Depart- ment of Agriculture to pay SOFIDE's costs in respect of the first 2 years of the project (see para 5.05).

4.12 The Project would provide for two additional expr.-riateoil palm researchers and for housing, transport, scientific instruments and other facilities (including salaries) at the Binga station to train eight Zairian researchers over the five year period of the Project. A condition of disbursements against this component is an agreement signed by the Government, PLZ and CELZA (joint owners of the Binga research station) which would specifically cover the integration of the Government's oil palm research program with those of PLZ and CELZA, at Binga as well as detailed arrangements regarding the selection of and the training program for the eight Zairian researchers.

Labor Needs and Rural Development

4.13 Arising out of the Project, two particular matters call for special collaboration between the Government and the companies. First, is the companies' need to retain existing and recruit additional plantation labor to carry through their development programs; the second is the opportunity which the companies' presence in Zaire provides to help promote a smallholder development effort either within or adjacent to the plantation areas. These matters are interrelated.

4.14 For some time the companies have experienced difficulties in recruiting and retaining sufficient labor. There have been many reasons for this: the erosion in real terms of labor wages, in part due to the severe domestic inflation; the companies' decreased ability to pay more when domestic oil palm prices were low; the deterioration of labor amenities and social services partly as a result of the companies' uncertain ownership status. Moreover, low population density in certain areas has compelled some of the companies to recruit labor from up to 200 km distant. The labor force was approximately halved from 1960 to 1970, but the fall off has been less significant in the past six years. For example PLZ employed only 23,000 workers in 1970 compared with over 40,000 in 1960. The current work force numbers about 22,000. PLZ would need to recruit an additional 2,500 workers during the Project period (about 10-15% of the present number). The small companies combined would need to recruit about 1,000 additional workers over the next five years, or about 15 - 20% of their present number.

4.15 It is expected that a series of measures would improve the labor supply situation. The restoration or provision of adequate housing and social services should provide a significant inducement in Zaire's rural areas where such services are generally lacking, but it is widely acknowledged that a substantial increase in labor wage rates is justified and necessary. The companies are anxious and in a position to increase wages and are primarily concerned that this be consistent with Government's - 14 - policies. This is now under discussion between the Government and the companies. During negotiationsit was agreed that in the future the Project coordinatingcommittee (para 5.04) would annually review the adequacy of the wages to attract sufficient labor and recommend changes when necessary; the companieswould implementsuch changes as are deemed necessary to maintain this labor force at the required level provided that Government has satisfied itself that the recommendedchanges are in accordancewith its overall wage policies; in the event that the committee fails to agree on the recommendations or that its recommendationsare found to be not in accordance with Government'soverall wage policies, the Government would consult with the Association. The Government would also agree to facilitate, through its local administration,the companies'efforts to recruit sufficient numbers of workers.

4.16 Another measure which could help attract and retain labor would be a program to develop food crops and small livestock, etc. on labor family small holdings either within or adjacent to the plantations.Such schemes would n.eedto be planned with care to ensure that they would reinforce the availabilityof labor to the plantations in addition to increasingagricultural production and raising living standards. The companies' support would be provided in a manner which supplementsrather than dilutes the considerable efforts required in the early years to carry through the plantation development program.

4.17 In a closely related respect, the companies are well placed to offer Zaire considerableassistance in drawing up a program of smallholder crops, using their experience in Zaire and elsewhere. The companieswould be called upon to provide assistance to the Government by identifyingand preparing smallholdersschemes for oil palms and other crops, including the operation of pilot projects where appropriate. The full scale developmentof such schemes would depend on the outcome of feasibilitystudies and pilot programs, the results of which cannot be predicted at this stage, and would be the subject of separate financingat a later stage.

4.18 The Project thus provides US$2.5 million for feasibilitystudies and pilot schemes for the two activities detailed above, notionallyUS$0.5 million for studies (five man-years of consultancyservices) and US$2.0 million for field trials and pilot schemes. Such funds would be made available to Government and, as may be agreed, would in fact reimburse the cost of services provided by the companies. The submissionof detailed proposals, acceptable to IDA, is a condition of disbursementsagainst expendituresunder this component.

Operation and Maintenanceof Existing Oil Palm Plantations

4.19 The shortage of foreign exchange in recent years has seriously hampered the procurementof essential supplies (fertilizers,vehicles, spare parts, consumer goods for the workers, etc.) for the normal operationand maintenanceof existing plantationsand oil mills. Government has therefore given an assurance that, during the investmentperiod, all participating - 15 - companieswould be permitted to retain an adequate proportion of their foreign exchange receipts ta cover the foreign exchange needs for the efficient operation of their existing oil palm plantationsand installations, including company supply stores and other social services. The annual amounts reeded by each company are estimated as follows (1977 constant prices): PLZ US$3.0 million; Busira and CCP US$0.6 million each. Of these amounts about 30% would be for the purchase of fertilizers and chemicals, 25% for oil mill equipment and transport needs, 32% for expatriate staff and 13% for the operation of the social services.

EnviromentalEffects

4.20 The Project would not affect the environment to any significant extent, as the rehabilitationand upgrading of PLZ's oil mills at Lokutu and Yaligimba will still leave PLZ oil output below the 1960 level. The mills are equipped with oil traps, which recover most of the solids for recyling. Moreover, the Zaire river, at the point where untrapped effluents are dis- charged is broad and fast flowing, so that the comparativelytiny amount of effluent from the oil mills hardly affects oxygenisation.

C. Cost Estimates (Annex 6)

4.21 Total Project cost, including contingencies,is estimated at Z 41.1 million (US$47.4 million), and the foreign exchange component is estimated at 48%. Detailed cost estimates are as follows: - 16 -

Local Foreign Total Local .iOign Total Foreign -'O------…US$000------Exchange %

By !Leïû Plantations 4,058 2,595 6,653 4,679 2,992 7,671 39 Oil Mills 1,033 5,777 6,810 1,191 6,661 7,852 85 Machinery and Vehicles 227 1,661 1,888 262 1,915 2,177 88 Constructions 2,874 1,547 4,421 3,314 1,783 5,097 35 Fertilizer Existing Plantations 51 205 256 59 236 295 80 Staff 1,641 704 2,345 1,892 812 2,704 30 Operating Cost Staff Vehicles 66 65 131 76 75 151 50 Training 387 298 685 446 344 790 44 Base Cost 10,337 12,852 23,189 11,919 14,818 26,737 55 Physical Contingencies 10% 1,034 1,285 2,319 1,192 1,482 2,674 55 Price Contingencies 8,152 2,517 10,669 9,399 2,902 12,301 23 Technical Assistance 694 2,081 2,775 800 2,400 3,200 75 Smallholders Studies & Pilot Schemes 1,084 1,084 2,168 1,250 1,250 2,500 50 Project Cost 21,301 19,819 41,120 24,560 22,852 47,412 48

By Company including contingencies PLZ 15,620 14,900 30,520 18,010 17,179 35,189 49 Busira 1,333 606 1,939 1,537 699 2,236 31 CCP 2,570 1,148 3,718 2,963 1,324 4,287 31 Subtotal, Companies 19,523 16,654 36,177 22,510 19,202 41,712 46 Technical Assistance, Smallholders Studies and Pilot Schemes 1,778 3,165 4,943 2,050 3,650 5,700 64 Project Cost 21,301 19,819 41,120 24,560 22,852 47,412 48

4.22 Costs have been estimated at mid 1977 prices and include capital costs only. A physical contingency of 10% has been allowed on all Project costs except for the technical assistance and smallholders' components. Price contingencies have been calculated at the following rates (percentages):

1978 1979 1980-82

Foreign Exchange Expenditures, 7.5 7.5 7.0

Local Expenditures 30.0 15.0 10.0

The high contingencies for local expenditures in 1978 and 1979 are necessary to allow for the inflation rate in Zaire which is higher than elsewhere in the world. The cost estimates are net of import duties on imported equipment and vehicles. An assurance was given by Government that Zaire's Investment Code, which provides for the exemption of import duties on new investments, would be fully applied to all investments made under - 17 -

the Project. Other taxes and duties, e.g. taxes on salaries of expatriate personnel, import duties and sales taxes on fuels and spare parts, etc. are included in the Project cost. The amount of other taxes and duties is estimated at Z 1.5 million (US$1.7 million), excluding contingencies.

D. Financing

4.23 The financing of the Project's cost would be shared in the follo'ing amounts and proportions.

z US$ % of (million) (million) Total Cost

External Sources

IDA 7.8 9.0 19 ADF 5.3 6.1 13 BADEA 3.8 4.4 9 CCCE 3.6 4.2 9 Government 2.4 2.7 6

Sub-total 22.9 26.4 56

Internal Sources

PLZ 16.0 18.5 39 Busira 0.7 0.8 2 CCP 1.5 1.7 3

Sub-total 18.2 21.0 44

Total 41.1 47.4 100

The Government is expected to receive about US$1.7 million of taxes and duties on Project investments (para 4.22) and to contribute US$2.7 million towards the Project's financing, US$0.7 million of which would come from a US commodity import loan of US$16.6 million.

4.24 External and domestic financing for the parts of the Project to be implemented by each company would be as follows:

External Funds Internal Funds % US$ Million % US$ million

PLZ 47 16.7 53 18.5 Busira 66 1.4 34 0.8 CCP 60 2.6 40 1.7 - 18 -

Details on the financial projections of the companies are given in Annex 7, Tables 1-3. All companies would make additional, non-project, investments for routine replacements for oil palms and other crops.

4.25 The IDA Credit and the loans to be made by the co-financing agen- cies would finance the Project's foreign exchange expenditures (48% of Proj- ect costs) and about 14% of local costs. The IDA Credit would be made to the Governnent on standard terms and the funds, except for the technical assistance and smallholder components, would be on-lent by Government to the companies. A repayment period of 15 years, including a grace period of five years, and an interest rate of 10% are recommended for IDA funds to be on- lent by Government. The on-lending terms for CCCE and ADF funds would be the same as for IDA funds. CCCE would channel its funds through SOFIDE at an interest rate of 7%, which would leave SOFIDE with a margin of 3%. ADF would lend to Government at terms identical to IDA's standard terms and BADEA would also lend on similar terms. The oil palm companies would take the foreign exchange risk on direct foreign exchange expenditures (off-shore costs) to be financed with IDA, CCCE, BADEA and ADF funds while Government would take this risk on local currency expenditures. ADF funds would be used to finance on a parallel basis PLZ's expenditures for fertilizers and chemicals, equipment, vehicles, buildings and training. IDA and CCCE would jointly, on a 65/35 basis, finance PLZ's expenditures for oil mills and for expatriate staff and all eligible expenditures of Busira, and CCP. BADEA would also finance a portion of PLZ's oil mills. Part of a US commodity loan would finance earthmoving equipment for PLZ. Its terms to Government are 50 years at 3%, with the first 10 years at 2%.

E. Procurement

4.26 For the parts of the Project to be financed jointly by IDA and CCCE or by IDA alone the following procurement arrangements would apply:

(a) Vehicles, trucks, tractors, tools, fertilizers, and pesticides, valued at about US$1.2 million, in orders exceeding US$50,000 would be procured through international competitive bidding (ICB) in accordance with Bank guidelines; orders would be bulked whenever possible. Local procurement procedures, acceptable to the Association, would be followed for orders under US$50,000 (Busira, CCP);

(b) The oil mill equipment, valued at about US$5.7 million, would be procured through ICB;

(c) Construction of houses and social buildings, valued at US$1.6 million (Busira, CCP), would be undertaken on force account by the oil palm companies themselves; and - 19 -

(d) Expatriate staff (35 man-years), with a foreign exchange cost of US$1.1 million (PLZ, CCP), would be recruited directly by the companies themselves.

The remaining items to be financed by IDA and CCCE would be for plantation costs. None of these items would be suitable for any form of competitive bidding and would therefore be procured by the companies themselves. Tech- nical assistance, research training and the smallholders studies and pilot programs, valued at US$2.2 million, are not expected to involve any procurement suitable for ICB; all goods and services for these components would therefore be procured by Government in accordance with its normal procedures, satisfactory to the Association.

F. Disbursement

4.27 IDA and CCCE would disburse pari-passu in the ratio 65/35 against Project expenditures to be incurred by the oil palm companies. IDA's part would be as under:

(a) PLZ: (i) 65% of foreign cost of oil mill equipment, including civil works and engineering cost (US$3.5 million);

(ii) 65% of the foreign exchange cost of expert staff (US$0.6 million);

(b) Busira and CCP:

(i) 65% of foreign cost of fertilizers, chemicals, and transport equipment (US$0.3 million);

(ii) 65% of the foreign exchange cost of expert staff (US$0.1 million);

(iii) Z 390 (US$450) for each ha planted under the Project (US$1.0 million);

(iv) Z 1,300 (US$1,500) for each new worker or staff house, school, clinic, store, workshop and office to be built under the Project (US$0.5 million); and

(v) Z 650 (US$750) for each worker's house rehabilitated under the Project (US$0.5 million).

In addition, IDA would disburse 60% of total costs against expenditures to be incurred under research training (US$900,000), 50% of the SOFIDE fees - 20 -

(US$100,000) and 40% of the smallholder studies and pilot program (US$1.0 million). Project costs and the number of buildings to be constructed or rehabilitated by the small companies are detailed in Annex 6; the areas to be planted by the companies are given in paragraph 4.02. Disbursement against foreign exchange expenditures would be fully documented. Disburse- ment against plantings and constructions would be made on presentation of evidence, certified by SOFIDE, that the particular stage of the works are completed. Reimbursement claims would be countersigned by SOFIDE. Any funds remaining in the Credit account at the end of the Project would be reallocated at the discretion of the Association. The estimated schedule of disbursement of the IDA credit is at Annex 11.

G. Accounts and Audits

4.28 The companies will keep separate accounts, reflecting the cost of their parts of the Project; Government would keep separate accounts for the technical assistance and smallholder cultivation components. These accounts, as well as the full accounts of the companies, would be audited by independent auditors acceptable to the Association and would be submitted to IDA within six months of the end of each fiscal year.

V. ORGANIZATIONAND MANAGEMENT

The Companies

5.01 All three companies have head offices in Kinshasa and local management units on the plantations. PLZ's central administration at Kinshasa is well structured and includes a number of specialized departments such as plantations, finance and accounting, personnel, technical and marketing. The Kinshasa offices of the two other companies have simpler organizational structures and have fewer staff in accordance with their size. Busira's central administration, including its accounts, were merged with those of Heavea Cequa between 1974 and 1976, when both companies were part of "Entreprises industrielles, agricoles et commerciales" (ENTRIAC). After the 1976 retrocession measures the administrations of the two companies were, once again, separated.

5.02 Management units vary by plantation depending mainly on size. Typical large plantations, like PLZ's Yaligimba and Lokutu, have a director responsible for five departments - technical, plantations, accounting, personnel, and medical - each headed by a specialist department head. An agronomist heads the plantation department, assisted by sector chiefs (for each 4,000- 6,000 ha), division chiefs (1,500-2,000 ha), section chiefs (400-800 ha) and block chiefs (100-200 ha). On smaller plantations, such as PLZ's Boteka and the plantations of the other companies, management units are smaller and the - 21 - auwber of separate departments may be fewer. CCP has one local management unit at Lisafa for two oil palm plantations on the Maringa river.

5.03 Although all the companies have in recent years reduced their expatriate staff (by 50% or more since 1973) and have had difficulties in filling the vacancies with qualified Zairian staff, the ei:sting management is still adequate, particularly that of PLZ. The wide experience and high degree of technical competence and dedication among the higher level staff of the companies, whether expatriates or Zairian nationals, is one of the strongest assets of the companies and, because of this, there should be few major organizational and management problems. The companies have given assurances that they would carry out the planting program set out in the Project.

Coordination and Supervision

5.04 A committee of Government and company representatives has been created to discuss and coordinate Project-related matters. This coordinating committee, which is to meet at least four times per year, will be chaired by the Director-General of Agriculture and will have as its permanent members senior representatives of the Departments of Finance, Portfolio, Planning, Central Bank, Office of Public Debt Management, Rural Development, Transport, and National Economy, the managing directors of the three companies, and SOFIDE (paragraph 5.05). Government officials responsible for labor relations, health and other social affairs and local administration would be invited to the committee's meetings on an ad-hoc basis as required. The Chairman will appoint an official of the Department of Agriculture to act as the committee's secretary and to maintain relations with the companies on a day-to-day basis. The committee's tasks would specifically include reviews of (i) the Project's progress and problems; (ii) annual work programs and investment budgets of the companies and Binga research station; and (iii) the adequacy of wages to attract sufficient labor and of palm oil prices on the domestic market, making recommendations on changes when necessary.

5.05 SOFIDE would be responsible for the administration of part of the external lending to the companies, namely: as the intermediary for the CCCE loan and as an agent of the Government for the IDA credit in respect of the two small companies. As explained in para 2.16, SOFIDE has become increasingly involved in the financing of Zaire's agricultural development, particularly since its Agricultural Department was established in 1976. SOFIDE's tasks would include the following:

(a) inspection of the physical execution of the Project through field visits of the companies' plantations, at least twice a year;

(b) verification of all tender documents, disbursement claims and the annual costs of Project components implemented by the companies;

(d) participation in meetings of the coordinating committee (para 5.04).

SOFIDE would report to the Director General of the Department of Agriculture in his capacity of chairman of the coordinating committee. SOFIDE would designate a senior member of its staff to maintain day-to-day contacts with the companies. As an intermediary of CCCE funds SOFIDE would be entitled to a margin to cover its expenditures and risks. For its services in administering the on-lent funds SOFIDE would receive an annual fee from Government to cover its costs plus a small margin. IDA.and CCCE are each providing US$100,000 to the Department of Agriculture to cover SOFIDE's fees in this respect until the interest differential on the CCCE loan is adequate to cover its costs. An agreement between Government and SOFIDE, acceptable to IDA, with regard to the administration of the on-lent IDA funds, will be signed before the IDA Credit becomes effective. A draft of this document was agreed upon at negotiations.

Evaluation and Monitoring

5.06 The Ministry of Agriculture would be responsible for monitoring and evaluating the Project's progress during its implementation in accordance with agreed standards and would write a completion report at the end of the Project.

VI. PRODUCTION, MARKETS AND PRICES, AND CASH FLOWS

Yields and Production (Annex 1)

6.01 The new plantations are expected to start producing in the fourth year after planting and remain in production for about 25 years. The yields in fresh fruit bunches (ffb) per ha of PLZ's and Busira's plantations are expected to increase from 7 ton in year 4 to 15 ton in year 9. From year 13 onwards yields are expected to decline slightly; for the final 5 years the yields are estimated at 12 ton per ha. For CCP's plantations, which have a somewhat lower yield potential, peak yields of 13 ton per ha are expected. The ail extraction rate is estimated at 20% of ffb and the weight of the kernels at 5% of ffb. These estimates in line with those experienced with equivalent planting material under similar conditions in West Africa.

6.02 At full maturity in 1995 the plantings made under the Project would produce annually about 33,000 ton palm oil and 8,000 ton kernels. In that year the Project's output is expected to represent about 18% of Zaire's total palm oil production (186,000 ton).

Markets and Prices

6.03 The Project is expected to produce palm oil primarily for the domestic market. International prices of palm oil in constant 1977 terms are - 23 - expected to decrease to about US$405 per ton, cif Europe, in 1978 and thereafter to increase slightly to US$425 per ton by 1985. Prices for palm oil to be sold on the domestic market would continue to be regulated by the Govern- ment. In the first half of 1977 the price of oil sold on the domestic market (Z 350 p_r ton, ex-Kinshasa)corresponded closely to the equivalentworld market price, net of export duties and other taxes. This price provided an adequate incentivefor the companies to continue production. In the future the price would be reviewed from time to time and, when necessary, changed in consultationwith IDA to reflect changes in major cost elements and changes in the world market price of palm oil.

6.04 Palm kernels would continue to be sold locally and crushed in existing palm kernel mills; all kernel oil and kernel cake would be exported as at present.

Companies' Cash Flows (Annex 7)

6.05 Tables 1-3 of Annex 7 show the companies' margins, expenditure,net income and cash flow projections for the years 1977-1987. The tables also show the amounts available for distributionto shareholders. PLZ, Busira and CCP would be able to service their debts in full and pay increasing dividends from 1983.

Government Cash Flow (Annex 9)

6.06 Government'snet cash flow resulting from the Project over the 50 years of the IDA Credit would be positive until the year 2002 and reach a maximum of about US$4.1 million in 1987. From the year 2003 onwards the net cash flow would be negative since the Project investmentswould have ended their productive life cycle and Government would continue to make repayments to IDA, ADB and USAID until the year 2027. The cumulative net cash flow over the entire period would be about US$40 million.

VII. BENEFITS AND JUSTIFICATION (Annex 8)

7.01 The direct benefits from the Project would be the incremental production of about 33,000 ton of palm oil and about 8,000 ton of palm kernels per year, with a value of about US$18 million (1977 prices), at full maturity in 1995. Project induced palm oil productionwould substitute for imports which would otherwisebe required by the time the Project reaches full production.

7.02 The calculationsof the financialand economic internal rates of return are detailed in Annex 8. Import parity prices for palm oil were used in the economic analysis. The official price of oil, ex-Kinshasa, which is adequate at present (para 6.03), has been used in the financial analysis. The rate of inflation in Zaire is expected to be higher than worldwide inflation,particularly in 1977/78 (para 4.22). Therefore local - 24 - cost elements have been adjusted upwards in the financial atid economic evaluation as the different rates of inflation will result in additional real local costs. A similar adjustment has been made in the financial analysis for palm oil sales on the domestic market.

7.03 The internal financial rate of return (IFR) for PLZ's part of the Project is estimated at 18%, for Busira's part at 21%, and for CCP's part at 16%.

7.04 The internal economic rate of return (IER) for the whole Project is estimated at 16%. For the individual companies' parts of the Project the IER varies between 18% for Busira and 14% for CCP. Foreign exchange has been shadow-priced at 127% of the official exchange rate to reflect its economic value.

7.05 The main risk facing the Project is a shortage of plantation workers. If such a shortage occurred the planting program would be slowed down and normal maintenance of existing plantations could be impaired as has happened in recent years. The improvement of social services on the plantations and payment of adequate wages to the laborers are essential to reduce this risk (para 4.15). The companies should meet these conditions provided that the price of oil sold is adequate; a regular review and, if necessary, adjustment of this price is necessary (para 6.03).

7.06 Another risk is the uncertain river transport situation. The Project would be seriously affected if ONATRA's services were to deteriorate further because the companies depend entirely on river transport for the delivery of essential supplies and for the shipment of their products. More- over, the recent measures to strengthen ONATRA's management and operational staff are expected to reduce the transport risk for the Project (para 3.02).

7.07 Delays in the companies' planting programs because of labor shortages would probably affect the relationship between direct Project costs and direct Project benefits since total costs and revenues would not be delayed by equal time periods. But the production costs, including the companies' fixed overhead costs, per ton of palm oil would almost certainly increase (and the net benefits decrease) in such a situation. Similarly, the companies' costs would increase if ONATRA's river transport services were to deteriorate since this could result in late deliveries of essential supplies or the need to rely on bank overdrafts or other forms of short-term financing if products cannot be shipped on time. If for one of these (or any other) reasons the costs were to increase by 10% both the IFR and the IER of the Project investments would decrease by about two percentage points. If simultaneously the Project's benefits would decrease by 10% the IFR and IER would decrease by a further two percentage points.

