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How to Start a Palm Oil Production Business in Nigeria | 2022 Guide

Last modified about 2 years ago by . Posted in School News |

How to Start a Palm Oil Production Business in Nigeria.

Palm Oil Production Business in Nigeria… Yes, you read that correctly, Palm Oil Production Business in Nigeria. What’s the first thing which came to your mind immediately you read that?

You probably thought of the archaic method of palm oil production in Nigeria but the truth is, palm oil production has moved beyond that.

Start a Palm Oil Production Business in Nigeria

How to Start a Palm Oil Production Business in Nigeria

Palm oil production business is certainly profitable as the market for palm oil and the bye products of palm oil and oil palm fruit is available and always expanding both in Nigeria and beyond the shore of the country.

In recent years, the average cost of palm oil in 25 liters is 6,000 naira. The price is more in many areas like in the Northern part of Nigeria and a little cheaper is the rural areas of the coastal regions in Nigeria, especially around the Niger-Delta area. What’s certain, however, is that palm oil production business in Nigeria would earn you money which is rewarding.

With the above said, how exactly can one start a palm oil business in Nigeria is which is profitable?

1. Have a business plan.

A business plan is very important if you intend to go into palm oil production. You need to go around for market surveys. Check what is obtainable in the market. What the cost of palm oil is in your neighborhood, your state of residence and in other parts of the country.

While carrying out market surveys, you would have to find out when palm oil price increases or decreases. Most times, palm oil price increases during the raining seasons when there is flooding in most parts (just like it happens with cassava harvest). Consequently, the price of palm oil stabilizes during the dry season. This would let you know when to sell in bulk.

You would have to find out where is best to supply and your market base. Finding out where your competitors are doing which is right to follow them and what they are doing wrong to improve on their businesses.

A business plan would state what size of palm oil production your business should be, you daily or weekly oil production volume, your estimated profit margin from the palm oil business based on the feasibility study carried out. It would also state what number of workers the business would employ, the budget for salaries and so much more.

2. Source for capital.

If you are a startup with little or no collateral to tender, most commercial financial institutions like banks and money lenders might be unwilling to lend you money to start up your business but you can give them a trial. Make sure your proposal and business plan are well prepared as these would your business an edge when applying for loans as it would enable the loan lenders(  i.e the commercial bankers or other financial institutions ) gauge your business’s worth and viability, hence the ability to repay the loan you are requesting for.

3. Acquire land.

Of course you need land to situate the palm oil production business. It could be your own or a land which is leased.  The land has to be situated in an area which would be accessible to customers to do business with your business and be motorable enough for you to transport the palm oil and other palm fruit by-products to the consumers.

It is actually important that the land you would be acquiring or be using is well-secured as you would need

Other steps to take when going into palm oil business are:

4. Buy oil mill equipments.

5. Employ qualified oil millers

6. Source for and buy quality oil palm fruits

7. Plant quality oil palm fruits

Major processes of palm oil production

1. Palm fruit reception

Palm fruit reception is basically the process where the oil palm bunch is harvested, cut to remove the oil palm fruit from the bunch and the shaft selected completed from it.

2. Palm oil sterilization

In Palm oil sterilization, hot water or steam is used to make sure the harmful microbial activity on and in the oil palm fruit is killed off or dormanted.

3. Palm oil threshing

In palm oil threshing, force is used to separate the oil palm fruits from the bunch and other unneeded parts.

4. Palm oil digestion

Palm oil digestion is the process where the oil palm fruit is crushed into pieces so increase the surface area and reduce it to a pulp so as to allow even more oil be extracted.

5. Palm pulp pressing

Palm pulp pressing basically involves squeezing or compressing the crushed cooked oil palm fruit to extract palm oil from it with force

6. Palm oil clarification

Palm oil clarification involves purifying the palm oil which has been milled to removed the shaft and all other unwanted adulterations from the shaft.

7. Palm oil storage

After the palm oil has been milled and sieved the removed the shaft and filtrate, revealing the palm oil wanted, the palm oil would be stored in a special container until it is ready to be transported or transferred to the customer.

Cost of setting up a palm oil mill

A palm oil mill which basic mills and produces palm oil that is up to 50 tons in capacity would cost about $60,000 which is about 22.08 million naira when converted. And if you want to diversify by producing palm kernel oil gotten from the palm kernel which is a by-product after milling palm oil, you would require roughly the same amount of $60,000 which is also converted to naira to give 22.08 million but that amount would produce one-fifth the quantity of what it funds to produce for palm oil at 10 tons for the amount.

You must take note that the amount is an estimate and what you would actually require to set up a palm oil mills depends on many factors such as the availability of land, the number of equipments and costs used, the estimated production output, the yield rate of the palm oil and so much more.

What’s your take on this? We believe this article was helpful, if yes, don’t hesitate to share this information with your friends on Facebook, Twitter, Whatsapp and Google plus.

NG Team.

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