SETTING UP A PALM OIL PROCESSING BUSINESS
Business Overview
Why Start a Palm Oil Processing Plant?
Palm oil processing business has suddenly become a money-spinner. If you live in Nigeria and are looking towards starting a business, one profitable and viable business that you can start either on a small scale or large scale is to go into palm oil processing and distribution.
All you need to do to launch this type of business is to have a steady supply of palm kennel and the equipment needed for processing the palm kennels into palm oil. You will also need drums cum containers and causal laborers. If you have the financial capacity, you can own your own palm kennel plantation.
Market Prospects
Nigeria is the largest consumer of palm oil in Africa with a population of 197 million people (World Bank, 2018). The nation consumed approximately 3 million MT of fats and oils in 2018, with palm oil accounting for 44.7% or 1.34 million MT. In the same period, production stood at 1.02 million MT resulting to supply shortfall of 0.32 million MT (excluding possible impact of palm oil exports).
Raw Materials
The primary raw material for this business is the palm fruit which is available in large quantity in the South-South and South-East.
Equipment Needed
Automated machines are the principal forces in toothpick production in Nigeria or anywhere around the world. The two types of equipment are semi-automated and fully-automated oil milling machines. Some mills are produced in Nigeria while the rest are imported.
Purchasing high-quality machinery is a way to ensure efficient operations and machine-life longevity.
The machines/equipment for palm oil production in Nigeria are;
- Oil Milling unit
- Palm bunches separator
- Steam Boiler
- Thresher
- Clarifier
- Fiber and nuts separator
- Palm kernel shaker and separator
- Warehouse and/or Storage Bins
- Transportation and Conveying Facilities
- Generator
- Scales; which will include the dial beam scales
- Forklift
- Hand-held sewing machine (for bagging)
- Ear muffs and goggles and respirators
- Protective Clothing (helmet, overall and protective boots)
- Fire Extinguisher
- First Aid Box
- Buckets, shovels, scoops, rubber hammers, brooms and brushes that are used in weighing, mixing and cleaning operations.
Production Process
Fresh fruit bunches are harvested, then transported to a palm oil mill. The mill process extracts the palm oil from the flesh of each individual piece of fruit contained on the bunch.
The palm kernel, the nut found in the center of each piece of fruit, is extracted and sent to a palm kernel crushing mill. The oil is extracted from the kernel. The pulp left over from this process is pressed together, forming palm kernel cake or expeller.
These processes extract three major palm products: crude palm oil, crude palm kernel oil and palm kernel expeller.
Distribution/ Marketing Options
The envisaged plant can set up its own sales/marketing team to engage in a sustained one-on-one sales drive. Advertising options could be based on usage of flyers and referrals,
Manpower Requirement
A total of 15-25 staff is required in the short-term operations of the plant. They include Skilled Worker -2, Semi-skilled Workers-6, Salesmen-1, Driver-cum-salesman-1 and Security Operative – 1
Estimated Start-Up Cost (Small Scale): – N20, 500,000 – N25,500, 000.00
Potential Profit:- N 12,0500,000 – N17,000,000.00 per annum
Estimated Start-Up Cost (Medium –Large Scale): – N65, 500,000 – N155,500, 000.00
Potential Profit:- N 35,000,000 ,- N90,000,000.00 per annum
This profile, or any similar one, can be developed into a bankable proposal for any interested investor. For further clarification, do contact our offices in the address stated below.
By Thomas Tayo Oyewole
He works with Michael Stevens Consulting (MSC).
MSC is an Accredited Bank of Industry (BOI) Services Provider (BDSP)
For further information contact:
Mobile: +234-803-3962-942, +234-903-6959-658
oyewole.tayo@michaelstevens-consulting.com and copy info@michaelstevens-consulting.com