7.08 The Project would revitalize Zaire's oil palm sector. Through the Project, some 3,000 plantation workers and about 20 local staff would be offered permanent employment. Besides net earning (about US$200 per year for a full-time laborer) all employees would also benefit from improved housing and social services to be provided under the Project. - 25 -

7.09 The net income of the companies is estimated to be about 20% of gross revenues from the sales of palm oil and kernels. Of this 52% would be paid to the Government as company taxes; the maximum taxes on income from Project investmentswould be about US$1.3 million per year from 1987-97. The remaining 48% (US$1.2million per year from 1987-97) wou'ldrepresent the companies' net profits which would partly be retained in the companies and partly distributedto the shareholders.

VIII. AGREEMENTS REACHED AND RECOMMENDATIONS

8.01 During negotiations,agreement was reached with the Zairian Govern- ment's representativeson the following matters:

(a) progress of the operations as well as the annual work programs and budgets of the joint PLZ-CELZA research and seed multiplicationscheme would be reviewed by the Project coordinatingcommittee (see (h) below); if one of the parties were to withdraw its support for the center, Government would take appropriatemeasures to assure the uninterruptedsupply of good quality seeds to meet the demand of the palm oil sector (para 4.02);

(b) the Government agreed that the companies, if they so require, retain the present qualified staff; as replacementsare required for these the companieswould have the right to hire qualified replacementsthrough a process of international search (see Annexes 2-5) during the investment period and five years thereafter- in addition to the staff to be provided for under the Project -; the Government would permit the internationallyrecruited additional staff to remit to their respectivehome countries the proportion generally allowed at December 1, 1977 (50%) in addition to any overall ceiling per company (para 4.07);

(c) the Project coordinatingcommittee would annually review the adequacy of the wages for plantation workers and recommend changes when necessary; the companieswould implement such changes as are deemed necessary to maintain their labor force at the required level provided that Government has satisfied itself that the recommended changes are in accordancewith its overall wage policies; in the event that the committee fails to agree on the recommendationsor that its recommendationsare not in accordancewith Government'soverall wage policies, the Governmentwould consult with IDA (para 4.15);

(d) the Government,through its local administratorsin the areas where the Project plantations are located, would facilitate the companies' efforts to recruit sufficient numbers of plantation workers (para 4.15); - 26 -

(e) all participatingcompanies would be permitted to buy sufficient foreign exchange to cover the foreign exchange needs for the efficient operation of their existing oil palm plantations and installations(including company supply stores and other social services);estimates of the amounts of foreign exchange required by each company are specified in paragraph4.19 and those amounts would be adjusted annually to take account of changes in the foreign exchange cost elements, including inflation;

(f) Zaire's InvestmentCode would be applied in respect of all investmentsto be made under the Project (para 4.23); the code is being reviewed,but as a minimum imported goods for the Project will be exonerated from import duties.

(g) the Government would bear the foreign exchange risk on all project expendituresin local currency to be financed by IDA and the oil palm companieswould bear this risk on the direct foreign exchange expenditures (off-shorecosts; (para 4.25);

(h) a committee of Government and company representativeswould be created before May 15, 1978, and would meet at least four times per year to discuss and coordinate Project related matters; the Director General of the Department of Agriculture would act as the committee'schairman and Government would appoint an official of the Department to act as the committee's secretaryand to maintain relationswith the companies on a day-to-day basis (para 5.04);

(i) the Government would appoint SOFIDE as its agent to administer the loans Governmentwould make to the companies with IDA funds; SOFIDE would designate a senior member of its staff to maintain contacts with the companies (para 5.05); and

(j) internal prices of palm oil would be reviewed from time to time and, when necessary, changed in consultationwith IDA to reflect major cost elements and changes in world market prices (para 6.03).

8.02 It was also agreed that the companieswould give the following assurances,to be incorporatedin subsidiary loan agreementswhose signature is a condition of effectiveness(para 8.04 (a)):

(a) the companies would carry out the planting programs set out in the Project (para 5.03);

(b) the companieswould adequately staff and operate their social services in a manner satisfactoryto IDA, including basic health and primary education facilitiesand - 27 -

supply stores, on both existing and new plantations to help attract and retain sufficient numbers of plantation workers (para 4.05);

(c) the companies would maintain the present number of qualified staff (Annexes 2-5), in addition to the staff to be provided for under the Project, and would train Zairian staff (para 4.07);

(d) the companies would assist the Government in identifying and preparing smallholder schemes for oil palms and other crops and in operating pilot projects for smallholder cultivation (para 4.17);

(e) the companies would implement changes in the wages of plantation workers, as recommended by the Project coordinating committee insofar as the recommended changes are in accordance with its overall wage policies (para 4.15);

(f) the companies would bear the foreign exchange risk an all direct foreign exchange expenditures (off- shore costs) onlent to them out of the IDA Credit (para 4.25); and

(g) accounts would be kept and audits would be made as indicated in para 4.28.

8.03 The following conditions would be fulfilled before the IDA Credit becomes effective:

(a) onlending agreements for the IDA Credit between Government and all three companies would have been signed (para 8.02);

(b) loan agreements between Government and the ADF and BADEA respectively, and between SOFIDE and the Caisse Centrale for parts of the Project to be financed by those institutions would have become effective (para 4.25); and

(d) an agreement between Government and SOFIDE with regard to the administration of the on-lent IDA funds would have been signed (para 5.05). - 28 -

8.04 A condition of disbursementon account of expendituresfor activities under the technical assistance,training of researchersand smallholders componentswould be the agreement on detailed proposals acceptable to IDA (paras 4.12 and 4.18).

8.05 Subject to the above assurances the Project would be suitable for an IDA Credit of US$9.0 million to the Government of Zaire. ANNEX 1

ZAIRE

OIL PALM PROJECT

Production, Marketing and Prices of Palm Oil

A. Prospects for the World Palm Oil Market

Production

1. World production of palm oil was around 2.9 million metric ton in 1975 and is expected to reach 4.6 million ton in 1980 and 5.9 million ton in 1985. World output of palm oil grew at 3.1% p.a. during the sixties, at over 11% p.a. during the first half of the seventies, and is expected to continue to grow at 9.5% p.a. until the end of the seventies. Thereafter, palm oil production is likely to expand at a slower rate of around 5.1% p.a. until the mid-eighties. Palm oil production grew both in absolute and relative terms to other fats and oils (Table 1). The sharp increase in the palm oil production in the seventies is the result of plantings of the sixties in Malaysia and Indonesia which became the world's largest suppliers of palm oil. During the late fifties, in contrast, about two thirds of the world's palm oil production came from Africa, mainly from Nigeria and Zaire, which then supplied more than half of the world's palm oil. Although still major producers, the combined share of Nigeria and Zaire in the output of palm oil dropped by 1974 to about 30%, slightly less than the share of Malaysia alone (Table 2). Although Malaysia is likely to remain the world's leading producer of palm oil, the decline in Africa's palm oil production is likely to slow down and probably be reversed, as rising per capita demand for fats and oils has led to large investments in oil palm in several West African countries.

Exports

2. World exports of palm oil followed roughly the expansion pattern of palm oil production. They grew at an average rate of 2.8% p.a. during the sixties, slightly below the 3.1% growth rate estimated for palm oil production. Towards the end of the sixties, exports began to pick up, reaching an average annual growth rate of 18.5% between 1970 and 1975. Malaysia, Indonesia and the Ivory Coast accounted for most of the rapid expansion of palm oil exports (Table 3). Exports from other African countries have been dropping since 1955. The drop has been particularly evident in the case of Nigeria and Zaire. This decline in exports reflects both a short- fall in production and increasing domestic consumption. Increasing consumption of palm oil in producing countries, mainly in Indonesia and West African countries, is expected to slow down the expansion of palm oil exports. World exports of palm oil are projected to grow at an average rate of 11% p.a. until 1980 (the same rate of growth as output of palm oil) and at a rate of 9% p.a. (slightly below the rate of growth of production) between 1980 and 1985. The above factors are likely to result in the share ANNEX 1 Page 2 of palm oil in world trade of fats and oils increasing from 6% during 1967-69 to a proportion progressively approaching that of soybean, i.e., 17.5% by 1980 and 23% by 1985 (Table 4).

Consumption

3. Developed countries are, at present, the main market for exports of palm oil. Per capita consumption in these countries is gradually approaching a saturation level and no large increase in overall demand is likely to occur unless new products and end uses are developed. Between 1960 and 1975, about 90% of palm oil exports went to developed countries. Germany, the Netherlands and the United Kingdon accounted for almost 60% of world palm oil imports. The shares of these three countries declined slightly during the past two decades, while that of the U.S. has tripled over the last ten years. The growing demand for palm oil in the U.S. is largely a result of the increase in the use of vegetable oils in consumer products at the expense of animal fats, as the latter's price rose relative to prices of vegetable oils, in general, and to that of palm oil, in particular.

4. In the developing world, India, Iraq and Pakistan have been the major importers of palm oil. Producing countries have consumed half of the palm oil output between 1960 and 1975. The demand in these countries is expected to increase substantially in the future, given the responsiveness of the demand for oils and fats to increases in income within the low income bracket, where a high proportion of the people in less developed countries fall.

Prices

5. Unlike other hard oils, such as coconut oil and palm kernel oil, which have a large distinct market because of their lauric acid content, palm oil has no physical or chemical properties which give it a qualitative advantage over other fats and oils in current end-uses. Because of this lack of specific demand, the price of palm oil depends on the overall situation for all fats and oils. Palm oil prices in the world market are most highly correlated with those of other low-priced fats and oils -- fish oil, tallow and lard -- and the medium-priced oils, mainly soybean oil and sunflower oil, which are widely used in the manufacture of margarines and shortening. Palm oil's only effective competitor in the manufacture of "inedible" oil based products is tallow which is traditionally cheaper than palm oil. Tallow has a competitive advantage in three major markets: the soap industry, the chemical industry and the animal feed industry (Table 5).

6. The level of palm oil prices relative to those of other fats and oils depends on the share of palm oil in total fats and oils exports. As this share is expected to increase, palm oil relative prices are projected to follow a declining trend. This is aggravated by the fact that the market for soft oils (mainly soybean oil) can be expanded faster than the market for hard oils (palm oil, coconut oil, palm kernel oil) as, although it is physically possible to substitute hard oils for soft oils, the costs of dehydrogenation are high and presently not economic, while the hydrogenation of soft oils is economic. Consequently, the growing output of hard oils (particularly palm ANNEX 1 Page 3 oil) can be marketed only at lower prices relative to those of soft oils (particularly soybean oil). A price differential of about 20% is expected by 1985 between palm oil and its main competitor, soybean oil. In constant 1974 US$, the price of soybean oil is expected to be $346 per ton in 1980 and $395 4n 1985 (cif European ports). The corresponding prices of palm oil are expected to be $310 per ton in 1980 and $320 in 1985.

B. Prospects for Palm Oil in Zaire

Introduction

7. Palm oil is the major edible oil in Zaire, with regard both to consumption and production. On the consumption side, palm oil represents around 85% of oil and fats consumed in the country. The remaining 15% represents a number of other oils and fats of which groundnut oil is the predominant product. Palm oil is expected to continue to keep its relative importance in the market for oils and fats in Zaire because of the comparative advantage which the production of palm oil has over other fats and oils in this country and because of the established preference for palm oil in the consumption pattern of Zairians.

8. Commercial production of palm oil in Zaire decreased from 213,000 ton in 1970 to 169,000 ton in 1976. At the same time, the quantity absorbed by the local market increased from 80,000 to 98,000 ton, while the quantity destined to outside markets declined from 133,000 ton to slightly over 70,000 ton. The rise in the local market's absorptive capacity is expected not only to continue, but even to accelerate due to the expected population growth and higher anticipated incomes. The Project is expected to slow down and, in the long run, to reverse the decline in the production of palm oil in Zaire. However, because the requirements of the local market are increasing at a faster rate, exports are expected to continue to decline and even- tually to cease altogether.

Supply

9. Zaire was a leading producer and exporter of palm oil in the fifties and early sixties. This role has been progressively relinquished as other countries stepped up their production programs while Zaire's production capacity deteriorated. Zaire has two main palm oil producing areas:

(a) the northern region, mainly the Cuvette Centrale in the Haut Zaire and Equateur Regions, where production is mainly in the form of industrial plantations, presently covering around 55,000 ha;

(b) the southern region, consisting of the Mayumbe in Bas Zaire Region and the Bandundu Region, where production centers around natural palms (around 200,000 ha in the Mayumbe and around 400,000 ha in Bandundu). In addition, Bandundu still has about 20,000 ha of old industrial plantations. ANNEX 1 Page 4

10. The decline in palm oil output has taken place simultaneously in the northern and in the southern regions. The decline was due mainly to an unfavorable price policy and to the political uncertainties that brought investment to a virtual standstill on the plantations in both regions and also caused a serious interruption in the maintenance of natural palm groves and of the infrastructure associated with them in the southern region.

11. Without the Project, palm oil production in Zaire would continue to decline at an even faster rate than it has in the past, since the present producers could at best be expected to continue exploiting the remainder of their productive capital and gradually withdraw from the oil palm sector. It is impossible in the event to predict how low the output might be, since one cannot predict the level of technology (hence the yield) that palm oil.producers would be using under such circumstances. Under the most favorable conditions, however, it is estimated that palm oil production from existing plantations and natural palms would continue to decline reaching 167,000 ton by 1980, around 154,000 ton by 1985, and up again to around 160,000 ton by 1990. The decline from the present production level would be, to a major extent, due to the expected decline in production in the southern area, where the present output of around 100,000 ton is expected to go down to 88,000 ton by 1980, 75,000 ton by 1985 and 69,000 ton by 1990. Output from existing plantations in the northern region is expected to remain at around 80,000 ton until 1985, and then go up to over 90,000 ton by 1990 (Tables 6 and 7).

12. The proposed Project is expected to start contributing to the oil output by 1982. This contribution, estimated at about 1,900 ton of palm oil in 1982, would progressively grow to about 17,000 ton by 1990, would reach a maximum of about 36,000 ton by 1992, and would continue at a rate of about 30,000 ton of palm oil p.a. until the year 2,000 (Tables 8 and 9). The Project would, therefore, result in the reversal of the present declining trend in production, and by 1985 Zaire's oil production would once more almost reach its 1975 level of 175,000 ton and by 1990 it would not quite have reached its 1970 level of 200,000 ton.

13. Detailed descriptions on each of the companies that would participate in the Project (PLZ, Buzira and CCP) are given in Annexes 2-4. In addition they are a number of other major palm oil companies in Zaire. They are "Cultures et elevage au Zaire" (CELZA), "Commission agricole pour l'Equateur" (CAE), and "Societe de Cultures au Mayumbe" (SCAM). CELZA is the second largest palm oil producer after PLZ. Its oil is produced on two plantations, Binga and Bosondjo in Equateur, formerly owned by "Societe des cultures", which was taken over by CELZA, along with about 20 other companies, the assets of CELZA have not been returned to their former owners. The company experienced a sharp decline in the production of palm oil from 28,000 ton in 1974 to 21,000 ton in 1976 and there are indications that management is deteriorating. CAE is a parastatal organization created for the establishment of Zaire's only new plantation since 1960. With financial assistance from the Eurepean Development Fund, an industrial block of 2,000 ha was planted between 1972 and 1976 at Dongo in Equateur. An outgrowers scheme planned at the same location failed, as only 400 ha of the projected 1,500 ha ANNEX 1 Page 5 were planted. Moreover, the 400 ha were not planted by smallholdersin 4 ha lots, as envisaged, but in much larger blocs by a few traders. Apparently only small number of farmers live in the area, and the project did not provide adequate incentives to encourage them to take up the cultivation of oil palms. SCAM has three oil mills in the natural palm area of Mayumbe, but has no industrial plantations. There also exist an unknown number of small oil palm companies in various parts of the country; no details are available but their production is believed to represent an insignificantpart of Zaire's total production.

Demand

14. Zairians use palm oil within the household for cooking, and industrially,mainly for soap manufacturing. In addition, palm fruit is used as a basic ingredient in certain national dishes. As consumption of oils in the low income bracket is largely responsive to increases in income, consumption of palm oil in Zaire would be expected to increase substantiallyas a result of a rising per capita income and an expanding population. The present analysis is based on the assumption that populationwould grow at the rate of 2.6% p.a. until 1985, at 2.5% p.a. between 1985 and 1990, and at 2.4% thereafter. Per capita GNP is assumed to grow in real terms at a rate of 2% p.a. between 1977 and 1985 and at 3% p.a. thereafter. The income elasticityof demand for fats and oils in Zaire is presently estimated at 0.88 and is expected to decline to 0.81 by 1985 and to 0.75 by 1995.

15. Given the above assumptions,part capita consumptionof palm oil in Zaire, presently estimated at 3.9 kg, is expected to reach 4.3 kg in 1980,. 4.8 kg in 1985, 5.3 kg in 1990 and 5.8 kg in 1995. This would correspond to a local consumptionof palm oil of 98,000 ton in 1976, increasing to 120,000 ton 1980, 152,000 ton by 1985, 190,000 ton by 1990, and 235,000 ton by 1995. Local consumptionincludes household use and industrialuse (Table 10).

16. Household use in the past six years varied between 56,000 and 48,000 ton a year with no identifiableupward or downward trend. This lack of trend is thought to be a result of the fact that a sizable proportion of the households produce their own oil or obtain their supply outside of the organized market, hence being subjected to year by year fluctuationsin their own production or in the supplies available on the informal market. As the market gets better organized, these fluctuationswould not only disappear, but a definite and more clearly identifiableupward trend in household consumptionof palm oil in Zaire would emerge (Table 11).

17. Industrialuse of palm oil increasedfrom 31,000 ton in 1970 to 50,000 ton in 1975 (Table 11). The major part of this oil went to soap factories,which absorbed around 20,000 ton in 1970 and around 33,000 ton in 1975. The second largest industrialuse for palm oil in Zaire has been in the manufacture of margarine and refined salad oils, with the former absorbing about 3,000 ton p.a., and the latter absorbing about 7,000 ton in 1975. A recent but potentially importantuse for palm oil is in the treatment of copper, where around 6,000 ton of oil were used in 1975. The ANNEX 1 Page 6 local demand for palm oil for industrial use is expected to continue its present upward trend as the demand for the major end product, soap, is responsive to rises in income and in the rate of urbanization, both expected to grow.

Exportable Surplus

18. As total output declined and domestic consumption increased, the surplus of palm oil in Zaire decreased progressively from 133,000 ton in 1970 to 77,000 ton in 1975. Most of this surplus has been exported through the formal channels, the remainder having found its way to neighboring countries through leakages. Official exports declined from 123,000 ton in 1970 to 52,000 ton in 1975, and an estimated 40,000 ton in 1976. Expected official exports for 1977 are estimated at less than 30,000 ton and are expected to continue declining and to probably cease within the next few years. Illegal exports.,on the other hand, is thought to have increased since 1973 and there are indications that it might continue to increase, especially if the real price of palm oil in Zaire is not kept in line with the world market prices and the local marketing system is not strengthened to make efficient pricing and adequate regional distribution of supplies feasible.

19. Based on the mission's estimates of the future needs of the local market, Zaire will cease to have a surplus of palm oil sometime in the mid- eighties without the Project, and with the Project sometime in the early nineties (Table 12). The country would, by then, have to import oil. This timing is based on the assumption that the Government would find ways to bring unofficial exports of palm oil under control; this is likely to be difficult if not impossible in view of existing pricing and marketing policies. If unofficial exports continue at the present rate, Zaire may have to start importing oil in the early eighties, and would certainly have no surplus for official export by 1983. In either case, the output due to the proposed Project would definitely be a substitute for potential imports, maybe as early as 1983, and at the latest in the early nineties.

Marketing Arrangements and Price Policy

20. Palm oil is presently sold directly by producers to wholesalers and manufacturers on the local market or directly exported by producers licensed to do so by the Ministry of National Economy. The local marketing system is greatly handicapped by the inadequacy of the transport system and by the inefficiency of the pricing mechanism, which presently deprives legi- timate middlemen of the incentives that would make them perform their func- tions properly, and encourages the entry into the market of speculators as well as cumulation of unnecessary middlemen at various stages of the marketing system.

21. The price of palm oil in Zaire is fixed by the Government for local sales and subject to world market forces for exports. The export ANNEX 1 Page 7 prices obtained for Zairian palm oil have been comparable to average prices obtained for palm oil from other sources,which shows that Zaire meets the quality standardsof importers (Table 13).

22. Prior to 1960, palm oil was sold on the local market at the export parity price. This encouragedthe developmentof two groups of producers, the large ones with importantmarketing facilities specializedin export and small producers,less equipped for export,but specialized in supplying the local market. After the monetary readjustmentof 1967, and in an attempt to control rising prices, the Government fixed the domestic price of palm oil at 75% of the then prevailingworld market price. This price, equivalent to Z. 62 per ton ex-factory,was not changed until 1974 when it was increased to Z. 92 per ton. During the same period the world market price (in current US$) increased from $224 per ton in 1967 to $378 per ton in 1973 and $669 per ton in 1974. The 1974 price increasewas, therefore, far from sufficientto account for the inflation that had taken place between 1967 and 1974. The price.was adjusted again in 1975 to Z. 145 per ton exfactoryand in 1976 it was set at Z. 290 ex-factory (DecreeNo. BCE/ENI/ 0047, of July 10, 1976).

