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Starting Palm Oil Production And Marketing In Nigeria

Palm oil is one of the cooking oil that is widely produced in major parts of West Africa. Nigeria happens to have been of one of the earliest and largest palm oil production country in the world, although more recently, Malaysia and Indonesia have become the two largest producers of the famous palm oil in the world.

In Nigeria, the demand for palm oil is very high and remains relatively constant all through the year. This is one reason why the palm oil production business is a very viable one. With a good start-up capital, and the right business attitude, coupled with the right and necessary steps, one could venture into the palm oil production business and see great returns in investment.

If you are interested in venturing into this business, this feasibility study on palm oil production business will give you a guide on the necessary steps to take, as well as the things you will need to start-up the business.

Grow a Palm Tree Plantation

First, you must determine whether you would want to be growing the palm nuts for your palm oil processing business. If you would want to grow a palm tree plantation, it is very important you acquire a good land size for your palm tree plantation. Palm tree plantations do very well in some parts of Nigeria than others; you will want to bear that in mind. Some good places where palm tree plantations do very well in Nigeria are Bayelsa, Delta, Ebonyi, etc. If you would not grow a palm tree plantation, but rather buy palm nuts from palm farmers, you should proceed to the succeeding steps below.

Get a Good Location

Yes! The location of your of palm oil production business is very important to the success of your business. It will be a key determinant whether you will make huge sales and profits, or not. It is very important you get a location that is very close to your target market. A good market for your palm oil production business will be urban places or states, or areas where the production of palm oil is not done locally. You will have to get a good size of land to for your palm oil production. Depending on the scale of the palm oil production business you would want to operate, you should get a good land of suitable size. The amount you will spend on procuring land could range from a several hundreds of thousands in Naira to about N5 million, depending on the scale you want to operate.

If you are not going to have a palm plantation, but would be operating a palm oil production mill solely, then it is very important you locate your palm oil production business in a place that is very close to the source of your palm nuts. Delta state, Ebonyi, Bayelsa, etc are all good places in Nigeria where palm oil is mainly produced. You could source your palm nuts from palm farmers in these places.

Get the Equipment

To be able to produce palm oil in huge commercial quantities, you will have to get the needed equipment for the production. This will require huge capital. You will require machines for both the extraction process and for storing the resulting palm oil, as well as trucks for distributing palm oil to your market. For a head start, these are the machines you will need for your palm oil production business:

·         Thresher

·         Boiler & Kettle

·         Fibre Separator

·         Pressers

·         Digester

·         Generator Set

·         Water Storage Tank

·         Distribution Trucks

Also, it is important you get good containers for your palm oil. Palm oil in Nigeria is mostly sold in containers of 10, 20, 25, and/or 50 litres; or in barrels (for very large quantities). You could realise lots of profits from selling your palm oil. In the period of January to May, 20 litres of palm oil could be sold for as high N5,000; while in periods of June to December, where palm oil usually experiences scarcity, 20litres of palm oil could be sold for as high as N8,000 or more.

Hire Workers

You will also need to hire employees to run your palm oil production business. Workers who will operate the extracting machines will be needed, as well as truck drivers who will be concerned with distributing the palm oil to customers. You should know that you will spend capital in paying these workers.

Contact Suppliers

If you would not be operating your own palm tree plantation, then it is important you establish good business relationships with palm farmers in order to get palm nut bunches for palm oil extraction. As mentioned, you may want to locate your palm oil production business in states such as Delta, Ebonyi, Bayelsa, etc to help cut down the cost of transportation. You should aim to bargain for good prices for the palm nut bunches.

Transportation to Market

Transportation is a very key aspect when operating the palm oil production business. Unless you do not want to make as much profits, you will have to take this one very seriously. If you want to make a lot from palm oil production business, you will have to make sure that you seriously cut down on cost of transportation. How do you do this?

If you do not operate a palm tree plantation, you should make sure your palm oil production business is not located too far away from your supplier source and your target market. It is very important you procure good distribution trucks that are in sound condition

Write a Business Plan

So many entrepreneurs do not write business plans for their businesses; you should have one for your palm oil production business. There are many benefits to writing a good palm oil processing business plan for your business. A good reason is that it helps you to be able to attract loans from the bank, and investors alike.

In your business plan, make sure you write down your business name and location, your business goals, the products your business is offering, your target market, etc. It is also very important you put down the cost of starting up your palm oil production business, as well as how you intend to raise the capital.

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