Sodinaf Palm Oil Equipment Covered by CFA3.81 Billion Ownership Claim From Chinese Supplier

Industrial equipment held by Cameroon’s Société de distribution nouvelle d’Afrique (Sodinaf) is subject to a retention-of-title clause in favor of Chinese supplier CNBM General Technology Co. Ltd, which preserves the supplier’s ownership rights until the obligation covered by the agreement is fully paid.

The registry of the Douala-Bonanjo Court of First Instance recorded the clause with the Trade and Personal Property Credit Register (RCCM) on September 24, 2024, according to a recently released registry certificate. The equipment is intended for palm oil processing and refining.

The certificate values the obligation covered by the security arrangement at $6.47 million, equivalent to about CFA3.81 billion at the reference exchange rate on the registration date.

Sodinaf acquired the equipment under a sales contract signed in Zhengzhou, China, on September 20, 2017. The order therefore predates the public announcement of Sodinaf’s palm oil refinery project by nearly two years and the RCCM registration of the retention-of-title clause by seven years.

Retention of title, not a seizure

A retention-of-title clause allows a seller to remain the legal owner of delivered goods until the buyer fully pays the obligation specified in the contract. Registration with the RCCM makes that right enforceable against other creditors and potential buyers of the equipment.

Under OHADA law, if payment is not made when due, the seller may seek the return of the goods. Their value must then be deducted from the outstanding claim, and any excess must be returned to the buyer.

The certificate, however, does not establish that Sodinaf still owed the entire $6.47 million when the clause was registered. It provides no information on payments already made, any outstanding balance or why the security associated with the 2017 contract was not registered with the RCCM until September 2024.

The document also makes no reference to a seizure, a request for the return of the equipment or insolvency proceedings against Sodinaf. The $6.47 million represents the obligation covered by the retention-of-title arrangement, not necessarily a debt that remains payable today.

Registered amount equals 27% of investment announced in 2019

In 2019, Fabrice Siaka’s group announced a CFA14 billion investment to build a facility in Douala through Nouvelle Raffinerie du Cameroun for crude palm oil refining and household soap production. The project was expected to create 158 direct jobs.

The CFA3.81 billion covered by the retention-of-title clause is arithmetically equivalent to about 27% of the investment announced at the time. That ratio, however, provides no indication of how much of the project was completed.

The certificate documents a contract for equipment but contains no information on civil works, other installations, working capital or the total amount ultimately invested.

In August 2019, the project received approval from Cameroon’s Investment Promotion Agency, which made it eligible for benefits available under the country’s private investment incentive legislation during the installation and operating phases.

The business formed part of Sodinaf’s diversification after its July 2018 acquisition of Rougier’s forestry and industrial subsidiaries in Cameroon and the Central African Republic. The transaction included Société forestière et industrielle de la Doumé, Cambois, Sud Participation and Rougier Sangha-Mbaéré.

Refinery operations remain undocumented

In 2023, Nouvelle Raffinerie du Cameroun was still among four facilities that industry sources identified as prospective entrants into Cameroon’s palm oil refining market. It was cited alongside Société de raffinage du Cameroun in an industry that faced a shortage of raw materials.

At the time of publication, publicly available sources do not establish the refinery’s actual installed capacity, the date it began operations or its production volumes.

AM