23. The price of oil is fixed by the Governmentat the wholesale as well as at the retail levels. Nevertheless,although the price of all ex-factory sales is well controlled,the price at the retail level is not. Oil has been sold to domestic consumers at five or six times its official price. These distortionsare caused by the fact that the retail price of oil has been fixed in such a way that it does not reflect the retailer costs of transportation,storage or stock carrying,and of general inflationary pressures within the economy. The unofficialprice also reflects a shortage of oil at the retail level, includingKinshasa, presumablybecause traders are able to get a better price when they sell the oil across the border. ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

World Production of Selected Fats and Oils Production Mondiale de Certaines Graisses et Huiles (1000 m tons) (1000 tonne)

Fat/Oil 1960 % 1967-69 $ 1975 % 1980 % 1985 % Graisses et Huiles

Soybean Oil 3,295 12.3 5,358 15.5 8,550 19.2 11,900 22.4 13,500 23.2 Huile de Soya

Sunflowerseed Oil 1,665 6.2 3,652 10.5 4,070 9.2 5,200 9.8 5,4oo 9.3 Huile de Tournesol

Cottonseed Oil 2,165 8.1 2,310 6.7 3,005 6.8 3,400 6.4 3,700 6.4 Huile de Coton

Groundnut Oil 2,555 9.6 3,248 9.4 3,245 7.3 3,600 6.8 3,800 6.5 Huile d'Arachide

Rapeseed Oil 1,105 4.1 1,655 4.8 2,495 5.6 2,800 5.3 3,000 5.2 Huile de Colza

Olive Oil 1,180 4.4 1,307 3.8 1,500 3.4 1,600 3.0 1,700 2.9 Huile d'Olive

Palm Oil 1,250 4.7 1,382 4.0 2,925 6.6 4,600 8.7 5,900 10.1 Huile de Palme

Coconut Oil 1,955 7.3 2,072 5.9 2,515 5.7 3,000 5.6 3,200 5.5 Huile de Coco

Palm Kernel Oil 44° 1.7 382 1.1 695 1.6 900 1.7 1,000 1.7 Huile de Palmîste

Fish Oil 462 1.7 1,058 3.0 1,250 2.8 1,300 2.4 1,4oo 2.4 Huile de Poison

Butter 3,855 14.4 4,017 11.6 5,135 11.5 5,300 10.0 5,500 9.4 Beurre

Tallow 3,050 11.4 4,228 12.2 5,o85 11.4 5,500 10.2 5,900 10.1 Suif

Lard 3,733 14.1 3,988 11.5 3,95 8.9 7.7 4,300 7.3 Saindoux TOTAL 26,710 100.0 34,658 100.0 44,420 100.0 53,200 100.0 58,300 100.0

Source: USDA: 1960-69 IBRD: 1975-85

April 1977 Avril 1977 ANNEXE 1 ANNEX 1 Tableau 2 Table 2 ZAIRE OIL PALM PROJECT / PROJET PALMIER A HUILE

Palm Oil Production by Major Producers/Productiond'Huile de Palme par Principaux Pays Producteurs (1000 m tons) (1000 tonnes)

Country/Pays 1955-59 % 1960-64 % 1965-69 % 1970-74 %

AFRICA 761.9 66.4 988.7 77.6 923.5 66.3 1178.0 50.9

Nigeria 433.3 37.7 498.0 39.1 431.6 31.0 533.4 23.1 Zaire 224.3 19.5 223.7 17.6 170.8 12.3 180.2 7.8 Ghana - - 32.2 2.5 49.2 3.5 61.0 2.6 Ivory Coast 7.1 0.6 22.9 1.8 30.5 2.2 91.5 4.0 Angola 14.1 1.2 26.8 2.1 35.6 2.6 74.6 3.2 Cameroon 18.5 1.6 38.6 3.0 48.4 3.5 57.6 2.5 Sierra Leone - - 36.2 2.8 41.4 3.0 58.0 2.5 Liberia 39.9 3.5 40.4 3.2 41.2 3.0 7.0 0.3 Benin 13.8 1.2 38.8 3.1 32.9 2.3 42.6 1.8 Guinea - - 8.8 0.7 13.8 1.0 40.6 1.7 Others/Autres 10.9 1.1 22.3 1.7 28.1 1.9 32.5 1.4

ASIA 218.6 19.0 256.0 20.1 416.9 29.9 1043.3 45.1

Malaysia 63.4 5.5 108.5 8.5 240.4 17.2 728.1 31.5 Indonesia 155.2 13.5 147.5 11.6 176.5 12.7 273.7 11.8 China RP ------40.0 1.7 Others/Autres - - - - 1.5 0.1

LATIN AMERICA 17.6 1.5 27.7 2.2 53.5 3.8 92.2 4.0

Others/Autres 149.9 13.1 1.4 0.1 - -

World Total/ Total Mondial 1148.0 100.0 1273.8 100.0 1393.9 100.0 2313.5 100.0

April 1977/Avril 1977 ANNEXE 1 ANNEX 1 Tableau 3 Table 3

ZAIRE

OIL PALM PROJECT/PROJET PALMIER A HUILE

World Exports of Palm Oil/Exportation Mondiale d'Huile de Palme 1/ (1000 m tons) (1000 tonnes)

Country/Pays 1955-59 % 1960-64 % 1965-69 % 1970-74 %

AFRICA 373.0 64.5 341;9 55.9 220.0 31.2 176.1 13.1

Zaire 160.5 27.8 148.7 24.3 114.2 16.2 90.0 6.7 Nigeria 180.4 31.2 147.6 24.1 65.2 9.3 6.0 0.4 Ivory Coast 1.1 0.2 0.9 0.2 0.9 0.1 48.9 3.6 Benin 12.6 2.2 11.6 1.9 10.9 1.5 11.7 0.9 Angola 8.8 1.5 15.5 2.6 13.4 1.9 7.4 0.6 Cameroon 0.5 0.1 8.3 1.3 8.4 1.2 7.4 0.6 Others/Autres 9.1 1.6 9.3 2.5 7.0 1.0 4.7 0.3

ASIA 188.4 32.6 249.5 40.7 459.8 65.3 1100.5 81.6

Indonesia 121.2 21.0 113.9 18.6 153.6 21.8 229.7 17.0 Malaysia 67.1 11.6 108.4 17.7 231.9 32.9 674.0 50.0 Singapore - - 27.0 4.4 74.2 10.6 196.4 14.6 Others/Autres 0.1 - 0.2 - 0.1 - 0.4 -

EUROPE 16.4 2.9 18.3 3.0 21.2 3.0 61.6 4.6

LATIN AMERICA 0.2 - 2.5 0.4 3.7 0.5 5.2 0.4

OCEANIA ------4.3 0.3

World Total/ Total Mondial 578.0 100.0 612.2 100.0 704.7 100.0 1347.7 100.0

1/ Palm Oil export data for 1974: IBRD estimate/ Exportation d'huile de palme pour 1974: estimations de la Banque Mondiale

Source: FAO

April 1977/Avril 1977 ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

World Exports of Selected Oils and Fats Exportation Mondiale de Certaines Huiles et Graisses ' x (1000 m tons) (1000 tonnes) H

Fat/Oil 1960 % 1967-69 % 1975 % 1980 % 1985 % Graisses et Huiles

Soybean Oil 1,4oo 19.8 1,991 19.8 3,565 27.1 4,900 28.0 5,700 27.8 Huile de Soja

Sunflowerseed Oil 245 3.3 1,138 11.3 765 5.8 1,250 7.2 1,300 6.3 Huile de Tournesol

Cottonseed Oil 294 4.1 226 2.3 425 3.2 46o 2.6 510 2.5 Huile de Coton

Groundnut Oil 826 11.4 1,037 10.3 745 5.7 940 5.4 950 4.6 Huile d'Arachide

Rapeseed Oil 92 1.3 439 4.4 745 5.7 920 5.3 1,020 5.0 Huile de Colza

Olive Oil 69 1.o 82 0.8 63 0.5 100 o.6 110 0..6 Huile d'Olive

Palm Oil 587 8.1 607 6.o 1,800 13.7 3,050 17.5 44,690 22.9 Huile de Palme

Coconut Oil 1,152 15.9 1,182 11.8 1,425 10.8 1,650 9.4 1,750 8.5 Huile de Coco

Palm Kernel Oil 407 5.6 299 3.0 396 3.0 420 2.4 435 2.1 Huile de Palmiste

Fish Oil 222 3.1 672 7.7 6oo 4.6 740 4.2 790 3.9 Huile de Poisson

Butter 426 5.9 514 5.1 717 5.5 790 4.5 83o 4.1 Beurre

Tallow 1,076 14.9 1,447 14.4 1,4oo 10.7 1,820 lo.4 1,950 9.5 Suif

Lard 407 5.6 409 4.1 49q 3.7 44o 2.5 46o 2.2 Saindoux TOTAL 7,243 100.0 lo,043 100.0 13,136 100.0 17,480 l1o.0 20,495 100.0

Sources: USDA: 1960-69 in IBRD: 1975-85 F

ArH April 1977 Avril 1977 ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

e Prices of Selected Fats and Oils Prix de Certaines Graisses et Huiles - (In Constant 1974 US$/m ton) (En Dollars EU de 1974/tonne)

Year/ Soybean/ Sunflower/ Cottonseed/ Groundnut/ Rapeseed/ Olive/ Palm/ Coconut/ Palm Kernel/ Fish/ Lard/ Butter/ Tallow/ Année Soya Tournesol Coton Arachide Colza Olive Palme Coco Palmiste P6isson Saindoux Beurre Suif

1960 444.9 480.5 464.7 644.7 433.1 i,156.8 450.9 617.0 626.9 306.5 423.2 1,682.8 280.8 61 699.3 757.8 743.2 806.5 682.3 1,367.0 565.3 618.9 640.8 338.7 548.2 1,720.3 385.0 62 445.6 483.1 522.4 54o.1 434.0 1,239.2 424.2 492.9 500.8 204.2 428.1 1,614.3 269.o 63 434.8 460.2 473.9 522.6 419.3 1,698.5 432.9 557.7 559.7 312.0 421.2 1,755.1 275.0 64 397.0 493.8 484,1 61o.o 488.o 1,134.8 464.8 575.1 579.0 393.1 486.1 1,802.9 325.3

1965 515.1 56o.9 530.3 618.1 501.7 1,264.8 520.8 663.9 673,4 414.C 558.9 1,751.2 381.5 66 486.8 49o.6 621.2 521.1 455.1 1,233.0 440.2 604.4 505.5 365.6 526.C 1,553.8 335.8 67 399.8 392.4 699.6 523.8 381.3 1,277.1 414.6 607.1 46o.9 235.1 379.4 1,512.1 266.5 68 331,3 320.1 567.7 5o4.4 299.6 1,267.4 314,5 742.6 683.0 184.3 314.5 1,319.6 240.1 69 4o9.o 382.1 522.0 595.5 358.7 1,194.6 324.7 647.5 548.9 269.1 387.4 1,271,7 297.8

1970 514.8 555.1 593.7 635.6 491.4 1,172.2 436.o 665.8 719.4 415.9 454.5 1,229.2 338.8 71 510.0 592.1 619.0 696.4 465.8 1,148.0 412.1 585.8 529.0 349.0 413.7 1,654.8 309.5 72 392.0 473.4 470.5 618.6 336.9 1,330.0 315.1 339.8 354.3 264.3 364.5 1,755.5 259.9 73 569.2 587.6 612.1 668.4 483.5 1,712.0 462.7 628.0 6o1.1 418.7 456.6 1,193.5 435.8 74 795.0 983.0 939.0 1,077.0 745.0 2,174.0 669.o 998.0 1,010.0 559.0 602.0 1,216.0 448.o

1975 54o.7 645.5 634.1 748.5 481.3 2.127.7 379.2 343.3 383.4 300.5 418.4 1,457.8 297.0 76 308.3 492.o 528.9 553.6 319.8 1,927.2 332.2 278.8 295.2 270.6 336.2 1,443.3 311.6 77 314.7 465.2 490.2 540.1 314.7 1,639,9 300.3 3C4.8 320,0 254.9 289.7 1,300.3 279.; 78 325.0 439.9 455.3 528.9 315.2 1,401.1 303.3 339.8 339.8 240.3 299.8 1.169.9 259.9 79 335.0 470.0 419.8 518.8 310.3 1,194.8 307.0 380.0 370.2 230.1 299.8 1,059.8 245.1

1980 345.9 419.6 389.7 509.1 308.1 1,020,0 310.0 422.0 4oo.1 219.8 310.0 954.8 219.8

1985 395.2 439.9 490.7 573.2 362.6 1,211.5 320.0 475.1 460.3 264.9 345.0 1,109.9 257.1 »

t,j

Source: IBRD, DPS Commodities Division

April 1977 Avril 1977 OIL PAI PROJECT PROJ3ET PAICER A HUILE

Pel1 Oil Productiaa ia thi Norther A-rea vith md vithout Projeot 1/ Production d'huile de Palm d-m, la R. du Nord Avec et S-ec ProJet / (e toc) jtorre

PICHei7l CCP HevaCoi WZ iAE 9 e WitProject/ WOth PraJ-ce/ WithOut Projct/ ih Prmjt/ / Without ProJect/ With Projeot/ Without Project/ W1th ProJ at/ Withmut ProJ tc With Projet/ Wittheut ProJet/ With ProJect/ Without Projeo/ ith PraJt/ sooitd Yoe Projet Aunc Projet San ProJet Avec Projet lace Projet Avec Projet Slou ProJet A"c PoJet e Projet Ave Projet Slae Projet Avec Projet SH-m Projet A-n Projet Ar n e

1tê0 4o,00o 6,500 3,587 5,260 30,163 __ 85,500 1970 1971i 42,000 6,340 3,120 6,120 28,920 -_ 86,500 1971 1972 42,COO 6,416 3,276 6,835 27,773 __ 86,300 1972 1973 36 ,oo 6 230 3,240 6 140 25,390 -_ 77,000 1973 1974 41 000 5,604 2,931 5,600 28,865 -- 84,o0 1974 1975 42,000 4,639 3,677 4,837 25,047 __ 80,200 1975 1976 33,342 4,200 3,800 4,658 21,000 __ 67,000 1976 1977 38 632 3,850 3,932 6,686 21,000 -- 74,100 1977 1978 38 884 4,110 5,190 5,216 22,000 __ 75,400 1978 1979 38,660 4,100 5,64o 5,700 23,000 -- 77,100 1978 198O 38,925 4,500 6,279 6,496 23,000 1,000 79,200 1980 1îq1 39.284 5 000 6,788 6,528 24,000 2,DOO 81,600 1981 1982 38,232 40,010 5,200 5,340 6,938 6,938 6,562 24,000 2,000 82,932 84.816 1982 1983 34,332 39,3,0 6,ooo 6,460 7,400 7 718 6,699 25,000 3,000 82,431 88,267 1983 1984 30,812 40,250 6,ooo 6,86o 7,700 8,4.4 6,656 25,000 3,000 79,168 90.190 1984 1985 28,390 42,918 6,000 7,320 7,903 9,366 6,656 26,0Do 4,000 78,949 89,604 1985

1990 31,413 60,675 6,ooo 8,660 9,000 12,679 6,656 30,000 10,000 93,069 128,670 1990

199i 316413 58,413 6,oDo 8,46D 9,DDD 12,679 6,656 33,00D 10,000 93,069 126,278 1995 g 1970-1976: atul w.oduction; %/ 1970-1976 production -ctoc-il; Fro- 1977 cocarde: etimatmd producti« * pertir de 1977: production estie

Fbrruary, 1978 Fevier, 1978 ZAIRE

OIL PALM PROJECT PROJECT PALMIER A HUILE (D Palm Oil Production in the Southern Area: Production d'huile de palme dans la region du sud: (m ton) (tonne)

Bandundu Area/ Mayumbe Area/ Total Regionde Bandundu Région du Mayumbe PLZ 1/ Other Companies/ Traditional/ Industrial/ Traditional/ Autres Societes Traditionnelle Industrielle Traditionnelle_ 1970 22,000 28,000 29,500 24,000 24,000 127,500 1971 21,000 27,000 27,500 22,000 22,000 119,500 1972 20,000 24,000 19,700 18,000 18,000 99,700 1973 18,000 24,000 30,000 18,000 18,000 108,000 1974 17,000 20,000 30,000 17,000 17,000 101,000 1975 15,000 18,000 29,800 16,000 16,000 94,800 1976 19,400 19,000 31,000 16,600 16,000 102,000 1977 15,000 17,000 31,900 15,000 16,000 94,900 1978 14,000 16,000 31,600 14,000 17,000 92,600 1979 13,000 16,000 29,900 14,000 17,000 89,900 1980 13,000 15,000 29,800 13,000 17,000 87,800 1981 - 27,000 29,400 12,000 18,000 86,400 1982 - 26,000 27,300 12,000 18,000 83,300 1983 - 25,500 26,900 11,000 18,000 81,400 1984 - 25,000 26,600 10,000 18,000 79,600 1985 - 25,000 22,800 9,000 18,000 74,800 1990 - 21,000 21,000 6,000 21,000 69,000 1995 20,000 20,000 - 20,000 60,000

1/ PLZ plans to transfer its plantations and factories in the 1/ PLZ compte transférer ses installations du sud au South to a government controlled company by 1980. gouvernement aux alentours de 1980. 2/ Other companies include CCP, HPK, Madcille, and smallPortuguese 2/ Les autres sociêtds comprennent CCP, HPK, Madcille companies. These companies normally produce between one-half et de petites entreprisesportugaises. Ces and two-thirds of industrially produced oil in the Bandundu compagnies produisent normalement entre la Region. moitié Œ z et les deux tiers de l'huile produite commerciale- X February, 1978 ment au Bandundu. Fevrier, 1978 ZAIRE CD

OIL PALM PROJECT PROJET PALMIER A L'HUILE

Yield Projections Prévision des Rendements (m ton bunches/ha/year) (tonne ae regimesnhalan)

Year/Année PLZ Busira Lomami CCP

0 - 3

4 7 7 6

5 9 9 8

6 il il il

7 12 12 12

8 14 14 13

9 - 12 15 15 13

13 - 15 14 14 13

16 - 20 13 13 13

21 - 24 12 12 10

April 1977 Avril 1977 ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE pD t1 Production due to Project (m ton) Production due au Projet (tonne)

Palm Oil/Huile de Palme Kernels/Palmistes Total \ Company Total Palm Kernels/ Société Busira Buslra Oil/Total Total Year L PLZ Lomami CCP PLZ Lomami CCP Huile de Palme Palmistes Anne

1978 1978 1979 1979 1980 1980 1981 1981 1982 1778 140 - 445 35 - 1918 480 1982 1983 5058 460 318 1265 115 80 5836 1460 1983 1984 9438 860 724 2360 215 181 11022 2756 1984 1985 14528 1320 1463 3632 330 366 17311 4328 1985 1986 20282 1840 2426 5070 460 607 25548 6137 1986 1987 23548 2140 2969 5887 535 742 28657 7164 1987 1988 26152 2380 3399 6538 595 850 31931 7983 1988 1989 27934 2540 3579 6984 635 895 34053 8514 1989 1990 29262 2660 3679 7316 665 920 35601 8901 1990 1991 29446 2680 3679 7362 670 920 35805 8952 1991 1992 29050 2640 3679 7263 660 920 35369 8843 1992 1993 28610 2600 3679 7152 650 920 34889 8722 1993 1994 27904 2540 3679 6976 635 920 34123 8531 1994 1995 27000 2460 3679 6750 615 920 33139 8285 1995 1996 26630 2420 3679 6658 605 920 32729 8183 1996 1997 26178 2380 3679 6545 595 920 32237 8060 1997 1998 25740 2340 3679 6435 585 920 31759 7940 1998 1999 25486 2320 3679 6372 580 920 31485 7872 1999 2000 25090 2280 3520 6273 570 880 30890 7723 2000 2001 24650 2240 3370 6163 560 843 30260 7566 2001 2002 24198 2200 3130 6049 550 783 29528 7382 2002 2003 20712 1920 2830 5178 480 708 25462 6366 2003 2004 15960 1440 2300 3990 360 575 19700 4925 2004 2005 10680 960 1800 2670 240 450 13440 3360 2005 2006 5256 480 1000 1314 120 250 6736 1684 2006

Febriiar;,- -9' 'février 1978

CD > ZAIRE

OIL PALM PROJECT PROJET PALMIER A L'HPUILE

Estimated Local Consumption of Palm Oil Estimation de la Consommation Locale d'Huile de Palme

Total Local Con- Total Local Consomption Total Local Con- Total Local Con- sumption of Croundnut of other Oils and Total CNP per Per Capita Consumption Per Capita Con- sumption of fats and sumption of Palm Oil (000 m ton) j Fats (000 m ton) | Population / Capita / of cils and fats / sumption of Palm Oil / oils (000 m ton) / Oil (000 m ton) / Consommation Consommation Population PNB par Consommation par hab. Consommation par hab. Ensemble de la consomm. Ens. de la consomm. domestique domestique d'autres Year t Totale habitant d'huiles et graisses d'huile de palme d'huiles et graisses d'huile de Palme d'huile d'Arachide huiles et graisses Annee (million) (1974 $) (kg) (kg) (000 tonne) (000 tonne) (000 tonne) (000 tonne)

1970 21.6 116 4.3 3.7 92.9 80.0 8.6 3/ 4.3 1971 22.2 118 4.4 3.8 97.7 84.0 11.4 2.3 1972 22.8 120 4.5 3.9 102.6 89.0 12.3 1.3 1973 23.4 140 4.6 4.0 107.6 94.0 13.5 0.1 1974 23.9 150 4.8 2/ 4.1 114.7 98.0 14.9 1.8 1975 24.5 147 1/ 4.7 4.0 115.1 98.0 17.1 1976 25.2 143 4.6 3.9 115.9 98.3 17.6 1977 25.9 146 4.7 4.0 121.7 103.6 18.1 1978 26.5 149 4.8 4.1 127.2 108.7 18.5 1979 27.2 152 4.9 4.2 133.3 114.2 19.1 1980 27.9 155 5.0 4.3 139.5 120.0 19.5

1985 31.7 170 5.5 4.8 174.4 152.2 22.2

1990 35.8 197 6.0 5.3 214.8 189.7 25.1

1995 40.5 228 6.5 5.8 963.3 234.9 28.4

1/ Per capita CMP declined in real terms by 2.1% in 1975 and by 2.5% in 1976 i/ Selon des estimations du FMI, le PNB real par habitant a diminué de 2.1% en 1975 according to IMF staff estimates. et de 2.5% en 1976.

2/ IBRD, DPS, Commodities Division estimates. This year served as a base for 2/ Estimation de la Banoue Mondiale qui a servi comme base pour les prévisions the estimate.

3/ IBRD estimate for the years 1970-74. Production of groundnuta is not expected 3/ Estimation Banque Mondiale pour les annees 1970-74. Il est peu probable eue to increase substantially and informed sources in Zaire put an upper limit of 3% la production d'huile d'arachide augmente au Zaire a un -aux superieur a 3% on the rate of increase of groundnut oil production as no groundnut program exists par an puisque aucun programme de production n'est prevu et la capacite in the country and no crushing capacity is available. d'usinage n'est pas disponible.

Source: IBRD Staff Estimate Source: Estimation Banque Mondiale

July 1977 juillet 197j97> ZAIRE

OIL PALM PROJECT PROJET PALMIER A L'HUILE

End Use of Palm Oil Utilisation de l'Huile de Palme (000 m ton) (000 tonne)

Use by Household/Utilisation par les Menages Through Informal Export/Exportation Through Formal Channels / Industrial Use / Through Formal Through Informal Year/ Channels / Marché Parallèle et Utilisation Channels / Channels / Année Marché Régulier Autoconsommation 1/ Total Industrielle Marché Régulier Marché Parallèle 2/ Total Total 1970 16 33 49 31 123 10 133 213 1971 16 33 49 35 112 10 122 206 1972 18 28 46 43 87 10 97 186 1973 21 31 52 42 70 20 90 185 1974 22 34 56 42 62 25 87 185 1975 23 25 48 50 52 25 77 175

1/ Difference between total local use and formal 1/ Diffèrence entre l'ensemble de l'utilisation marketing including industrial use. domestique et la partie passant par le marché régulier, v comDrise l'utilisation industrielle. 2/ Difference between total availability and local use as 2/ Différence entre la cuantité disponible et la quantité well as official export. utilisée localement et exportée par le marché régulier

Source: Zaire, Department of Agriculture, Bureau d'Etudes Source: Zaire, Département de l'Agriculture, Bureau d'Etudes

July 1977 juillet 1977

FI-- ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Total Production and Use of Palm Oil 1/ Ensemble de la Production et l'Utilisation d'Huile de Palme 1/ (m ton) (tonne)

Use / Utilisation Outside Market/ Production Marche Exterieur Without Project/ With Project/ Local Market/ Without Project/ With Project/ Sans Projet Avec Projet Marché Local Sans l'roJet Avec Projet

1970 213,000 80,000 133,000 1971 206,000 84,000 122,000 1972 186,000 89,000 97,000 1973 185,000 94,000 91,000 1974 185,000 98,000 87,000 1975 175,000 98,000 77,000 1976 169,000 98,300 70,700 1977 169,000 103,600 65,400 1978 168,000 108,700 59,300 1979 167,000 114,200 52,800 1980 167,000 120,000 47,000 1981 168,000 125,800 42,200 1982 166,232 168,100 132,300 33,932 35,800 1983 163,831 169,700 138,500 25,331 31,200 1984 158,768 169,800 145,200 13,568 24,600 1985 153,749 164,400 152,200 1,549 12,200 1990 162,069 197,700 189,700 -27,631 8,0ù0

1995 153,069 186,208 234,900 -81,831 -48,6E92 1/ 1970-1976: actual figures,from 1977 onwards: estimates 1/ 1970-1976: chiffres réels; à partir de 1977: estimations

February, 1978 Fevrier, 1978 ANNEXE 1 ANNEX 1 Tableau 13 Table 13

ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Export Prices for Palm Oil Prix de l'Huile de Palme a l'Exportation

World Market Averages/ Year/ Zaire Prix Mondial Moyen Annee Current $ 1974 $ Current $ 1974 $

1970 262.74 440.8 260.0 436.2

1971 274.57 433.7 261.0 412.3

1972 231.36 335.8 217.0 314.9

1973 331.58 405.8 378.0 462.7

1974 643.10 643.1 669.0 669.0

1975 552.64 482.6 434.2 379.2

1976 410.63 336.8 406.7 333.6

Sources: Zaire: Tropical Product Sales SA (Brussels) World Market Averages: IBRD

July 1977 juillet 1977 ANNEX 2

ZAIRE

OIL PALM PROJECT

PlantationsLever au Zaire (PLZ)

Introduction

1. PLZ, originally called Huileries du Congo Belge (HCB), started its operations in Zaire in 1911 and has been the largest plantation company ever since. The company is owned by UNILEVER Ltd, which also owns the largest soap factory in Kinshasa, Marsavco, as a separate company independent from PLZ. Prior to the Zairianization of the industrial and commercial sector, UNILEVER also owned a trading company, SEDEC.

2. PLZ was nationalizedin 1974, but never Zairianized. In September 1976 the company was returned to its former owners who are at present nego- tiating a 40% participationin the company by the Government. The Govern- ment has already agreed in principle to such an arrangement. The production of palm oil is by far PLZ's main activity, but the company also owns rubber, cacao and tea estates. The areas and volumes of production for 1976 were as follows:

Area Production (ha) (ton)

Palm Oil 34,400 52,600

Rubber 7,500 5,900

Cacao 3,800 1,700

Tea 400 1,200

Palm Oil Production

3. In 1958, PLZ produced 52,000 ton palm oil, almost equal to the 1976 production given above. But PLZ's share of Zaire's total industrial palm oil production increased from 23% in 1958 to about 42% in 1976 because of the decline in production of other companies. It should be noted, however, that PLZ's production did not remain stable between 1958 and 1976 either. A low production of 28,000 ton was recorded in 1965 and a high of 63,000 ton in 1971. Since 1971 the production declined gradually to the 1976 level of 53,000 ton and it is expected that the productionwill go down by a further 5,000-6,000ton over the next five years until the first new Project plantings come into production.

4. The source of the throughput of PLZ's palm oil productionhas also changed over the last 20 years. During the 1950's almost half of the production came from fruits collected in the natural palm areas but that proportion ANNEX 2 Page 2 has declined to less than one quarter at present. It is expected that this trend will continue in the future and that the natural palm areas may cease art"ogetheras a source of fruits for PLZ and also for other industrial companies. In the case of PLZ this will probably be accompanied by the winding up of the company's operations in the Bandundu Region since it has become evident that the Region is not well suited for commercial oil palm plantations.

Palm Oil Plantations

5. PLZ has at present four oil palm plantations in the northern Equateur and Haut Zaire Regions and three in the Bandundu Region. The areas of each plantation were as follows on January 1, 1977 (in ha):

North Lokutu 8,865

Yaligimba 8,005

Boteka 2,974

Ebonda 3,733

Sub-total 23,577

South Bongimba 820

Lusanga 6,914

Mapangu 3,094

Sub-total 10,828

Total 34,405

These areas do not include some 6,500 ha at the Lokutu and Yaligimba plantations which were abandoned in the last decade and which would be rehabilitated under the Project.

6. There are big differences in age distribution of the plantations between the north and south, as shown below (in percentages):

Planting Period Before 1952 1952-56 1957-61 1962-66 1967-71 1972-76 Total

Northern Plantations 8 22 42 4 8 16 100

Southern Plantations 68 12 16 4 - - 100 ANNEX 2 Page 3

More than two-thirds of the southern plantationswere planted before 1952 and have surpassedwhat is usually regarded as their productive lifespan. But the age distributionof the northern plantationsis also very skewed since no less than 72% of all plantations is more than 15 years old. Very little was planted during the mid 1960s. Only during the last five years, particularly in 1973 and 1974, were significantnew plantingsmade, although only at one-thirdof the scale of the late 1950s and early 1960s.

Yields

7. Average annual production of fresh fruits bunches for the four northern plantationswas as follows during the last five years (ton):

1972 1973 1974 1975 1976

Lokutu 11.1 9.7 10.4 10.6 9.8

Yaligimba 8.5 7.5 8.4 7.8 7.1

Boteka 10.3 8.8 9.8 10.1 8.8

Ebonda 8.2 7.5 8.1 7.7 6.5

These tonnages are mostly on the low side and there has been some decline over the last five years. Aging of the plantations,combined with labor shortages (reflectedin sub-standardmaintenance), and lack of fertilizersin recent years have probably all contributed to a falling off in the yield. Labor shortages were most pronounced at Ebonda and Yaligimba while both plantations, particularlyEbonda, suffered also from theft of fruits. For this reason, and also because PLZ wants to concentrateits activities in a few large estates, no further plantings are currentlyplanned for the Ebonda plantation. The above production figures indicate that in recent years the best results were achieved at the Lokutu plantation. In particularthe young plantings have been doing well. The production of the 1970 plantings exceeded 15 ton ffb per ha in 1976, while the 1971 and 1972 plantings have already produced 8 and 7 ton respectively. For the reasons given above the 1969-71 plantings at Yaligimbahave been doing less well and produced only 7 to 8 ton per ha.

Planting Program

8. During the five-year Project period (1978-1982)9,900 ha would be planted at Lokutu, Yaligimba and Boteka in accordancewith the following schedule (ha): ANNEX 2 Page 4

1978 1979 1980 1981 1982 Total

Lokutu - Replanting - 140 500 260 120 1,020

Rehabilitation 720 860 500 800 870 3,750

Sub-Total 720 1,000 1,000 1,060 990 4,770

Yaligimba- Rehabilitation 400 800 1,000 1,000 1,000 4,200

Boteka - Replanting - - - 150 200 350

- Extension 150 180 200 50 - 580

Sub-total 150 180 200 200 200 930

Total 1,270 1,980 2,200 2,260 2,190 9,900

Mechanization of land-clearing and road construction is necessary for a program this size. At Yaligimba the land undulates gently and mechanization is possible in the entire plantation. But in Lokutu about 40% of the land consists of rather steep hills where clearing can only be done by hand.

9. The necessary seeds for PLZ and the other companies' planting programs will be produced by the Binga research station (jointly owned and operated by PLZ and CELZA) and PLZ's own multiplication center at Yaligimba. The combined production of the two centers over the coming years is expected to be as follows (in '000 seeds):

Wilt Resistant Others

1977 500 1,400

1978 600 2,000

1979 750 2,500

1980 950 3,000

1981 1,050 4,000

Wilt resistant seeds are necessary for Boteka and Yaligimba and some parts of Lokutu. About 3 ha can be planted with 1,000 seeds. The estimated seed production would thus permit an increase in plantings from about 5,500-6,000 ha in 1978 to about 15,000 in 1982, of which 3,000 ha wilt resistant. This is largely sufficient to cover the Projects needs and would even permit large scale plantings outside the Project. ANNEX 2 Page 5

ExtractionRates

10. The oil extraction rate at the four northern plantationsvaried in 1976 between 19.1% in Yaligimba and 20.2% of fresh fruit bunches at Boteka; at Lokutu the rate was 19.6%. At all plantations the extraction rates were better in 1976 than in previous years. In the southern areas the extraction rate was about 12.5% - 15%, due to the high proportion of unimproved natural varieties which contain larger kernels but less oil than the improved varieties. The extractionrate of palm kernels varies normally between 4.5% and 5.5% of fresh fruit bunches in the north and between 6.5% and 7.5% in the south.

Oil Mills

11. The oil mills at Yaligimba,Boteka and also Ebonda, are equipped with modern screw presses but the three Lokutu mills still have the old hydraulicpresses installed in the late 1940s and early 1950s. The Yaligimba mill has two Wecker presses with a combined capacity of about 25 tons ffb per hour and one Colin press with a capacity of 12.5 ton as a stand-by. Under the Project a new boiler plant would be installed to replace two old ones. The Boteka mill has one 12.5 ton Wecker press and does not require new investments during the Project period. Of the three mills at the Lokutu plantation, two, namely Lukumete and Lokutu, are located on the Zaire river and the third one, Mosite, some 60 km inland. All three mills are equipped with four hydraulic Stork presses with a combined capacity of 8.5 ton ffb for each mill. Under the Project two new 12.5 ton Wecker type presses would be installed in Lukumete in 1978/79 and another three in Lokutu in 1981/82. The Mosite mill would be closed down in 1982 after the completion of the works at Lokutu. Modernizationof Lokutu would in fact virtually amount to the constructionof a new mill. In Lukumete an important part of the equipment is still in good working conditionand would not be replaced.

Management

12. The staffing situation of PLZ has changed drastically during the last 20 years. In 1958 there were still about 260 expatriatestaff in the company'ssenior positions and only a few Zairians. By the end of 1973 the number of expatriateswas down to about 80 and by the end of 1976 only 44 were left, of whom 19 in Kinshasa and 25 on the plantations. The number of senior Zairian staff increased to 116 by the end of 1976, of whom 30 in Kinshasa and the other 86 in the field. Key management and technical positions are still filled by expatriatesand their continuedpresence is essential for the success of the Project. In fact an additionalfive expatriatepositions are necessary to carry out the next five years planting program. The rapid pace at which Zairian nationals have been nominated to senior positions has been accompaniedby some adjustment problems, both on the part of the remaining expatriates and the Zairian staff. But on the whole collaboration between expatriateand Zairian staff has been excellent ANNEX 2 Page 6 throughout the last two decades and the company has continuously been managed in a very responsible manner. The company's management position, both in Kinshasa and in the field is indeed its strongest assat and should guarantee an orderly implementation of the Project.

Labor Situation

13. The company employed about 22,000 workers in 1975, about 3,000 less than in 1968. It has become increasingly difficult to recruit and retain laborers during the last decade. The problem exists for all plantation companies and it seems difficult to state the precise reasons for this. Insufficient wages is one part of the problem. In real terms wages have definitely failed to keep up with the sharply increased prices (and often non-availability) of basic necessities. Unofficial PLZ estimates indicate that real wages have gone down by as much as 75% since 1960. A decline in the level of social services, i.e. schools, hospitals and stores, is cited as another, equally important, part of the problem. In some places the local population would probably be better off if it grows its own cash crops, for example rice in the Yaligimba area, since this generates a higher cash income than the companies are able to provide. It is difficult to believe that the people will not work anymore, as some old hands suggest, but it rather seems that the wholly inadequate price policies of the last decade are at the root of the problem. The very low official prices for oil sold on the domestic market, combined with heavy export taxes seem to have deprived the companies of the possibility to pay adequate wages, provide reasonable social services and make the necessary re-investments. The problem was obviously compounded by uncertainty regarding ownership during the last three years. It seems, therefore, that restoration of adequate conditions which would attract the required number of workers is vital for the rehabilitation of the oil palm sector. The recent substantial increase in the price of oil sold on the domestic market, followed by a 20% increase in wages should be regarded as important first steps in the right direction. But it is almost certain that further steps to improve the situation are necessary.

Financial Situation

14. PLZ is the company that was the least affected by the various changes imposed on the oil palm industry. It did lose a number of expatriates during the transition, but the caliber of the Zairians who replaced them is relatively high. Thus, apart from control of operations, the close liaison with London on such matters as the appropriate application of fertilizers, the procurement of spare parts, the maintenance and extension of installations and nurseries and general financial guidance was maintained throughout the period, and the current assets of PLZ were not dissipated.

15. Although PLZ continued to export about one third of its palm oil production, which was sold through Unilever in Belgium, foreign exchange for the purchase of fertilizers, spare parts, tractors, etc., was insufficient to cover the company's needs. The export price was almost twice as ANNEX 2 Page 7 high as the former local market (controlled)price, and because of this, PLZ managed to break even on its palm oil operations. PLZ's other assets, e.g. kernel crushing plant, warehouses, offices, etc. were not taken away from them, and the revenue from these activities, at a time when the local market price for palm oil was pegged below production costs, allowed the company to maintain its financial stability. PLZ also has the advantage of having its own storage tanks and "beaches",and, being on the main river, transport of its products to Kinshasa and delivery of its equipment, fertilizers, materials and supplies presented fewer problems to PLZ than to most of the industry.

16. Neverthelessthe tight financial situation during this transition prompted Unilever to examine closely its Zairian investments. As a result it was decided to divest PLZ of its southern properties and installations at the earliest opportunity,and to treat them as a separate company from 1.1.77 until their divestiture. It was also decided to concentratefuture development at Lokutu, Yaligimba and Boteka, gradually phasing out the Ebonda plantation.

17. Comparativefinancial status and results of PLZ for 1974, 1975 and 1976 are shown below:

PLZ Financial Results (9 '000)

1974 1975 1976

Gross Operating Revenues 31,526 22,242 31,759

Operating Costs (22,374) (20,312) (23,834)

Depreciation (793) (806) (884)

Net Operating Income 8,359 1,124 7,041

Rents and other Income 987 1,146 1,380

Current Taxation (5,200) (1,110)/i(4,701)

Dividends Declared (1,148) - -

Retained Income 2,998 1,161 3,720

Return on Investment (%) 9.7 2.7 7.8

/1 Includes a reduction of Z 310,653 of 1974 taxation. ANNEX 2 Page 8

PLZ Balance Sheets at Dec. 31 (Z '000)

1974 1975 1976

Net Fixed Assets /1 31,508 31,914 33,067

Current Assets-

Inventories 6,723 7,613 12,489

Debtors, etc. 6,468 4,789 9,684

Cash 7,533 4,909 4,019

Less Creditors /2 (9,621) (5,453) (11,767)

Net Current Assets 11,103 11,858 14,425

Net Assets 42,611 43,772 47,492

Represented by

Capital and Statutory Reserves 2,880 2,880 2,880

Revaluation Reserves 33,994 33,994 33,994

Undistributed Income 5,737 6,898 10,618

42,611 43,772 47,492

/1 Including proforma revaluation agreed with Portfolio Dept. at 12.31.74.

/2 Including unpaid dividends Z1.3 million. ANNEX 3

ZAIRE

OIL PALM PROJECT

Busira - Lomami

Introduction

1. The Busira-Lomamicompany is owned by a Belgian group, AGRICOM. The company was Zairianized in 1973, nationalizedin 1974 and handed back to AGRICOM in September 1976. During the Zairianizationand nationalization Busira was amalgamatedwith several other companies into "Entreprises industrielles,agricoles et commerciales" (ENTRIAC). The merger of the companies included both their management and their accounts. This caused considerabledifficulties when the companies had to be disentangledagain after the retrocessionwas announced.

2. Busira's main activity is the productionof palm oil, but its rubber operationsare also important, and the company produces some coffee as well. Areas and production volumes were as follows in 1976:

Area Production (ha) (ton)

Palm Oil 3,750 4,250

Rubber 4,300 3,950

Coffee 400 250

Rubber productionis scattered on a large number of isolated small estates and transport of rubber sheets has become an increasinglydifficult problem. The company does not plan any re-investmentsin rubber. Coffee is grown on a few small estates; the company also buys coffee from the surroundingvillages.

Oil Palm Areas and Production

3. Busira's oil palms are concentratedon one plantation at Bembelota in the downstreamsection of the Lomami river, near Kisangani. Prior to the political upheavals of the early 1960s Busira had about 12,000 ha. oil palms and produced some 16,000 - 17,000 ton palm oil per year. The plantations were virtually abandoned in 1964 and the production in 1965 was only 1,400 ton oil. A few years later operationswere resumed on a limited scale and by 1969 productionhad increasedagain to almost 8,000 ton. Thereafter productiondeclined gradually to the present level of just over 4,000 ton, mainly because of aging of the plantationsand, during the last few years, reduced maintenance. ANNEX 3 Page 2

4. At present Busira has about 3,750 ha; the age distribution of the trees is as follows:

Planting Period 1952-56 1957-61 1962-66 1967-71 1972-76 Total

Percentages 20 33 - 8 39 100

No new plantings were made between 1961 and 1970, because of the adverse political and economic conditions. No plantings were made in 1975 either, because of the poor quality of seeds supplied the previous year by the Yangambi Station. In 1976, however, a record 636 ha were planted with seeds from PLZ's Yaligimba multiplication center.

Yields

5. Production figures per ha were as follows during recent years (ton):

1969-71 1972-74 1975 1976

Fresh Fruit Bunches 8.4 8.4 7.5 7.1

Palm Oil 2.0 1.9 1.6 1.5

There was a significant decline in the yields during the last two years. The oil extraction rate has always been among the highest in the country and fluctuated between 23% and 23.7% of ffb during the period 1968-1972. Lately there has been some decline to about 21.1% in 1976. Palm kernel extraction rates have fluctuated between 4.1% and 4.8% of ffb over the last nine years without showing a clear upward or downward trend. The productive capacity of the Bembelota area is generally regarded as very good, perhaps the best in Zaire.

Planting Program

6. Busira plans to replant another 350 ha in 1977 and 120 ha in 1978 from its own resources. During the Project period 1978-1982 Busira would develop a 900 ha extension bloc at Lugo which would allow the company to make better use of its nearby Bembelota mill. The planting program provides for 100 ha in 1978 and 200 ha in each of the following four years. The replanting program would be resumed in 1983. The company has tentative plans for the development of a second plantation in the area, provided the economic and political environment are favorable.

Oil Mill

7. The Bembelota oil mill was built in 1959 and has a capacity of 18 ton ffb per hour. The mill has two Colin screw presses while most of the other equipment was procured from Stork. Lack of spare parts seriously ANNEX 3 Page 3 impaired normal operations during recent years but the necessary replacements will be made in 1977 under the terms of the special credit made by the EEC to the Government of Zaire. No major investments are necessary during the Project period.

Management

8. The number of expatriate staff of the company has gone down from 18 in 1972 to 10 in 1976. Four of them are based in the Kinshasa office and the other six are in the field, of whom three are concerned with the company's oil palm operations. The number of senior Zairian staff involved in Busira's oil palm activities increased from 13 in 1972 to 16 in 1976. An additional senior Zairian plantation officer would be provided under the Project. The company's management situation, both in Kinshasa and in the field, is satisfactory on the whole.

Labor Situation

9. Busira at present employs about 1500 workers in its oil palm operations as against 1,250 in 1972. All the laborers are hired from villages in the vicinity of the plantations and so far no special recruitment efforts were needed. Recently, however, the company has been increasingly faced with difficulties to maintain the plantations properly, partly because chemicals for weed control were unavailable and partly because of increased absenteeism amongst the laborers. As with all other companies, the improvement of both the social conditions on the plantations and the earnings of the workers appear to be essential requirements for the Project's success.

Financial Situation

10. Busira Lomami was one of the companies most affected by the Zairianization of the oil palm industry. Its plantations were severely affected by non-supply of fertilizers. Its working capital was merged with that of Hevea - Cequa into ENTRIAC, where most of realizable assets were allegedly applied to the purchase of an office building and a tug-boat, which have since remained the property of ENTRIAC. After the retrocession Busira was invoiced by ENTRIAC for rent of the limited space it occupied in ENTRIAC's office building, and since it no longer had any cash, Busira had to obtain an overdraft to finance its operations. At 12.31.76 Busira had outstanding bank loans (agricultural credits) amounting to Z 830,000, but these are intended to be repaid in the course of 1977, when Busira's excess inventories of rubber and palm oil are expected to be sold off. Busira has also obtained access to Z 600,000 in foreign exchange from the EEC, which will be drawn down in 1977, to provide urgent machinery replacements and spares. This is to be repaid by 1980.

11. Busira's balance sheets and trading results for 1972, 1973 and 1976, are shown below. No separate accounts were kept in 1974 and 1975, and it is not possible to calculate or estimate for these years. ANNEX 3 Page 4

Income Statements

1972 1973 1976 …____- (Z '000) …

Sales - Rubber 1,830 Palm Oil 869 Kernels 50 Coffee 424 3,173

Cost of Sales 2,381 Operating Income 301 735 792 General Expenses 151 142 174 Depreciation 196 269 269 Special Items - 129 - Interest - - 48

Net Income (Loss) (46) 195 301

Previous Balance 7 (39) (278)

Balance Sheets

1972 1973 1976 …------(Z'000) -- …____

Net Fixed Assets 5,160 5,116 2,071

Current Assets

Cash (overdraft) /1 72 278 (739) Inventories 709 1,202 1,472 Investments 49 49 2 Debtors, etc. 362 287 1,117

Less: Current Liabilities (293) (501) (525)

Net Current Assets 899 1,315 1,327

Net Assets 6,059 6,421 3,398

Equity

Capital and Reserves 1,203 1,203) ) 3,375 Revaluation of Assets 4,895 5,072) Undistributed Income (Loss) (39) 156 23 6,059 6,431 3,398

/1 Including short term credits. ANNEX 4

ZAIRE

OIL PALM PROJECT

Compagnie de Commerce et de Plantations (CCP)

Introduction

1. CCP is owned by a Belgian parent company, OLFICA. Along with most other foreign owned companies CCP was Zairianized in 1973, nationaiîzed in 1974 and given back to the Belgian owners in September 1976. Unlike Busira- Lomami and Hevea-Cequa, CCP was not amalgamated with other companies during the interim but, as many others, it did suffer from bad management as substantial numbers of incompetent people were hired. After the retrocession measures were announced these people were all dismissed.

2. CCP has no interest in plantations other than oil palms. The company has its plantations in the Equateur Region, near the town of Basankusu and also operates four oil mills in the southern Bandundu Region, where the company still collects fruits in the natural palm tree areas. In the early 1970s the Bandundu section of CCP produced about 6,000 ton of oil per year. Since that time production declined gradually to about 3,500 ton in 1976 and is expected to decline further to about 2,000 ton by 1986.

Oil Palm Areas and Production

3. In the Basankusu area, CCP has plantations at five different locations and the company operates two oil mills, Lisafa and Ndeke, both located on the downstream section of the Maringa river, 40 km apart. At the end of 1976, the area planted was as follows:

Oil Mill Plantation Area (ha.)

Lisafa Lisafa 2,427 Bokakata 73 Balangala 155

Sub-total 2,655

Ndeke Ndeke 1,182 Waka 475

Sub-total 1,657

Total CCP 4,312

The Lisafa and Ndeke plantations are the two largest and are both located around the two oil mills. The Waka plantation is 43 km from Ndeke and the Bokakata plantation (planted in 1974 and 1975) 34 km from Lisafa. The Balangala plantation (planted in 1971 and 1973) is no less than 120 km from Lisafa, which makes transport of the fruits extremely costly. The ANNEX 4 Page 2 three smaller plantations were all set up near existing population pockets, with the intention of recruiting workers locally. The distances from Waka and Bokakata to the mills are manageable, but lt was c 2lis-ake to locate a plantation at Balangala as sufficient workers are not available there to make it a separate unit with its own mill. Presently no further plantings are planned for Balangala.

4. CCP has a higher proportion of young plantations than any of the other companies included in the Project, as shown below:

Planting Period 1952-56 1957-61 1962-66 1967-71 1972-76 Total

Percentages 7 19 3 36 35 100

More than 70% of all plantings are less than ten years old and their main contribution to the company's production is still to come, provided the plantations can be properly maintained. Lack of maintenance, mainly because of a shortage of workers, was the main problem in recent years particularly with regard to the new plantings. In fact, in 1976, CCP grossly overestimated its capacity to plant and maintain its plantations. Of the 458 ha of new plantings, 265 ha were planted under existing old trees without prior clearance of the fields, because both the necessary labor and the poison to kill the old trees were unavailable at that time. Those 265 ha, which are not included in the areas given above, have to be written off and replanted again.

5. CCP's plantations produced about 3,800 ton of oil in 1976 against 3,550 ton in 1970. The yield per ha was a rather low, 6 ton ffb, due to the large proportion of young plantations, as well as the lack of fertilizers during the last three or four years. With proper maintenance CCP's new plantations should certainly be capable of producing 12 to 14 ton ffb per ha at full maturity. The oil extraction in the two mills fluctuated in recent years between 19% and 20% and the production of kernels has been about 4% of ffb.

Planting Program

6. CCP's first priority would be to improve the state of maintenance of its plantations, particularly the young ones which are not yet in production. This would include replacements of trees in the young plantations, where necessary, and is estimated to be completed by the end of 1978. In the course of 1978 CCP's nursery would be reestablished (it had been temporarily abandoned) and the first new plantings, i.e. replanting of 265 ha mentioned in paragraph 4, would take place in 1979. From 1980 onwards a modest extension program would be implemented, i.e. 250 ha in 1980, 400 ha in 1981 and 500 ha in 1982. No replantings would be made until 1983 since all existing plantations can be kept in production until that time.

Oil Mills

7. The mill at Ndeke was built in 1968 and is equipped with Kerckhoven machinery, including four centrifuges. The capacity of the mill is 4 ton ffb ANNEX 4 Page 3

per hour of which only about 50% is utilized at present. CCP has ordered a 13 ton ffb per hour Wecker press for Ndeke, to be financed from CCP's allocation of the special credit made available to Zaire by the European Economic Community. This would make the excess capacity of Ndeke even greater. The mill at Lisafa was built in 1971 and is the most modern oil mill in Zaire. It has one 13 ton ffb per hour Wecker screw press (but no stand-by). The present sterilizing facilities limit the mill's capacity to about 10 ton ffb per hour, of which only 30% is utilized. Lack of spare parts prevented satisfactory maintenance of the Lisafa mill in 1976 and the oil extraction rate has fallen below 19%. CCP has ordered the necessary spare parts for Ndeke along with the new Wecker press. In fact CCP may find it wiser to install the new Wecker press in Lisafa as a stand-by, rather than in Ndeke, where the four existing centrifuges continue to provide satisfactory extraction rates of close to 20%.

Management

8. Early 1977 CCP employed eight expatriates, of whom three were in the Kinshasa headquarters, three in the northern Maringa sector and two in the Bandundu region. No details are available regarding senior Zairian staff in the Maringa sector, except that the company employs two senior plantation managers - one at Lisafa and the other at Ndeke. CCP's management is the weakest of the four companies. The situation in the field was particularly difficult since the position of expatriate agronomist had been vacant for at least three years. The situation has now improved with the arrival of an agronomist in December 1976; a second expatriate agronomist will be provided for under the Project.

Labor Situation

9. CCP has been seriously constrained in its activities because of insufficient numbers of workers. The problem is a general one for the whole industry but CCP, together with Hevea-Cequa, seems to be in a worse than average position. Deteriorating real wages and social services are the main reasons for lack of interest on the part of the local population to take up employment at the nearby plantations. The company's recent policies with regard to the social services have had an adverse effect; in particular, the sale of the company's supply stores to a local trader was a mistake. CCP tried to alleviate the problem by airlifting 60 workers from Bandundu in mid 1976. This was not successful since about 40 of them have already gone back. A serious recruitment effort need to be undertaken in the Basankusu area itself. According to both the Government's chief representative in Basankusu and the company's plantation management, the local population is large enough to provide the necessary labor. However, wage increases and particularly the improvement of social services are essential. Wages were increased by a first 20% in January 1977 and CCP would improve the social facilities under the Project, particularly housing, schools and stores.

Financial Situation

10. CCP incurred operating losses in 1974 and 1975, mainly due to the low price for palm oil. By December 31, 1975, its accumulated losses of ANNEX 4 Page 4

Z 708,000were more than twice its capital and statutory reserves (Z 323,000). Since, according to the taxation code, losses cannot be offset against income for longer than two years, and since the losses were due to prices which were deliberatelykept low by Governmentpolicy (and which would have wrecked the industry if they had not been raised in 1976), the two year limit should be removed in the case of all three small oil palm companies in the context of the effort to rehabilitatethe industry.

11. CCP, at the end of 1976, had outstandingloans of Z 315,000 from SOFIDE (10.5%)and Z 664,000 (5.25%)from BCZ 1/. A second SOFIDE loan of Z 150,000 (14%) and an EDF loan of Z 350,000 (10%) for rehabilitationwere drawn down in 1977. All of these loans are repayable by 1983. Thus CCP is highly geared, with a 1.5:1 debt equity ratio at 12.31.76 In order to justify including CCP in the Project, its operating prospects and assets should be carefullymonitored.

1/ Banque CommercialeZairoise. ANNEX 4 Page 5

CCP Income Statements (Z'000)

1974 1975 1976

Oil Sales 752 1,230 1,782 Kernel Sales 353 53 134 Increase (Decrease) in Inventories 152 (317) 46

1,257 966 1,962

Production Costs 716 907 1,177 Depreciation 228 211 207 General Expenses 357 352 386 Interest & Financial Charges 101 109 297

1,402 1,579 2,067

Operating Profit (Loss) (145) (613) 105 Sundry Revenue (net) 86 114 117 Loss Brought Forward (150) (209) (708) Accumulated Losses (209) (708) (486)

CCP Balance Sheets (December 31) Z'000:)

1974 1975 1976

Net Fixed Assets 2,041 1,861 1,802 Current Assets - Cash 114 22 42 Debtors 486 469 336 Inventories 794 330 422

1,394 821 800

Less Current Liabilities 1,252 1,225 960 /1

Net Current Assets 142 (406) (160)

Net Assets 2,183 1,455 1,642

Represented by Capital & Statutory Reserves 351 323 323

Revaluation Surplus 924 826 826 Accumulated Losses (353) (708) (486) Net Equity 922 441 663

Medium and Long Term Borrowings 1,261 1,014 979 2,183 1,455 1,642

/1 Including Z 160,000 unpaid social security taxes for the period that the company was Zairianized. ANNEX 5

ZAIRE

OIL PALM PROJECT

OIL PALM RESEARCH IN ZAIRE

Background

1. There is a long history of successful oil palm research in Zaire. The first experimental oil palm plantings were started in the early 1920s. It was soon determined that organized oil palm plantations were more profit- able than the exploitation of palm groves and the first plantation was established at Yangambi in 1922. From 1924 onwards commercial plantations were established using open/pollinated selected tenera seed, which was an advanced practice for that time.

2. The scope of research in Zaire over the years has been wide ranging nevertheless several major research questions have been investigated in considerable depth. Commencing with the breeding and selection work of the 1920s, research workers went on to investigate questions such as land clearing and replanting techniques, oil palm nutrition with emphasis upon foliar analysis and comprehensive fertilizer trials, the economics of fertilizer, pests and diseases, criteria for harvesting, intercropping with cocoa and coffee and other intercrops, and palm oil processing in all its aspects.

3. Most of the oil palm research was located at Yangambi (the major INERA oil palm research station) and at Yaligimba and Binga, the research stations of PLZ.

4. These research stations were well equipped and had adequate funding for their applied research programs. The success of research is evidenced by the fact that by 1958 large oil palm plantations covered about 147,000 ha whereas small estates and small holders owned by Zairians amounted to almost 100,000 ha.

5. Unfortunately the events following independence created conditions unfavorable to research and for several years research work was at a virtual standstill. Recently, however, PLZ and Celza have resumed a limited research program based at Binga. This research program is directed largely by a group of four expatriates--two agronomists, one plant breeder/seed production specialist, and one pathologist.

Research Priorities

6. Research priorities would include the following elements: ANNEX 5 Page 2

Breeding and Selection

(a) program for production of high yielding dura x pisifera crosses

(b) vascular wilt resistance program

Commercial seed productionprogram

(a) seed production and distribution

(b) seed storage and germination research

Agronomic research

(a) nutritionalresearch

i. fertilizer trials

ii. foliar analysis work

(b) cultivationtechniques

Pathology

Extension

Research Proposals

7. The proposed expansion and rehabilitationprogram for the oil palm subsector requires a similar expansion of researchwork commensuratewith the proposed program. It is essentialthat Zairian research personnel be trained in applied oil palm research as a basis for the long-term research program required to service the industry. Accordingly,it is proposed to recruit two additionalexpatriate research workers with long experiencein the oil palm research field to strengthenthe present research team and to assist in providing appropriatetraining for selected Zairian graduates. The cost of this operation is broken down in the table below: ANNEX 5 Page 3

z US$

External Financing

Expatriate personnel (2) for 5 years 520,000 600,000

Research Material 347,000 400,_00

867,000 1,000,000

Local Financing

Salary for 8 Trainees for 5 years 500,000

Social Service Allowances for Trainees (20%) 100,000

Travel Costs for Trainees (10%) 50,000

Housing for 2 Expatriates and 8 Trainees at 30,000 Z (construction) 300,000

Purchase of vehicles at 10,000

5 in Year 1 50,000

5 in Year 4 50,000

Operating Costs for Vehicles

5 vehicles x 1,500/year x 5 years 37,500

Contingencies 212,000

1,300,000 1,500,000

TOTAL 2 167,000 2,500,000 ZAIRE OIL PALU PROJECT PROJET PALM2IER A HUILLE

Susmmary of Project Cost 1/ Sommaire des -O'ts du Projet j/ (z '000) (z '000)

Table/ Foreign Exchange/ Tableau 1978 1979 1980 1981 1982 1978-82 Devises % z'ooo

PLZ Base Cost 2,3,4,8 5,030 2,540 3,469 5,090 3,472 19,601 56 10,932 PLZ CoÛt de base Physical Contingency 503 254 347 509 347 1,960 56 1,093 Imprévu quantités Price Contingency 94 962 1 648 2 852 2 593 8,959 32 2,875 Imprévu prix Total Cost 6,437 3,756 56 ,451 30,520 7 14,900 CoCt total

Busira Base Cost 5 280 252 285 280 110 1,207 38 457 Busira Coit de base lPhysical Contingency 28 25 29 28 il 121 38 47 Imprévu quantités Price Contingency 60 103 150 19 100 611 17 102 Imprévu prix Total Cost 3 3É 467 506 221 1,939 31 Co6t total

CCP Base Cost 7 522 593 476 510 217 2,318 38 870 CCP Coàt de base Physical Contingency 52 59 48 51 22 232 38 88 Imprévu quantites Price Contingency 105 246 269 365 183 1i168 16 190 Imprévu prix Total Cost ___ 793 926 2 3, 31 1,148 Cout total

Total Base Cost (Companies) 5,832 3,385 4,230 5,880 3,799 23,126 53 12,259 Total CoIt de base (Sociétes) Physical Contingency 583 338 424 588 2 380 2,313 53 1,228 Imprévu, pri Price Contingency 1.069 1,311 2,067 3.415 .876 10Z738 29 3.167 Cott projet (Societes) Project Cost (Companies) 7,484 5.034 6,721 9,883 7,055 36,177 46 16,654 Assistance Technique et Travailleurs Technical Assistance, Smallholder Studies and Pilot Schemes 988 989 988 989 989 4,943 64 3.165 Coût Total du Projet To-talProject Cost 8,472 6,023 7,i09 10,872 8,044 41,120 48 19,819 i/ Excluding Import Duties, inciuding other taxes Droits de douane exclus, autres taxes inclues.

February 1978 fevrier 1978

-3 > C1Hue OIL PALM FROJECT PROJET PALOIER A HOULE

Poojeet Base eCst: PIZ, Lo}utu Coût _d Base du Projet: iOsZaIres PLZ. Lokutu !jeuCaltes ) cr3

1978 1979 1980 1981 198i I078-80 F UOit C00t/ rTiuber/ Cs-t/ Number/ osCt/ Number/ C0st/ Nmb-er/ CGut1 Prix Un1t. Nuuber/ Cost/ Totai Coct/ Ecbssge/ Impurt Dutle:/ bRrr Lombre CoAt Nombre Coût Nombre Coût Nombre Coût Caxs Nombre Coût Coût Total Devises Droits du Autres T-mes 58 Douanes _ Labor 93,460 157,B40 Fertilizer 222,960 283,480 282,340 & Chbei-als 57,022 118,360 sas d'Ouvre 201,452 297,752 311,530 8H etmeT 6I5J0,9- Egr-is B: Produits Chimiqaes 'erbsieedperutons IOrs-p-rt 68,350 78,650 78,4oo0 38490 80,49D 68,900 ûi,9oo 71,360 38,4097 50 5 Autres Oaote--s de Pr-ducti-n 6o 25 Tr--v Mssoisée etLrepr Oui-b'Octal 076,97 2 413,450 569,962 730,992 657,560 2,648,HH0 Doue-aots1 6taff Sopatrlste Persuereel Agrone.lit 70,000 1 70,000 35 ErpOscoatr3i 1 70,000 T 70, OH 1 70,000 1 70,000 Die-el Oogi-e S-ve"ist 70,00 1 70,000 Agronomiste 1 70,000 0 1 70,000 1 70,000 Building .Opevlaliet 70,000 1 Dieseliete 70,000 1 70,000 1 70,000 1 70,00 1 Osirien 70,000 Co-struoteur Planltation iDv. Chisf 7,500 1 7,500 Zairois 1 7,500 2 1,500 2 15,000 3 2,250 Pl-ntati- S-etien Chier 3,500 1 3,500 Chef de Division, 2 7,000 3 10,500 4 14,000 5 17,500 Plantation C`hef de Se-tios, Plaattiu 602b-00050 2el,000 224,5oo 235,500 239,000 P50,000 1,170,000 Omes-Cetal

Rouses Bâtiments 37 Workers 1,700 1P5 212,500 Meteena: 125 212,500 125 212,500 125 212,500 125 212,500 Serties Chief 6,oo0 20 120,000 10 Ouvriers Divleion ChieC 60, 0o 5 30,000 H 8,ooo 1 6,ooo 8,000 6 iH,ooo 8 48,ooû 2 16,000 chef dO S-etie HsltA Ceoter 1,450 1 1,450o 1 1,450 O 1,4c 1 1,450 1 1,450 Chef de H)ieisiOe SIpply ôtore 3,000 OtepenOrs 1 3,000 1 3,00D 1 3,000 1 OScool 2,000 3,000 1 3,000 1 2,000 1 2,00 O 0,00 L o,000 Cantine Worlcers' 0C00 8,000 1 8,oO 1 2,700 Eoule CommlmityCenter 12,000 1 12,0D0 1 12,000 Cercle Foyer Social Sub-Totil 406,95o 338,950 p28490o 224,970 224,95o 1i,60,750 1 Sous-Total esebinero& 08100 es rvOodeeso OebhinesAgricoles et Vehitenle 300 HP 190,000 1 090, 000 80 15 Boldoser 140o15o hP 9°0,00 2 180,000 300 CV Roter Gr-der 14o-150 eV 120-150 HP 60,000 1 60,0o0 oiveocuse15 4h-5o HP 20,000 1 20,000 120-150 CV Front Leader (80-100 HP) 38,000 1 38,000 40-50 CV Tipper Truek (6 ton) 33,000 6 198,000 80 15 Chicgnet (80-100 Plat Cruel 2 6,oo CV) oo,ooo 2 6o,ooo 65 20 Camioa B.ene (6 tnm) Tlact- (70-80 HP) 16°'°°° 604.oo 65 20 fanion TOOsl.r 5,000 3 05,000 6 20 Tracteur (70-80 CV) Personnel Vehicis -a DiheelOrios) 15,000 65 20 3 45.o0 3 45,ooo ReM- enterepeles 1,100 2 50 40 Vehi-ules (traction 2,200 1 1,100 4 4,400 2 2,200 6 independente) 6,600 65 25) Mot-yelete- bub-Total 856,200 1,100 4,4o0 113,200 6,600 981,500 011 6fLC u0pmeut u oune-Tetal eMn:,est - .Cnh -'UroVw 67'000 Eeitsent!e ~ 225,000 650,ooo 1,300,000 650,000 3,500,000 Onller1es g/ Oranuepuet Oureps_!lnts8i D07,0O7 100 Equ,peaent fob furope 35,00D 50O,OOO '00,057 100,000 Improt Dutirs 270,000 535,007 000 Trls.p. rt Evrope-Mattdi 90,000 250,000 500,000 250,000 I,36o,00o Craeeovrt v/mtsll-.ote 275,000 100 Droits d'Ipmpottion 65,00O 200,000 400,000 200,000 Civil Auraiksud Ere-tion 250,000 1,070,000 60 25 Transport Matadi-Site 85,00o 200,000 4oc,ooo 100,000 1,135,000 Engt-eerisg / 52,000 50 TravauF Civiles et 18,700 50,000 100,000 50,000 Montage 270,000 100 0niè Ciuil / Oui-Tetaî 1,552,000 518,000 1,450,000 2,90d,000 1,450,000 7,870,000 Sus_-Tetal Staff OVeieLe's bue,,lrs Ceeu 7,344 7,416 7,560 7,637 7,776 37,728 60 25 F`rais de P'onctionnement, TramsmPrt du Persesael 72701LHsniuHidig ImpuroPrtDues 3,320,416 1,503,416 2,532,372 4,215,771, 2,596,886 o4,o68,864 TOTALy C mpris ouuert Dutie Droit_ ù_ Do___ 0416,35o 90,277 256,10o 731,750 251,650 1,546,125 Droits ds DEua-es Race Cei Nt Dctiso4,s900,766 2pr i413s,141 r2,76,070 2,684,o00,353,736 12,822,739 Coit de Rasa e le deDris de Dpuape R/Detailed unit lestsper On are ot Appendix 1 of this Aines e p 1978-79 Luksumete mill 1980-82: Lqkute mili ûta D ld 3/ 4.256 Of buse c.ut, e-eludiug unes 1 97»-79 Huiieris Lukmlt; 190121 tu Iler-ie Lkbutu1 3/ I:.o5 du voit de base, taxes a.n-co.pris JCly 1977 juillet 1977 ZAIRE

OIL PAIX PPOJECT 175111 1AL:.1IER A r lLE

Prajeet Base Cost: PLZ, YCligihma Co6t de Base de Projet BLC Oaîigloba

1978 1979 1980 1981 198 1978-82 TOreio Ceport taties/

Uait Cost/ Nuaber/ Cost/ .Ooeber/ Coet/ Ooaber/ Cost/ NBober/ Cos.St Nlber/o Coet/ Total Cost/ Coaage/ Droita de ther T-ese Prie UTit Noabre Coût Noobre Coùt Nombre Coût Nombre Coût Nombre CoCt Coût Total Deises Dooaaee A0,tree T.aea

Plastiso 1/ Plastatioo 1/ Polo d'OuYre L.bor 48,9o9 lo0,4oo 154,000 202,400 204;800 Fertilieer& Cthost-al 32,:400 8o,4oo i54.46oc 239,000 281,ooo Bo LoigeaIset%rduis Chimiqoce Oter Capots 47,6000 66,4oo 74,200 8o,200 î1,800 50 5 Aotre Faote.ra de Peodutiss Ceolaoieed Oprotios h Traosport 47,60e 8o,ooo 85,40D 87,40o 14,6oo 60 25 Traoaoo ecoanted et Tas-p-et

Sob-Total 190,800 331,200 468,2o0 609,000 522,200 2, 11,400 Sous._Ttel

Staff Persososi Expatr ié Exprate 35 50 Agresai ste Agroaooist 70,000 1 70.000 1 70,000 1 70,000 1 70,000 1 70,000 Dieseliste Diesel Engioe pe-isliot 70,000 1 70,000 1 70,000 1 70,000 1 70,000 1 70,000

otr Boilding Epeoialiet 7,500 1 7,500 1 7,500 1 7,500 1 7,500 1 7,500 Coas..t Plastatisa Olieisi Chief 7,500 1 7,500 1 7,500 1 7,500 e Chef de Section Pla-tatioo Se-tios Chief 3,500 1 3,500 2 7,000 3 10,500 4 14,ooo 5 17,500

sos_-T.tal Sob-Total 151,000 154,50o 165,500 169,000 172,500 812,500

Btti=eats ConstrUotion 35 Eouses BJaissas Workeors SOorises s-eoole- ROeabilitatio1 17U00 100 170,000 ?0 153,000 90 153,000 30 51,000 30 51,000 ROebailitstioa Sco 000 i6o,o PO 6,ooo200 160,000 200 i îooo6o,ooo10 P00 î.6o,eoo Pehbtilitatiea Chef de Dirision Division Chiei' o10,0o 1 10,000 Cadre Supérieur Manageao lt RehabilitAtio Rehab litatio- 10,000 2 00,000 Otorage oit 00.00 I 20,000 esgaste Offioe Spots Bureau Boa 6,000 1 6,o000 nef Oehebilitatio- 3,000 1 3,000 Rehabilitatipa

08,u-Total 386,ooo 316,0oo 313,000 211,000 011,000 1,437,000 Sois-Total OoaeyIHbIesc Mashia.eAgrisalea et Vhejolea RoIdoser 80 15 Bolldozer 300 RP 190,000 1 190,000 1 190,000 300 CV 140-150HP 99,000 O 90,000 14o-150 Cv ,otor lader1 80 15 Ni-ele.se 120-150 CV 120-170 HP 60,ooo 1 6o,000 4o-5o CV 4o-50 HP 20,000 1 ?0,000 1 20,000 Froot Co-der (80-100 HP) 38,0oo 1 38,000 80 15 Chargeor (80-100 Cv) Cotter Rot-ry Ctter 2,000 1 20,000 2000 80 15 Potary Tipper Truck (6 too) 33,000 2 66,ooo 1 33,000 1 33,000 1 33,000 65 20 Cesisa Pesas (6 ton) 70-80 CV Traotor 70-80 HP 16.oo0 2 32,000 85 T-cteor Remorque Trailer 5,000 2 10,000 65 20 Pereosonl "ehicles (4-ohesl druie) 15,000 3 45,0o0 1 15,000 1 15,000 50 40 Vehieules (Tra-tioa Indepeadente) tdotoroyeles 1,100 1 1,100 1 1,100 2 2,200 2 0,200 3 3,300 65 25 Motocyclettes Flectric Ose.erator 8,ooo 1 8,ooo 65 20 Groope Eleotrogeae

Tub-Cotat 518,100 65,100 50,200 P4?20oo 36,300 911,900 S000-Total

Rartorp F.quipment BouipemeE t d'Vsiaes Pqoipoe-t 342,000 73 23 Eqoipement CosatrUction et Ieetallatioa Civil Works asd tre-tio 38,000 50

Cil-Tota1 380,000 380,000 Sous-Total

Staff Vehiele.s Hunnng Coot 7,272 7,344 9,816 5,o88 5,16o 34,680 60 25 Fraie de Fontonnement, Trartepset do PerasoneI

Drsit de Doueo e TOTAL including Ioport Duties ,633,172 874,].44 1,006,716 1,236,288 947,160 5,697,480 TOTAL y Compris

Iowort Soties 92,775 5,575 13,150 41,950 7,425 160,875 Droits de Douen

Pose Cost Set of Import Polies 1,540,397 868,569 993,566 1,194,338 939,735 5,536,605 Coût de Base Net de Dreita de Doaaue

-site aoaeoe. tltaled unit oosts per ha are et Appendie 1 of thie Annex. 3/ Pour le oûÙto italres dûtaillés par ha roir lappeadios 1 de o.

1977 JuLy 1977 juillet ZA]RE

OIL PALFMPROJECT PROJET PALMIER A hUILE

ProJect Rase Coot_ PLZ, RateRa Coût de RAse du ProJet: PLZC BoteRa (ia Calres) (en ZaIras)

1978 1979 1980 1981 1982 1978-82 Fîrlga Csport Dotles/ ClUt Coot/ Nub-er/ Cast/ Ioaber/ Cost/ Number/ Cost/ NuAber/ Co-t/ Nbaier/ Coat/ Total Cost/ Eocîsaae/ Droits de Other Taxes/ Pria Coit. Notbre Coût Nombre Coût Nombra Coût Nosbre Coût Noîbre Coût Coût Tîtal Ptvises Cosaca Autrea Taxes _ _u _ _ _ _ T°W

Pl'Aatiag j Platation LAbor 32,730 46,ooo 53,670 55,330 44,o6. Mais d'Oure Fertiliser & Chemîrals 6,o6o 11,130 17,710 31,60o 38,080 ûo EngrIsi & Prodoits Chimiques Otler InpPts 11,730 13,930 15,200 16,100 5,050 50 5 AutreaP F-teora de Pr-d-,tia MeRhanized Operatioaa & Transport 2,390 14,100 7,400 2,6oo 2,100 60 25 Traraom Meca-iaêe et Traaepart

Sub-Total 62,910 85,160 93,983 c05,630 89,290 436,970 Cous-Total

Staff P-roosane

Plantation Division Chif 7,500 1 7,500 1 7,500 1 7,500 1 7,500 Chef de Divisia=, Plaotatie Plzatati-o SCetian Chisf 3,500 3,500 1 3,500 1 3,500 1 3,500 Chef de S-tias, Plaatation

Cob-Total 7,500 11,000 11,000 11,000 3,500 44,0oo Soua-Total

Constroation 35 B&Le3tiats Coassa Masirson Idorlars 2,00o 40 80,000 38 76,ooo o-vrier- Sectior Coiefa 4,(o1o 1 4,ooo Chefa de Se-tia HjaîtI Ce-ter 1,450 1 1,450 Dispa.s.ir- Sapply Stars 6,65o 1 6,65o Cartina School 2,000 1 2,000 E-le Office Space 1,450 1 1,450 Bureau

Sob-Total 95,550 76,000 171,550 Cous-Total

Maîlas arysndVbhialas Moalhîea Agricales et Oshirole- Tipper Trocksa(6 taa) 33,000 2 66,0o0 65 20 Cam_io Rasas (6 tan) Tr-otar (70-80 HP) 16,000 1 16,ooo 85 Tracteur (79-8O CV) T-iler 5,000 1 5,000 65 PO Osoorqor Persoannl Relahies (4-h-el drive) 15,000 1 15,000 1 15,000 50 40 Vohi-ulas (tra itioaindepeadmnte) Ratorayobas 1,100 1 1,100 1 1,100 65 25 Motooyolattas

Sob-Total 102,000 1,100 i6,ioo 119,200 Sous-Ttala

Staff Velhiles Ronning Cuit 2,400 0,472 2,472 2,472 2,472 12,289 60 25 F-rai de F notiaaxsasaî, Transaprt d, Cersoal

TOTAL I-cluding Iaport Duties ?70,36o 175,732 1c7,452 135,202 95,262 784,oo9 TOTAL y ComprLs Droits dO Douars

I=ponr Ctisa 20,200 275 6,275 26,750 Droits de Do.a-es -iv

Osas lait lai of Import Outesa s250,160 175,457 107,452 128,927 95,262 757,259 Coût do B.ae NEt de Droits de D-oaoe - ~~ ~ ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~oo l/ Oetailsd upit -osts per ha ara ot Appeadia I of this An-ex j Pour ir coûta loitaires MtsllL,s par hs voir I'appedice 1 de cette

.T,,lv l07T juillet 1977 OIL PAIX PHOJECT 11,02lIAUIER .O T11CI,r

Ciraleai Base Tasr Pasirc-imer,i Cout de Base du Praet: Ousra-Leacii

1978 1979 1980 1981 1982 1978-82

Ptier Taes/ lilit Cact/ Nab.erl Cest/ Nvbaer/ Cect/ Number/ Cast/ Nm,ber/ Cot/ Nvbaser/ Cost/ Tatal Cost/ Banisage! Braits re CTat Noabre Caût Nambre Coû Nambre Cait Nambre Coût a tal Devises Duanes Antres nTses Prix lait' Nombre 9 ~~_ _ _ i ___ ttian Ch PNa-t Plasties j aMie Labac 37,600 53,800 72,500 86,4oo 70,200 dOiare 1,600 7,600 11,200 19,200 24,000 3 Pagrais et Produia Chimiques Fertilizer & Chesicale 5 Outres Peatears de Pradaction Other Tnut2,oo2,602845 Tapais o5,600 o6,ioo:8oo 17,30068oo 03,400 4,ooa4000 605 25 Crccaae isesacicéset Crasapari(o lceoiaaieedOperetians & oranapars o,OOO 6,800 6,S00 6,800 1,60

2 t-Cotai 70,800 98,000 118,100 14o,8oo 99,800 527,500 ST-s-Tatal PersoAaei Staff CaBrai a CeIrisa Piaetatiin Setian Chief 3,500 1 3,500 I 3,500 1 3,500 i 3,500 i 3,500 Clef de OSetian, Picastian uBa-taisi 3,500 3,500 3,500 3,510 3,500 17,500 Sous-Ttetl

Construct ion 35aniacats

Wolkers 2,000 50 100,000 50 100,000 50 000,000 50 1BO,Ct mentriers Diesiaa Chief 8,ooo 1 0,00 Chef de Divisioa Hesthi Tenter 1,450 1 1,450 Dispeasaire Supply 6tore 3,000 1 3,000 Cantine Ochol- 2 000 1 0,300 DEipo Office 7aas 450o1 1 1,450 Earexa

Sai-Catai 106,45o 109,450 1i),o 000 10,000 B15,90- Osas-ratai hisaiiaca Agrisaies ai Vjehicales Paehiaery &OVesiicîs ,o0 1 33,000 65 2aaiaa Banc (6 tan) Tippe7r-V HP 33 raicAtr 7o-Bo CV 16oo00 1 16,ooo 1 16, oo0 65 T_astas 70-30 HP 3eorqiue 2,000 4 8,ooo 4 3,300 b5 20 IrAiler 4 Vehiui-e-l (tractian8 idepeadentei PeccoaselVehacle ( -wheel Orice) 15,000 1 15,000 1 05,000 50 65 25 Matoayalettes aatorxcyses 1,100 1 i,iO 1 1,100 Ssans-aist 5ub-Tatsl 65,loo 24,000 24,100 113,200 .5 Prais da P tiseiiaa7emest7TrensP7 Perrsonel f V=hicales oRunaingTaCt 7,472 2,472 2,472 2,472 2,47. 12,360 60 25 80 PngrAis paursse6e9as Plas1tati6as Baieteice Pertiliser foar Existing YouPg Pianiatiss 14,060 39,020 39,rPAO 16,600 4,265 142,965 (1000 bal (l107 bal (1107hA) (471 ha) (121 ha) e 00TALInclvsdieg Tmpart Laties 292,382 252,442 037,092 237,472 110,037 1,229,425 COTAL aenis Draits de BoAn TroAit de DouApe n|x Impect Lutiles 12,875 1,875 7,600 275 22,625 Tait de Bse liaide Braits de oaaaDe Base Tost Nct 0fImpart mutesa 279,507 052,442 285,217 279,872 00.762 1,206,800

Desrcooed~ ~ bsAnePaar aais~ ~cosia ~~ ~ ~~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~1Pe aacc pede5t les aaûts unaitaires ddtailiée par ha tair l ppandice i rie Detlild1977 costleep7 h) A t App-djx 1 to this A- ct APPexe t

ruly 1977 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~juillet1977 UIL PALI PROJECT PRO=JT PALlIEE A hiLE0D

Pro jcu 9nase Cir5e CCP Coût de Nase deuiPrje:e CCI> |nF

1978 1979 1999 £981 1982 1978-82 Poreigo Imporet nDies/ (luit Cost/ Nvcber/ Cost/ Ncb.er/ -ust/ sualbr! C0Costm r t/ Number/ Cos Total Coset/ Txhnae/ DroNt, de Other Oces/ Prie l!nit. Nombre Coût Nombre Coût Nombre Coït Nombre Coût NTmbre Cet Coût Total Deries ousaeA s ______- _ % 6 Pîootbog 5/ 1 Plnsotaîbe Cab ortili z e r & C h e mica 3 1 ,0 45 7 1 ,4 6 5 t 12 1 ,6 7 0 1 6 3,62 0 9 99red4i ,423 8a0m n.6d Perotîleer A Ourl 9,120 11,751 a6 27,585 57,q47 62,4i0 9o EOgraïa et Pro,dolta Uhiaiqoas Coter boots 30,990 29,090 46 825 59 975 7,575 5° 5 Nartatirese Speratbome t fransoort Aotres Faeteurs de Prodoctiîs 0,000 1,325 1,250 2,000 2,500 6, 25 Trave x ramlaéaet Transport olub-Total 72,115 113,159 197,330 276,535 191,905 791,040 S00eTotal SIsEf Erpetriste Persoanel 35 50 Expetrié Agrsnooo:st 70,000 1 70,000 1 70,0O0 1 70,000 1 70,000 Agroos

Plamtatou Sectior Chief 3,500 1 3,500 1 3,500 2 7,000 2 7,000 Chef de Seotisa, Plattisa

SuN-Total 73,500 73,500 77,000 77,000 301,000 Sos-Total Crortruef loin 35 Nâiitsrnt Workers Oceelers New 7,000 35 70 000 50 1000000 65 130,000 Neuf Behehbliteti-o 800 300 2bo,000 000 24O0o0o 100 80,000 PRahbilitati.. M niioChef 6,000 1 6,000 1 6,000 Nauteemeot 1 00,000 Chef de DivtiNsi ~~~~~~~~00,000 Cadre- pei Heciah C-eter 1,500 1 1 ,500 DîSp-es-ire School 2,000 1 2,000 Ebale horkb Ip (PsibNtsuNom) 10,000 1 10,000 Atelier (ReNhbilitatita) Sterige 0,,e 15 000 O 500o0wntrepôt OINTe~.sSp-o 100000 1 10,000 parem Supply Store 6,000 1 6,000 Mcgmeoi

Sut-Total 276,0 0 350,000 180,000 130,000 936,000 Socs-Tatli 5ejc94aepr & Vedc2ee Mechine i Agricolesi et V edeculee Motrorarederh40-50 HP 20,000 5 i 20,000 80 15 FPlt Tr-ik 30,0'° Niveleuse (40-50 Tii 2 60,000 65 Tctr70-00 017 16,000 2 32,000 20 Cmba 85 Tral.o per-onnel Vehlele (4-wheel di-e) 15,000 2 30,000 1 15,000 2 30,000 50 40 Vehi-uSe (tr-tio iNMdepe-de-te) Motorcrcles 1,100 1 1,100 1 1,1000 T 2,20 1 1,100 65 25 Motocycleutes

ul-TotO îî142,000 16,100 1,100 31,100 1,100 191,400 Socs-Total StaLff orborle Hunning Cost 4,800 7,272 7,344 7,344 o,o44 34,104 6o O5 Fraîs ded Peettaae4eo77t, Tr44S4l. Hersoa5F

Fertiliser for EsîSting You-g Pianteti-on 57; H7 39,216 i9,426 113,348 80 E-ras. panr Jleues Pîa-tati-es (671 Os) (456 l-a) (191 Hs) Eaistsatss

TOTNALcluding ImPort Luties 552,62I 599,243 475,700 521,979 217,349 2,396,892 TOTAL y Compris Droits de DPue TFope Dutiea 30,275 6,275 275 12,275 275 49,375 Droits de DPouae Nase Cost Net oC Impore outles 102,346 D92,969 475,405 509,704 0'1,974 2,317,517 Coût de Naa NPet de -oite de DPanaa

DDetelIed unit -eeod per h s are at App codix 1 tl this A co P ur les o ûts u-tîmrest/ d éts Ol de pal voir la ppe mdice 1 de

July 1977 juillet 1977 AIRE

OIL PALM P30JLCl' PROJEI PALMIER A hUILE

Projeot Base Cost: Management and TIehaical T-rinimg Colt de Base du Projet Stages et Foma-tiob

1978 1979 1980 1981 1982 1978-82 Foreign Impact Duaties/ U Cost/eIt Iltiber/ Cost/ Namber/ Co-t/ Nober/ Cost/ NRbaer/ Cost/ N-b-r/ Cost/ Total Clst/ E-ehamge/ Droits de Other T-xes! prim lanit. Nombre Colt Nombre Coût N-ombr- Ct Noabre Colt Nombre CoAt CoAt Totai Disos, Douanes Autres Tnxe

mamaiuemet stagesSlrsisiog dA Geti-on

SubsIstance nC-t for Trîinses 1,200 10 12,000 10 12,000 10 12,000 10 12,000 Indsemité pour Stagiaires

C-ont-uoti-n 10,000 10 100,000 35 bâtimasts

Mator-ynles 1,100 10 11,000 10 11,000 13 11,000 70 20 M=tocyclettes

Motoroyples R...iog lest 720 720 720 720 720 o 25 -rail de POnotlonasmeon, aMpolcles

Sub-Total 123,720 20,720 23,720 12,720 23,720 i96,600 Sema-Total

Technical Tmainimo Stages Technique

Ceat.re-ti-n 35 Rûtiseots

Do mittay 10,000 1 10,000 Dortoir Cl -ssream 1,000 6 6,oOo Salle de Classe Equip-ent 160,000 70 20 Equipesent

Staff EDpatriats 70,000 1 70,000 1 70,000 1 70,010 1 70,000 1 70,000 35 5N Personnel Espatrlé

Oul-lotal 246,0oo 70,000 70,000 00,000 70,009 526,000 Seme-Total TOTALOoluldino Import Duties 369,720 82,720 93,720 81,020 93,720 722,600 TOTAL y Coapris Droits As Dansas

Import Duties 34,200 2,200 0,103 3j,600 Droits dA D.o.se

Rase Cost Net of Import Duties 335,52O ô2,720 91,520 82,720 91,520 684,o0o Colt As R ea de Droits dA Do-ae

July 1977 juillet 1977 CA L ' O.IL PAMMPRECT PROpRJETPALMIER A IIUILE

Eetabliîhbeot CPot per ha Cc18t d'établissement par ha c (la Paires) teh {aarea) .

C.C.P. Year/ Boteka Boteka Lokutu Lokutu Yaligloba Brsira- Lom-mi C.C.P. Replaating Exteasisa / RPplrating Replantiag Replantine Exteasion eyploatiarg EPtensona Maaual/ Année Replratatioa Eotension Mana-l/ Mechanized/ Meehani-ed/ Manual/ Manual/ Manel Mecaais MeMecanisée Manuel Manuel Meauel A PLANTR, 1978-1982 (ha) 350 580 2,o4o 2,980 4,300 '00 265 1,150 SURFACE ARiA TO BE PLANTED, 1978-1982 FRAIS MNAN-0'OEri.RE LABOlEREXPENSES 38 Pépiaière -1 16 16 i6 i6 16 10 38 N-rsery 175 Préparatioa terrain -1 31 70 36 12 8 86 55 Laad elearing and Pr-paratioa 7 0 24 Bo 31 18 18 94 7 12 10 10 Plantation Planting o 10 15 13 13 13 36 1h 14 Maintien d.a pl-atatihea Plantsti.oa 0 35 14 35 35 35 Maintenarce 46 1 48 52 60 60 48 66 46 46 2 48 53 60 60 48 67 46 3 48 43 56 56 44 68 46 46 20 -- 4o Routes Roads -1 8 ------2 -- 0 2 6 5 4 2 2 -- 2 1 2 2 2 2 2 2 2 2 2 3 2 2 2 2 2 2 2 3 2 4 2 2 2 2 2 24o 467 268 428 Total Main-d'Oeure Total Labour 276 358 318 280

FRAIS AUTREE 91F MAIN-D'OEUVRE nNOI-IABOPE YPFENSES 92 84 84 Graines Sesds -I 16 i6 16 16 16 28 20 20 Autres Coûts P,pinière Other Nursery Coste -O 36 36 36 36 36 -- -- Equipoeaet L-od Heavy EqadpF,,t for -I -- 48 -- 50 74 26 Land Clearing and Ra.de 0 1 -- i 8 --

2 __ __ 3 -- __ Transport Trasaport -I1------0 9 25 30 30 9 B 5 5 I 2 -_ __ __ 2 22 ______2 3 2 -_ __ __ 2 8 Cagrala eerthlleers -1 12 12 12 12 12 -- 8 0 h3 1h 56 56 43 16 35 35 1 56 22 h8 h8 56 24 53 22 P 8h 30 3h 8h 8h 32 30 23 3 8h hé 84 8h 8h h8 88 hh __ __ Autres Frodrita Phiolques 011cr Chamiral Froduots -O ------__ -- 0 14 12 10 10 1h __ PMg PM 1 5 5 30 10 6 __ 6 6 2 6 5 1~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2110 10 6 -- 6 6 3 6 5 10 10 6 __ 6 6

Petit outillage louis -I 5 h 3 3 -- 4 3 3 o 6 6 6 6 1]4 6 6 1 6 5 5 5 6 h 5 5 5 5 6 4 5 5 26 5 0~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ere 197803098 3 6 5s 5 6 4 5 5 3ro Coe Cover CroF 0 4 s 4 h h h 292 Total dcc Coûta Autres que Total Boa-Labour h10 306 445 h99 485 298 428 Mais -dA Oeuvre

720 POUT TOPAL. TOPAI COST 686 664 763 779 725 765 696

o T/ Depreciation ef heavy equipmeat aad îraaeport art ancluded 1/ Proie d'aaoralesaoaa éqTirpmsai lourd et îrrasnpra non-eoapris

Fehroary 1978fusr ii ANNUEX6 ANNEX 6 Appendice 2 Appendix 2

ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Plantation Maintenance Cost per Hectare Coût de la Maintien des Plantations par Hectare (in Zaires) (en Zaires)

YEAR/ Année PLANTATION 4 5 6 7 8 8 10 il 12-19 20-24 PLANTATION

BUSIRA-LOMAMI BUSIRA LOMAMI

Labor Expenses Coût de main d'ouvre Maintenance of Plantation 23 23 19 19 19 19 19 19 20 23 Maintien plantations Maintenance of Roads 5 5 5 5 5 5 5 5 5 5 Maintien routes Harvesting & Transport of fruits 19 24 24 25 25 25 25 25 27 30 Recolte et transport Other Operations 10 10 10 10 10 10 10 10 10 10 Autres operations

Non Labor Expenses Coûts autres que main d'ouvre Fertilizer 49 49 49 49 49 49 49 49 49 - Engrais Chemicals - - 5 5 5 5 5 5 5 5 Autres produits chimiques Transport 15 22 30 30 35 35 35 35 35 30 Transport Heavy Equipment - - - - _ _ - _ _ _ Equipement lourd Tools 6 6 6 6 6 6 6 6 6 6 Outillage

CCP CCP Coût de main d'ouvre Labor Expenses M`4aintenance ot Plantation 25 22 22 22 22 22 22 22 22 22 Maintien plantations Maintenace of Roads 5 5 5 5 5 5 5 5 5 5 Maintien routes Harvesting & Transport of Fruit 17 22 22 23 23 23 23 23 22 22 Récolte et transport Other Operations 10 10 10 10 10 10 10 10 10 10 Autres operations

Non Labor Expenses Coûts autres que main d'ouvre Fertilizer 51 51 51 51 51 51 51 51 51 51 Engrais Chemicals 6 6 6 6 6 6 6 6 6 6 Autres produits chimiques Transport 8 12 12 13 13 13 13 13 6 6 Transport Heavy Equipment 3 3 13 3 3 3 3 3 3 3 Equipement lourd To.ls S S S S 5 5 5 5 5 5 Outillage

LOLTITU LOKUTU Labor Expenses Coût de main d'ouvre Maintenace ot Plantation 30 28 27 27 27 27 27 27 27 27 Maintien plantations Maintenance of Roads 3 3 3 3 3 3 3 3 3 3 Maintien routes Harvesting & Transport of Roads 19 21 22 22 22 22 22 22 22 25 Récolte et transport Other Operations 10 10 10 10 10 10 10 10 10 10 Autres operations Non Labor Expenses Coûts autres que main d'ouvre Fertilizer 52 52 52 52 52 37 37 37 6 - Engrais Chemicals 5 5 5 5 5 5 5 5 5 5 Autres produits chimiques Transport 14 17 18 21 23 23 23 23 18 18 Transport beavy Equipaentnt 4 t 4 4 4 t Euipersnt t TooEKiSq t 4 444Outillage LabOEKA BOTEKA Labor Expenses Coût de main d'ouvre Maintenance ut Plantations 30 30 30 30 30 30 30 30 30 30 Maintien plantations Maintenance of Roads 2 2 2 2 2 2 2 2 2 2 Maintien routes Harvesting & Transport of Fruit 16 18 20 21 21 21 21 21 21 25 Récolte et transport Other Operations 10 10 10 10 10 10 10 10 10 10 Autres operations Non Labor Expenses Coût autres que main d'ouvre Fertilizer 84 46 46 46 46 46 30 30 30 - Engrais Chemicals 5 5 5 S S 5 5 5 S $ Autres produits chimiques Transport 14 14 14 14 14 14 14 14 14 14 Transport Heavy Equipment 3 3 3 3 3 3 3 3 3 3 Equipement Tools 5 5 5 5 5 5 5 5 S 5 Outillage

YALIGIMBA YALIGIMBA Coût de main d'ouvre Labor Expenses Maintenance nf Plantation 25 25 23 22 22 22 22 22 22 22 Maintien plantations 4laintenance of Roads 3 2 2 2 2 2 2 2 2 2 Maintien routes Harvesting & Transport of Fruit 18 19 21 21 21 21 21 21 21 25 Récolte et transport Other Operations 10 10 10 10 10 10 10 10 10 10 Autres operations

Non Labor Expenses Coûts autres que main d'ouvre Fertilizer 84 46 46 46 46 46 30 30 30 - Engrais Chemicals 4 4 4 4 4 4 4 4 4 4 Autres produits chimiques Transport 14 14 14 14 14 14 14 14 14 14 Transport Heavy Equipment 3 3 3 3 3 3 3 3 3 3 Equipement Tools S S S S 5 5 5 5 5 5 Outillage

February 1978 fevrier 1978 ANNEX 7

ZAIRE

OIL PALM PROJECT

Financial Projections of the Companies

1. Financial projections were prepared by the mission on the basis of available information. Production tonnage and acreage estimates of palm oil plantations from 1977 to 1987 are those agreed by the mission and the companies. Project costs and non-project investments were also calculated by the mission. The projections are in constant mid-1977 Zaires, with the exception that the Project costs take into account price escala- tion (Tables 1-4 of this Annex).

2. PLZ provided complete financial projections and cost statistics, including the 1976 financial statements and balance sheet. Busira Lomami which had been merged upon Zairianization with Hevea Cequa, did not have separate accounts for 1975. Projections for the three smaller companies were prepared`-by the mission and agreed to by the parent companies.

3. The financial situation at the beginning of 1977 was quite reasonable for PLZ, which has no loans outstanding and whose plantations and installations have been well maintained; PLZ also had some 4 million Zaires in its treasury. Busira Lomami had its working capital and treasury depleted while part of ENTRIAC and were not given back the assets which ENTRIAC acquired with these funds. It therefore had recourse to short- and medium-term bank loans. Busira's overdraft should be cleared up in the course of 1977. For CPP, with accumulated operating losses of 0.5 million Zaires and a debt equity ratio of about 60:40 1/ the financial situation at the beginning of 1976 is not good. However, in view of high coffee prices and of the recent increase of the local price of palm oil, prospects for three of the companies are encouraging.

4. The two smaller companies have obtained bank loans in foreign exchange (provided by EDF) in order to purchase spare parts, vehicles and equipment to restore their installations to reasonable working condition. These borrowings are shown in the 1977 column of the tables for the respective companies.

5. The companies are expected to self-finance about 50% of their overall 1977-82 investments (including non-Project investment), with the exception CCP which is expected to finance about 40% of its investments. This appears to be a reasonable proportion in view of the considerable amount of rehabilitation involved.

1/ Before taking into account a second SOFIDE loan which CCP obtained in 1977. ANNEX 7 Page 2

6. Given the companies' need to finance some immediate rehabilitation as well as continuing capital expenditure,including plantations not yet in production,and other commercial and agriculturalactivities not covered by the Prnject, it is estimated that the companies' contributionsto Project costs could not exceed the following shares: PLZ - 53%, Busira - 33%, CCP - 40%.

7. External financing would cover up to 47% of PLZ's Project costs and since the foreign exchange proportion of PLZ's Project cost is estimated at 49%, no local costs would be financed from external sources. In the case of the smaller companies, it is proposed that up to 66% of Project cost would be financed by external funds; the foreign exchange proportion of Project cost is 31%, thus about half of the local costs would be financed by external funds. OIL PALM PROJECT PROJET PALMIER A HUILE lA IRE PLZ FiPmncial Projections Prev Ptnoci-resiaieee PLZ (Theussede of Zlites) ec milliers de Zaites) 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987

Production (toc) - Palm Oil 38,681 38,884 38,665 38,926 39,284 39,989 39,393 40,247 42,867 45,952 49,728 Pesdsctim.e (t- . halle de palme - Rubber 6,210 5,505 5,241 5,039 4,743 4,516 4,246 4,059 3,833 3,590 3,708 casutcheec

Margin sftar Deprec-ition - Palm Oil a 120/ton 4,642 4,666 4,639 4,671 4,714 4,799 4,727 4,830 5,i44 5,514 5,967 M-rge *preas,artlsa,ente - huile de palme Rhbber Z 70/tee 435 385 367 352 331 316 297 284 268 250 259 - casutcheun - Catee 4 Tes 2/ 338 335 335 335 335 33 335 335 335 335 335 pass n et thé 21 Ressemas from Rents, Pressing & Transit 700 700 700 700 700 700 700 700 700 700 700 Lepers, prassage et tramait

6,115 6,086 6,o41 6,o58 6,o8o 6,iSo 6,(5'9 6,149 6,447 6,799 7,261 A dedueir- interata Le-s TIterest 35 215 374 602 1,034 1,519 1,699 i,636 1,506 1,315 5,o65 - aepZts Company Tex 3,765 3,939 3,826 3,699 3,535 3,160 3,087 3,000 3,105 3,327 3,618 6 Net Iecoma after Tex 2,315 1,932 1,84i 1,757 1,511 L,471 1,273 1,513 1,836 2,157 2,578 Benéfice apeès iap ta add back Daprecistiîe 2,625 2,810 32,81 3,171 -352 3,866 4 110 4,252 4,384 4,42 4592 A rajeuter les ,erreets 6 220 6 Ormes Internal Cach Gerer-tion 4,94 4,742 4,928 5028 5,036 5,337 6 lace - ban Nepsymanta ,~~~~~~~~~~~~~~~~~~~~~~~~~~~~5i5,765 , ,, , 170 Plsde tr ssarlltarne brut le - Ld- RpyedPets6d 686 1,374 1,623 2,323 2,574 A deduire - siertiesement dec emprunte - Divid-nd. *nd F... 760 i,44o 2,800 1,400 1,4o0 1,400 i,4oo 1,4oo 1,4oo 1,500 1,500 dividendes et hen.r-iras 1/ _ Working Cepitl Incremeets 600 150 _ _ _ 240 __ 240 _ .. tti du fond de r

Net Intern-l Cash Cemeretion 3,580 3,152 2,128 3,628 3,636 3,697 3,297 2,991 2,957 2,826 3,096 Flue de trees-erie iRterns net add BmrringeY 700 22859 7 8R M5 4°° 40 A lljeutea epeuteY

i**mnt Invasertmen tfane

Moter Vechiclas and Routine Replocements 4o0 400 hoo 4oo 400 400 400 375 375 375 350 Vahiculas et renouvaellîente routiniers Non Palm Ol Imeateen te 550 550 550 580 530 530 530 530 300 28O 280 Secteurs autres que l'huile de pal.e Non Project Plantatione 3,701 309 225 114 318 2,724 2,520 2,284 2,155 2,472 Pleetatiene here prejet P_rojet Project (Z 30,590,000) 875 5562 3756 5464 8451 6 472 Total Imeements 5,526 6,82931 7,66 3 F33I 3,425 ,95 2,810 3,102 Tetel des iemestissaeent

Caeh Res.lt for the year (1,246) (1,472) (1,113) (73) 58 (78) 43 (34) (2) 16 (6) Rese1ltet de tréssrarle de 'anee-e Opeting Cash Belette 4,019 2,773 1,301 188 117 175 97 140 106 io4 120 CaiRss as I janvier Cloi.g COah -1...ce 2,773 1,301 188 137 175 97 i40 106 104 120 114 Cais.e ce 31 décembre

gomrrmricgs / Emprunts - 45E cf Projeot Coct 700 2,197 1,690 2,459 3,803 2,885 (686' (1,37U (1 3731 (0l373) (1,374\ - Odditionî reqir,ementos -o400 ?,000 1,000 4oo 40o 250) (950) (1,200)

2/ Cacao 1,800 tee s 150 = Z 270,000 p.a. ITe 1,300 ton s 50S Z 65,000 p...

July 7. 1977 7 juilet 19777 ZAIRE

(IiL PALM PRJIECT PEOJECT PALMIER A HUILE

Bouira boume Fisancial Projections Prenlelose P.nasc ieres B.sira.-Lemmi lIhoo.anda of Zaire (es millier- de Zlaie)

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 Production cf Palm Oil (toc) 3,850 4,110 4,100 4,500 5,000 5,340 6,460 6,860 7,322 7,600 7,850 Production d'huile de palme (tonnes) Maclt,, Denorelepreciacion - Im 108 .9/tom) 418 447 446 489 543 580 702 746 796 826 853 Mar-e avnt amortlmsemet Profit mn Coffee snd Cacao 3 292 200 20 Zo0 200 1501 0 100 100 Bénéfice mur- af e t cacao (Total) 760 739 646 U9 S4l 78U -8 S96 926 953 Le.a DmpeclaEtim 313 329 339 369 428 463 499 538 583 609 626 A dédI-re - Aeorti..meentE Isterema ~.._ 5 B3 91 fl j9'7 ..99.95 95 19 .22 .29 6 Ictérêtm Net Inomee Before Ta-ation 402 327 216 221 216 222 268 279 243 256 275 BénéfiEe8 a-nt iEmpOte Coopaoy Tam 'd 577 78 196 150 113 113 113 123 i4i 1 128 137 Emp6 tm Nect Imne 3 153 109 Add Batk epoiaio 149 - 9 18 137 B fice sprm Imp 339 6 428 463 7.9 538 5B 609 626 A rajeuter 1cm asrlls.sstat- Ormes- Imeoroal Cash îoosrorîon b37 4G 477 Le-B: 531 572 b737 7 flua de crésocerle iclarme baut Loon Pmortlcutoc 425 200 200 100 150 250 44 87 87 88 87 Asortiscnesets dmm nap-stse Tividenls -20 _ -_ _ 4oo 400 400 Q00 Nec Addooroi00Internai Cash Omueracimu7212 366 205 277 381 322 250 596 963 209 177 Flus de tris rerie lecome met oo 366 21 3Q9 .223 ... 8 A aotnlerpat ~ 53r 476 5B 6 609 421 louestuecca Isvemtil emuenla

Nom Project - Mechus"c,l 600 4o 40 40 40 40 4o 4o 40 40 h- Plentatione L47 190 82 35 75 LOB 197 205 214 190 L24 Mmcmprojet - Iqolpemens Pr-ject (7 1,939,770) 368 380 464 S06 221 - - - - Projet Plastation- loues een T`ota1 T1,7 598 502 539 621 369 237 245 254 230 164 Total dam isreatiaaerste Cash Ri.soîtfoc Test 28 (26) 47 (12) 52 13 (56) (54) 13 13 Reu1tat de emeeî de. sj Opcutuo8 Cash Rlasce 01 65 93 67 114 102 154 Closiug Cash Balance 167 ILi 57 t6 Caliee u 'i j-ni- 65 93 67 114 102 154 167 411 57 76 89 CaiEc as 31 déemmhr-

/EDF` / FTM 2 -oerdrnft tied tl luceutories cf 760,000 uhoold Uc liq,id.ted ini 4e chrse of 1977 / Bm-o-vert B.soosre de 760,000 .. ire- li6 aux st-ohk devrait s'épurer et COUTs de 1977.

.Tuly 7, 1977 7 juillet 1977 ZARIE OIL PALM PROJECT PROJET PALMIBRA HUILE CCP FiPneniel Proiecti.n P.evinione Financières CCP (thoùoands of '/aires) (en milliers de lairos)

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 Palm Oil Ptodaction (tom)-Martiga Disttrit 3,932 5,184 5,640 6,279 6,787 6,939 7,400 Lobue Distrint 7,710 7,903 8,866 9,409 Production d'huile de palme (tannes) - Marînga 3.300 3.300 3.000 3.000 3.000 2.800 2,600 2.400 2,200 2.000 1.800 - Labue Margin Bafora Depmeciation - Mania.g (Z 156/tam) 613 809 880 980 1,059 1,082 1,154 Lubeb (Z 1,203 1,233 1,383 1,468 Marge avent natotisamenas - Maringa 95/tom) 314 314 205 285 285 266 247 228 209 190 171 - Lubos 927 1,123 1,165 1,265 1,344 1.348 1.401 1,431 1,442 1,573 1,639 Ions Depreciation 313 329 339 369 437 503 576 651 734 783 Intereast119 120 1.Z 810 A déduire - etctmorsianac 183 225 . 253 240 206 174 147 108 intértst Net I-nome Befre Taaton 95 674 679 713 Company Tas et 52% 1/ 682 592 585 574 534 648 721 _ 117 352 359 366 34o 306 302 292 297 350 AeneEice avant ispits Net Icoae 495 557 327 354 316 Add Bock Dapraîiation 252 279 272 242 351 371 Bénèf- epede Rpais 313 329 339 369 437 503 576 651 734 783 810 A rJoutéie les impo e; GCosa Internel Cash onopasîon 808 886 666 723 753 755 855 923 976 1,134 Loss Lazn A-ortîeaion 134 1,181 Pla de t Rat-c-n brt i~~ (7.pit~~~~l37 26463 288 291 194 151 393 323 324 ~,~,ki,g 22 32 ~~725 23 î6 323 32 A déduire - artiesoe.et dos wrser ts l)ividsed Psid6 9 48 29 100 300 350 350 47 - augme.tation du fanAs de rassissent NRt InternaI Cash Goneraîmtio n3 559 AdA Borrowings 5°° ! Pn 385 639 622 617 190 Fluxdeatrlesoprese inter net 1,133 944 995 1,022 1,151 687 liepanihîr paur les lnvasttiesblets Inaes.monts InvestIsseenets Non Praj.et-Mebhonien1 853 217 86 249 235 -Plantetiase 26y 250 156 164 310 230 Rare Projet qeipenee 165 76 25 10 144 PrjoJot (Z 3,718,000) 136 125 103 180 Pt-plaatiens 679 898 793 926 422 _ - - - Prejet Iotal Irnsetmentz 1,018 972 1,009 1,052 1,161 691 394 292 289 413 41h Total des lavesîissannns Cash Reaîlt CEe the Yr-r 115 (28) (14) (30) (i1) (4) 45 Opening Cash Balnnce (8) 4 O 19 RésulLat do tré-esit do l'née 42 157 129 le 85 -m 71 116 112 112 RstCass nuanj Clasing3 Cash Ralante 157 129 115 4 75 71 116 77 112 112 132 CaIsse au 31 dneembre

/ Tan lozz btfd 'z486,000 I perte setéeédente. 21 Borreer ' EuropeRn T)evelepe,ent Fend /FED 350 1977

July 7, 197' 7 J,illet 19?7 ANNEX 8

ZAIRE

OIL PALM PROJECT

Financial and Economic Analysis

Basic Assumptions

1. Official Exchange Rate. The value of the Zaire is fixed in relation to the SDR (SDR 1 = Z 1) and is floating against the US dollar in a rather narrow range. In January 1977, the official exchange rate was Z 1 = US$1.153 and this has been assumed in the projections.

2. Local and International Inflation. The analysis is based on the premise that the rate of inflation in Zaire would be higher than that prevail- ing internationally and that the difference, although becoming smaller, would persist until 1985 (para 4.17). Given the earlier assumption of a fixed official exchange rate, the different rates of inflation will result in additional real local costs to the palm oil producers in as far as local inflation exceeds international inflation. Similarly, on the benefits side, the different rates of inflation would result in additional benefits to the palm oil producers, assuming that increases in the cost of producing oil would be fully reflected in Government's official prices for oil to be sold in the domestic market (para 6.03).

3. Price of Palm Oil. For the financial evaluation, the present price of palm oil of Z 350 per ton ex-Kinshasa was used as the base price for 1977, and for subsequent years this price was adjusted for the differences between local and international inflation (para 2). For the economic evaluation, import parity prices of palm oil were used (constant 1977 prices). Future prices of palm oil cif Matadi are assumed to be equal to the prices cif Europe, as projected by IBRD. Estimated transport and handling costs between Matadi and Kinshasa have been added to calculate import parity prices of oil, delivered at Kinshasa (Table 1). For palm kernels the price of Z 100 per ton has been used in both the financial and economie evaluation.

4. Costs. Plantation costs include both investment and maintenance costs; unit costs per ha are given in Annex 6, Appendices 1 and 2. The cost of fertilizer for existing young plantations, representing about 1% of overall Project cost, has not been included in the evaluation since the resulting benefits are difficult to estimate and in any case represent only a small fraction of total Project benefits. The costs of processing include investments in new oil mill equipment, but not depreciation of existing mills. The variable processing costs are estimated at Z 20 per ton of palm oil for PLZ, Z 23 per ton for Busira, and Z 25 per ton for Hevea and CCP. Transport of palm oil between the plantations and Kinshasa has been estimated at Z 14 per ton for PLZ, Busira and CCP. For the investment period overhead costs are ANNEX 8 Page 2 assumed to be included in the planting costs but from 1983 onwards separate overheads have been included at the following rates: PLZ Z 110 per ha; Busira Z 100 per ha; and CCP Z 95 per ha. Although these are fixed costs (in contrast to all other costs and benefits which are incremental) their inclu- sion is justified since in the "without Project" situation the companies would certainly reduce their overhead costs. Labor was priced at Z 1 per man-day. It is assumed that this rate reflects the opportunity cost of labor in the plantation areas, hence labor has not been shadow priced in the economic analysis. All costs are in 1977 constant prices.

5. Taxes. All taxes payable by the companies, with the exception of company taxes on profits, have been included as costs in the financial analysis but have been excluded from the economic analysis.

6. Foreign Exchange. The foreign exchange component of the costs has been shadow priced in the economic analysis at Z 1.1 per US$1 (the official rate is Z 0.867 per US$1) to reflect its economic value. The value of Project-produced palm oil is treated as foreign exchange savings and has therefore also been shadow priced in the economic analysis.

7. Foreign Participation. There is no reason to adjust the Project's cost and benefit streams in the economic evaluation for the fact that the oil palm companies are majority foreign owned. None of the companies is expected to bring in fresh funds from abroad because of the Project. The companies' financial contribution would entirely consist of locally available funds which in the "without Project" situation would most likely be used to finance alternative investments in Zaire, either in plantations or in other activities. In other words, the companies' own contributions should not be regarded as "tied funds" which without the Project would not have been available to Zaire. If the opposite had been true the internal economic rate of return of the Project would have been higher.

8. Production. Estimated yields in fresh fruit bunches (ffb) per ha for subsequent years are given by company in Annex 1, Table 8. Total production figures for both palm oil and palm kernels, by company and by year, are in Table 9 of the same Annex.

9. Cost and benefit streams under the various assumptions are detailed for all three companies in Tables 2-5. The internal financial and economic rates of return are at Tables 6 and 7, respectively. ANNEXE 8 ANNEX 8 Tableau 1 Table 1

ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Palm Oil Price Projections _/ Prévisions des Prix d'Huile de Palme (per ton) (par tonne)

(Z) Year/ Current US$/ 1977 Constant US$/ 1977 Constant Z/ 2/Import Parity Price 3/ Annee $EU Courant $EU Constant Zaire Constant Prix Parit4 ImDortation

1977 552 552 607 629

1978 495 460 506 469

1979 470 407 447 469

1980 510 413 454 476

1981 555 420 462 484

1982 600 424 466 488

1983 645 426 468 490

1984 690 426 468 490

1985 735 424 466 488

1/ It is assumed that price c.i.f. Europe 1/ Prix c.i.f. Europe = prix c.i.f. equals price c.i.f. Ilatadi Matadi

2/ Converted at the shadow exchange rate 2/ Au taux de change economique of US$1=Z 1.1 $EU 1=Z 1.1

3/ Includes: a) handling and administrative 3/ Inclus: a) manutention et adminis- cost at port of entry = Z 8 / ton tration = Z 8/tonne b) transport Matadi-Kinshasa = Z 6 / ton b) transport Matadi-Kinshasa = Z 6 c) handling at Kinshasa = Z 8 / ton par tonne c) manutention à Kinshasa = Z 8 par tonne ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Project Coste snd Returns: PLZ Coûts et Revenus dûs au Projet: PLZ t(Z '00) (Z '000)

Costs, including Physical Contingencies/ Base Cost / Coût de Base Colts, y compris Imprévu de Quantitr Revenues d P Local Costs, acetng. for Adjusted for Differ- Local Local Differential Inflation/ Revenues ential Inflation/ Cost, wlth Costs, Coût Locaux, tenant Foreign Exchange at Constant Revenus tenant Palm Oil Taxes/Coûts net of compte Difference In- at Shadow Ex- 1977 Prices/ Compte de la Revenues at Import Processing/ Transport/ Foreign Locaux Taxes/Coûts flation change Rate/ Revenus aux Difference Entre Parity Prices/ Year/ Coût Overhead/ Transport Exchange/ y compris Locaux W.Taxes/ W.out Taxes/ Devises au Taux de Prix Constants Inflation Locale Revenus au Prix Année Plantation d'Extraction Coûts Fixes d'Huile Devises Taxes sans Taxes y.c. taxes sans taxes Change Economique de 1977 et Mondiale Parité Importation

1978 2,919 1,776 - - 3,336 1,827 1,556 2,228 1,098 4,230 - - - 1979 2,029 428 - - 1,242 1,461 1,214 1,913 1,590 1,574 - 1980 2,177 1,200 - - 1,914 1,802 1,517 2,414 2,032 2,426 - _ _ 1981 2,607 2,400 - - 3,291 2,217 1,878 3,059 2,591 4,172 - - - 1982 2,382 1,236 - 25 2,067 1,940 1,651 2,754 2,344 2,620 667 947 912 1983 1,645 101 1,089 71 1,430 1,757 1,438 2,565 2,099 1,823 1,897 2,769 2,605 1984 1, ?29 189 1,089 132 1,553 1,898 1,553 2,847 2,329 1,969 3,539 5,308 4,861 1985 1,792 291 1,089 203 1,670 2,041 1,670 3,143 2,571 2,117 5,448 8,389 7,453 1986 1,841 406 1,089 284 1,791 2,190 1,791 3,372 5,758 2,270 7,606 11,713 10,405 1987 1,803 471 1,089 330 1,827 2,234 1,827 3,440 2,813 2,316 8,831 13,599 32,080 1988 1,797 523 1,089 366 1,868 2,283 1,868 3,515 2,876 2,368 9,807 15,102 13,416 1989 1,775 559 1,089 391 1,887 2,307 1,887 3,552 2,905 2,392 10,475 16,131 14,330 199o 1,715 585 1,089 41o 1,880 2,297 1,880 3,537 2,895 2,383 10,973 16,898 15,011 1991 1,634 589 1,089 412 1,843 2,252 1,843 3,468 2,838 2,336 11,042 17,004 15,106 1992 1,575 581 1,039 407 1,807 2,209 1,807 3,401 2,782 2,291 10,894 16,776 14,903 1993 1,525 572 1,089 4ho 1,775 2,169 1,775 3,340 2,733 2,250 10,729 16,522 14,677 1994 1,485 558 1,089 391 1,743 2,131 1,743 3,281 2,684 2,210 lo,464 16,114 14,315 1995 1,482 54° 1,089 378 1,726 2,110 1,726 3,249 2,658 2,188 10,125 15,592 13,851 1996 1,485 533 1,089 373 1,722 2,105 1,722 3,241 2,651 2,183 9,986 15,378 13,661 1997 1,482 524 1,0'9 366 1,713 2,093 1,713 3,223 2,638 2,172 9,817 15,118 13,429 1998 1,481 515 1,089 360 1,705 2,083 1,705 3,207 2,625 2,161 9,652 14,864 13,205 1999 1,437 510 1,089 357 1,679 2,052 1,679 3,160 2,585 2,128 9,557 14,717 13,074 2000 1,407 502 1,089 351 1,657 2,025 1,657 3,118 2,551 2,101 9,409 14,489 12,871 2001 1,370 493 1,089 345 1,631 1,994 1,631 3,070 2,511 2,o68 9,244 14,235 i2,645 2002 1,339 484 1,089 339 1,609 1,966 1,609 3,027 2,477 2,o4o 9,o74 13,973 12,414 2003 878 397 949 278 1,238 1,513 1,238 2,330 1,906 1,569 7,767 11,961 10,625 2004 934 319 732 223 1,092 1,335 1,092 2,055 1,681 1,384 5,985 9,216 8,187 2005 667 2i.4 489 150 752 919 752 1,415 1,158 953 4,005 6,167 5,479 2o06 394 105 241 74 402 492 402 757 619 509 1,791 2,758 2,696

ruo1 July 1977 juillet 1977 ZAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Project Costs and Returns: Busira-Lomas i Coûts et Revenus dûs au Projet: Busira-Lomami (z'000)0Z0'00) * Costs,including Physical Contingencies / c Base Costs / Coût de Base Coûts, y compris Imprévus de Quantité Project Revenues/Revenus dûs au Projet wm Revenues Local, accounting Adjusted for Differ- Local, Local, for Differential Revenues ential Inflation/ with net of Inflation/Locaux, Foreign Exchange at Constant Revenus Tenant Palm Oil Taxes/ Taxes/ tenant compte at Shadow Ex- 1977 Prices/ Compte de la Revenues at Import Processing/ Transport/ Foreign Locaux, Locaux, Difference Infla- change Rate/ Revenus aux Difference entre Parity Prices/ Year/ Coût Overhead/ Transport Exchange/ y compris sans tion Devises au Taux de Prix Constants Inflation Locale Revenus aux Prix Année Plantation d'Extraction Coûts Fixes d'Huile Devises Taxes Taxes W!taxes/Wput Taxi Change Economique de 1977 et Mondiale Parité Importation y comrion sans talras tarse 1978 292 109lg 212 209 259 255 138 __ -- 1979 25 -- __ _ 68 209 205 274 2 -- -- __ 198o 288 -- -- __ go 227 223 304 299 114 -- -- 1981 286 __ 89 226 222 312 306 113 -- -- 1982 124 3 -- 2 56 86 82 122 116 71 53 75 72 1983 106 il 90 6 105 129 105 188 153 133 225 329 237 1984 142 20 90 12 131 160 131 240 197 166 323 484 442 1985 159 30 90 18 147 180 147 277 226 186 574 884 677 1986 175 42 90 26 165 201 165 310 254 209 690 1,o63 944 1987 186 49 90 30 176 215 176 311 271 223 803 1,236 1,098 1988 194 54 90 33 184 225 184 347 283 233 893 1,374 1,225 1989 195 58 90 36 188 229 188 353 299 238 953 1,467 1,307 1990 199 61 90 37 192 234 192 360 296 243 998 1,536 1,365 1991 199 62 90 38 193 235 193 362 297 245 1,005 1,548 1,375 1992 200 61 90 37 192 235 192 362 296 243 990 1,525 1,354 1993 200 6o 90 36 191 234 191 360 294 242 975 1,502 1,334 1994 202 58 90 36 191 234 191 360 294 242 953 1,467 1,304 1995 200 57 90 34 189 230 189 354 291 239 923 1,420 1,262 1996 202 56 90 34 189 231 189 356 291 239 908 1,398 1,242 1997 200 55 9° 33 187 229 187 353 208 237 898 1,382 1,221 1998 196 54 90 33 185 226 185 348 285 235 878 1,351 1,201 1999 183 53 90 33 177 217 177 334 273 224 870 1,340 1,190 2000 173 52 90 32 172 210 172 323 265 218 855 1,317 1,170 2001 161 52 90 32 165 202 165 311 254 209 840 1,294 1,149 2002 151 51 90 31 160 195 160 300 246 203 825 1,271 1,129 2003 134 44 80 27 141 173 141 266 217 179 720 1,109 985 2004 105 33 60 20 108 132 108 203 166 137 540 832 739 2005 73 22 40 13 73 90 73 139 112 93 360 554 492 2006 43 7 40 49 40 75 diS Y.Z 180 277 246

July 7, 1977 7 juillet 1977 ZAIRE

A HUILE OIL PALM PROJECT PROJET PALMIER dûs au Projet: CCP Project CGuts snd Returns: CCF Coùts et Revenus (Z '000) (Z 000)

includirg Fhysical Cont=ngenclea/ Costa, au Projet fl,r6vu de Q.uautité te~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~cProject Revenues/Revenus dus Rase Çuet I Coût de Rase Coûts, v comDris Revenues Ad.justed for Differ- Local Lonal Costs, accouunting for Foreign Exchange ential Inflation/ Revenus Tenant Local Cost, Net Differential Inflation/ at Shadow Revenues de la Revenues at Import of Taxes/ Cout Locaux, tenant compte Exchange Rate/ at Constant Compte Palm Oil Cost, with Prices/ Inflation Devises au 1977 Prices/ Difference entre Parity Processing/ Transport/ Foreign Taxes/ Coûts Difference Taux de Change Revenus au Prix Inflation Locale Revenus aux Prix Overhead/ Transport Exchange/ y compris Locaux With Taxes/y W/out Taxes/ Year/ Codt Parité Importation Taxes compris taxes sans taxes Economique constant de 1977 et Mondiale Aunee Plantation d'Extraction CoGts Fixes d'Huile Devises Taxes sans 346 317 __ _. __ 520 ------250 322 284 393 1978 _- ______200 452 413 592 54î 254 1979 593 __ -- -- 160 363 324 486 434 203 -- 1980 475 -- __ __ -- 535 480 219 -- -- 510 ------173 388 348 1981 117 ------92 147 109 209 155 1982 217 -- 119 174 164 4 153 186 153 272 223 194 1983 162 8 134 373 315 256 216 272 407 185 18 134 10 171 210 171 1984 254 549 845 751 37 134 20 201 246 201 378 309 1985 216 910 1,401 1,245 34 235 287 235 441 361 297 1986 246 61 134 1,523 468 381 314 1,113 1,714 253 74 134 42 248 304 248 1987 325 1,275 1,963 1,749 134 48 257 315 257 485 395 1988 254 85 2,067 1,838 2o1 320 261 492 401 330 1,342 1989 256 89 134 50 1,887 495 406 334 1,380 2,125 1990 256 92 134 52 264 322 264 401 330 1,380 2,125 1,887 92 134 52 261 320 261 492 1991 251 1,380 2,125 1,887 260 317 260 488 4°° 329 1992 247 92 134 52 1,887 256 480 394 324 1,380 2,125 1993 239 92 134 52 256 312 386 318 1,380 2,125 1,887 92 134 52 251 307 251 472 1994 230 1,380 2,125 1,887 251 307 251 472 386 318 1995 230 92 134 52 1,887 472 387 318 1,380 2,125 1996 230 92 134 52 251 307 251 1,887 251 472 386 318 1,380 2,125 1997 230 92 134 52 251 307 387 318 1,380 2,125 1,887 134 52 251 307 251 472 1998 230 92 2,125 1,887 251 307 251 472 386 318 1,380 1999 230 92 134 52 1,806 247 466 380 313 1,320 2,033 2000 230 88 134 49 247 303 46o 377 31(0 1,264 1,946 1,729 84 134 47 245 299 245 2001 230 1,174 1,808 1,605 240 294 240 452 369 304 2002 230 78 134 44 1,452 441 361 297 i,o6i 1,634 230 71 134 40 235 287 235 2003 244 863 1,328 1,180 109 32 193 236 193 363 297 2004 192 58 1,040 923 Ac» 154 188 154 289 237 195 675 2005 156 45 86 25 513 92 172 141 116 375 578 2006 99 25 48 14 92 112

juillet 1977 July 1977 ANNEXE 8 ANNEX 8 TableauJ ZAIRE Table 5

OIL PALM PROJECT PROJET PALMIER A HUILE

Project Internal Financial Rate of Return Taux de Rentabilité Financière Interne du Projet and SensitivityAnalysis et Analyse de Seasibiliter Busira PLZ Lomami CCP

Case 1 / Premier Cas

C1 s C2 > Bi 13 16 12

14 il C1 + 10%, C2 + 1OX, Bi 12 il 14 10 C1 C2 + lO%, B, - 10% 10 12 9 C1 + lO%, C2 + 10%, B1 - 10%

Case 2 / Deuxième Cas

21 16 Cj ,C 3 > B2 18 14 Cl + 10%, C 3 + lO%, B2 16 19 16 19 14 C1 + , C3 , B2 l10% 13 Cl+ 10%, C3 + 10%, B2 - 10% 14 16

Case 1: Effectof differentinflation rates PremierCas: Comptenon tenu de l'effetde for Zaire and other parts of the la différence entre inflation world not taken into account mondiale et l'inflation au Zaire Case 2: Different inflation rates taken Deuxième Cas: Compte tenu de l'effet de la into account différence entre inflation mondiale et l'inflation au Zaire sur les coûts C1 : ZQreign Exchange Cost et les revenus differents C2 : Loqgl cost, including taxes; different inflation rates not C1 : CoÛt en devises differents taken into account C2 : Coût en monnaie locale,y compris taxes;cmte non tenu taux d'inflation C3 : Local cost, including taxes; different Inflation rates taken differents into account C3 : Co'uten monnaie locale,y compris taxes;compte tenu taux d'inflation B1 : Revenues;different inflation rates not taken into account differets - Bî : Revenues; compte non tenu taux B2 : Revenues; different inflation rates taken into account - dtinflation differents B Revenues; compte tenu taux d'inflation 2 differents

February 1978 fevrier 1978 ZAIRE

PALM OIL PROJECT PROJET PALMIER A IUILE c

Project Internal Economie Rate of Return and Taux de Rentabilite Economique Interne du Projet et Sensitivîty_na iys Aiialyse de Seasibilite' (°%) (%)

Economic Costs and Benefits/ Busira Couts et Revenus Econoîniques PLZ Lomami CCP TOTAL

C4 ,C 5 ,B 3 15 18 14 16

C4 + 10% , C5 + 10% , B3 14 16 13 14 5 3

C4 sc5 > B3 - 10% 13 15 12 14

C4 + 10% , C5 + 10% , B3 - 10% 12 13 il 12

Notes: Notes:

Different inflation rates for Zaire and other Compte tenue de l'effet de la différence entre parts of the world taken into account (effects inflation au Zaire sur les couts en monnaie locale a c only tue local coîas). - -- -C4 ;-:-Co'ten d'vises aux taux de change économique C4 : Foreign exchange cost shadow priced at $EU = Z 1.1 the rate US$ 1 - Z 1.1 C5 : Coût en monnaie locale, taxes non compris; differents C5 : Local cost, excluding taxes; different compte tenu taux d'inflation inflation rates taken into account B3 : Revenues au prix parité importation B3 : Revenues at import parity prices juillet 1977 July 1977 TAIRE

OIL PALhMPROJECT PROJET PALMIER A HUILE

Government Cash Flow Resulting from the Project Flux de Trésorerie de l'Etat (in thousands of use> (en milliers de $us)

Outflow / Flux Negatif Inflow / Flux Positif Net Cash Flow/

USAID IDA & ADB Smallholders and Companies/Sociétés Company Tax / other Taxes / Year Capital Interest Capital Ioterest Technical assistance Capital Interest Impôts Sociétés Autres Taxes

1977 (700o) i (700) 35 24 1978 21 (3,200) 12 800 (2,800) 210 409 186 1979 21 (2,300) 32 900 (1,800) 440 384 403 1980 21 (3,200) 53 goo (2,700) 670 428 688 1981 21 (4,200) 81 900 (3,700) 980 492 970 1982 21 (2.300) 105 900 (1.800) 1,260 105 432 1,271 1983 21 114 1,350 1,350 308 480 3,353 1984 21 114 1,350 1,220 596 528 3,559 1985 21 114 1,350 1,080 940 574 3,809 1986 21 114 1,350 950 1,282 623 4,070 1987 23 27 114 1 350 810 1,484 646 4,126 1988 23 26 152 112 1,350 680 1,484 664 3,891 1989 24 25 152 112 1,350 540 1,484 672 3,733 1990 23 24 152 111 1,350 400 1,484 672 3,596 1991 23 23 152 109 1,350 270 1,484 663 3,460 1992 24 22 152 108 1,350 130 1,484 653 3,311 1993 23 21 152 107 1,484 643 1,824 19 9 L 23 20 152 106 1,484 633 1,816 1995 o4 19 152 105 1,484 625 1,809 1996 23 19 152 104 1,484 624 1,810 1997 23 18 152 103 1,484 619 1,807 1996 24 17 456 101 922 615 963 1999 23 16 456 99 691 6o7 709 2000 23 15 456 96 461 598 469 2001 o4 14 456 92 236 586 236 ?002 23 13 456 89 115 576 xîo 2003 23 12 456 86 463 (114) 2004 24 il 456 82 394 (129) 2005 23 10 456 79 276 (292) 2006 ?3 9 456 75 150 (413) 2007 24 9 456 72 (561) 200o 23 8 456 68 (555) 2009 23 7 456 65 (551) 2010 24 6 456 62 (548) 2011 23 5 456 58 (542) 2012 23 4 456 54 (537) 2013 24 3 456 51 (534) 2014 23 2 456 48 (529) 2015- ?3 1 456 45 (525) 2016 24 456 41 (521) 2017 456 37 (493) 2018 456 34 (490) 2019 456 30 (486) 2020 456 27 (483) 2021 456 23 (479) 2022 456 20 (476) 2023 456 16 (472) ?O24 456 13 (469) 2025 456 9 (465) 2026 456 6 2027 456 2 (462)

Total O 606 0 3,510 4,400 ° 11,025 21,980 15,729 40,218

February 1908 fevrier 1978 o ANNEX 10

ZAIRf

OIL PALM PROJECT

Training

1. Over the last two decades all companieshave made considerable and systematic efforts to train Zairian nationals and have steadily reduced their expatriate staff. During the Zairianizationperiod of the last four years, however, the companieswere forced to reduce their expatriate staff at a faster rate than desirable and many were replaced by Zairians who were not fvillvci,alified for their new responsibilities. As a consequence,the failure rate has been high and the remaining expatriate management and technical staff was often forced to work under great stress to operate the plantationsand installationsin a normal, efficient manner. In this situation the resources, particularlyin terms of experiencedmanpower, but also financially,were often lacking for the continuationof comprehensivetraining activities. Whatever training was done in recent years was more the result of incidental efforts than of a systematic approach.

2. In the past the companies had more success with the training of agriculturaland accounting staff than with that of technical and senior management staff. With regard to qualified and experiencedtechnical staff the oil palm companieshave to compete with enterprises in Kinshasa and the mining areas and prospective senior Zairian managers often lack the broad experience to become fully effective.

3. Since the companieswere de-nationalizedthe prospects for training of Zairian staff have certainly improved and the Project would provide support to strengthenthe training activities of the companies and thus, in the long-run, to reduce the need for expatriates. Training activities would in part focus on existing staff to improve their skills which would permit them to do a better job in their present assignments or to prepare them for higher positions. Efforts would also be undertaken to train new staff, often young school graduates, to develop an increasing cadre of skilled personnel.

4. The Project would support the following activities:

(i) Training of Plantation Managers. Young school graduates or promising individualsamongst the existing staff would need to work for an extended period under the supervision and guidance of experiencedstaff to become fully effectiveas chief of a plantation sector (400-800ha) or of a division (1,500-2,000ha). PLZ would therefore organize a series of one-year practical training sessions on its two largest plantations,Yaligimba and Lokutu. The number of trainees would be about ten per year, which the is the maximum PLZ can handle and which is likely to be sufficient to meet the annual needs of PLZ (about four or five) and the other companies. Under the Project PLZ would constructhousing for the trainees and would provide them with motorcycles and cost of living allowances. ANNEX 10 Page 2

(ii) Course in Mechanics. To ease the shortage of qualified mechanics for the maintenanceof oil mills and transportfleets the program of an existing secondary school at Lokutu would be expanded to include a course in mechanics. The school is locatednear the headquartersof PLZ's Lokutu plantation and is operated by a Catholic mission. At the same locality PLZ owns a workshop for apprenticeswhich has not been used since 1965, and which would be reactivated. PLZ would, under the Project, be responsible for the constructionof a dormitory and a classroomfor about 30 students and for the procurementof necessary instructionequipment. PLZ would also employ a qualified teacher, specializedin mechanics,who would be attached to the school's regular staff. Graduates of the school who have taken the mechanics course would be availble for employment by PLZ or any other company, as needed.

(iii) Study Trips. Existing senior Zairian management,accounting and technicalstaff would be given the opportunityto broaden their experience through short visits (one to two months) to other palm oil producing countries. Some six candidateswould be selected each year by Government in consultation with the companiesbut nominationscould include, if Government so desires, some of its own staff or staff of companiesnot included in the Project. In contastwïth the two other training activities,for which PLZ would be responsible,Government would make arrangementsfor the study trips and the costs would be financed from IDA's contributionfor technicalassistance to Governmentunder this Project. ANNEXE 11 ANNEX 1L

ZAIRE

OIL PALM PROJECT

Estimated Schedule of Disbursementsof IDA Credit Plan Estimatif du Décaissementdu Crédit AID (in thousands of US$) en milliers SEU)

IDA FY Quarter ending Disbursement CumulativeDisbursement Exercice IDA Trimestre à Décaissement Décaissementcumulé

1979 December 1978 300 300 March 1979 300 600 June 1979 300 900

1980 September 1979 300 1,200 December 1979 300 1,500 March 1980 300 1,800 June 1980 300 2,100

1981 September 1980 500 2,600 December 1980 500 3,100 March 1981 500 3,600 June 1981 4oo 4,000

1982 September 1981 500 4,500 December 1981 500 5,000 March 1982 500 5,500 June 1982 500 6,o0o

1983 September 1982 500 6,500 December 1982 500 7,000 March 1983 500 7,500 June 1983 500 8,ooo 1984 September 1983 4oo 8,4oo December 1983 300 8,700 March 1983 300 9,000

February 1978 Fevrier 1978 ZAIRE

OIL PAIL PROJECT PROJET PALMIER A HUILLE

Key Indicators Indicateurs clefs

1978 1979 1980 1981 1982

New Oil Palm Plantings, ha Nouvelles plantations palmier, ha

PLZ 1,270 1,980 2,200 2,260 2,190 PLZ Busira 100 200 200 200 200 Busira CCP - 265 250 400 500 CCP

Construction of New Workers Houses, number Construction nouvelles habitations pour travailleurs, nombre

PLZ 265 253 215 155 155 PLZ Busira 50 50 50 50 - Busira CCP - 35 50 65 - CCP

Rehabilitation Of Existing Workers Houses, number Réhabilitation habitations existantes, nombre

PLZ 200 200 200 200 200 PLZ CCP 300 300 100 - - CCP

Construction of Other Buildings, number Construction autres bitiments, nombre

PLZ 41 21 10 4 4 PLZ Busira 3 2 - - - Busira CCP 3 6 - - - CCP

Recruitment of Additional Expatriate Staff, number Recrutement personnel expatrié, nombre

PLZ 6 - - - - PLZ CCP - 1 - - - CCP

Recruitment of Additional Local Staff, number Recrutement personnel local, nombre

PLZ 5 2 5 2 3 PLZ Busira 1 - - - - Busira CCP - _ 1 _ CCP

February 1978 fevrier 1978 MAIRE

OIL PALM PROJECT PROJET PALMIER A HUILE

Project Implementation Schedule Calendrier d'Exécution du Projet

Year 1977 1978 1979 1980 1981 1982 Année 4 Trimestre Quarter Quarter ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~2,3 . 4 .1 . 2 . 3 4.1.2 .3.4.1.2 . 3 . 3 . 3.4. Trm se

PLZ Procurement Land Clearing Equipment PLZ Equipement Lourd ...... - Tender - Appel d'Offre ...... - Order - Commande

- Arrival on Site - Arrivé au chantier

Procurement Oil Mill Equipment Equipement Huileries ...... Lukumete/Yaligimba Lukumete/Yaligimba

- Tender - Appel d'Offre ...... -...... - Order - Commande ...... - FOB Europe - FOB Europe ...... - Arrival on Site - Arrivé au Cnantier ...... - Installation - Montage

Lokutu Lokutu

- Tender - Appel d'Offre ...... - Order - Commande ...... - ...... -...... - FOB Europe - FOB Europe ...... -...... - Arrival on Site - Arrivé au Chantier ...... - Installation - Montage

Construction of Nouses & Other Buildings (frumber) 506 . 4j4 . 45 . 359 . 359 Construction Bâtiments

011 Palm Plantings (ha) 1 ,9 0 2,2002 2 2,190 Plantation Palmier (ha) ...... Recruitment of Staff (number) Recrutement Cadre (nombre)

- Expatriate - Expatrié Zairois - Local ...... 5...... 7...... d...... 3-

Busira Construction of Houses & Other Buildings (number) 52 . 5O ... B.usira Construction Bâtiments (nombre) ...... 0i1 Palm Plantings (ha) 100 200 200 200 200 Plantation Palmier (ha)

Recruitment of Staff - Local (number) i Recrutement Cadre - Zairois (nsmbre) ...... Bâtiments (nombre) CCP Construction of Houses & Other Buildings (number) 303 341 150 65 CCP Construction ...... Palmier (ha) Oil Palm Plantinga (ha) 265 250 400 500 Plantation Cadre (nombre) Recruitment of Staff (number) Recrutement

Expatrié - Expatriate 1 - ...... - Local i 1 - Zairois ...... F 1r......

February 1978 fvir17 I BRD 12834R Y GIL PALM~~~~~~~~~~~~~SWELE' ?ROJECT

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