Before you proceed with the production process of palm kernel oil extraction, you may want to read the previous article: How to Start Palm Kernel Oil Extraction Business.
The article tells us the viability of the business. We see that the demand for Crude Palm Kernel Oil (CPKO), palm-kernel Cake (PKC) and Palm Kernel Sludge (PKS) in the market is very Huge, and as a matter of fact, the demand for it is all year round plus the profit in this business is amazingly good.
We also see that due to the high demand of the products, the buyers sometimes book for the products in advance. Sometimes, buyers even pay in advance in order to secure products.
I won’t write further about the business as the article referenced above is self explanatory. However, I present below the production process, machinery requirement and an updated profitability analysis of the business.
In summary, the production line involves reception of good palm-kernel nuts, crushing the nuts with the nut-crusher, heating the seeds with the seed fryer so as to excite the oil molecules, and transferring the heated-crushed nuts to the oil press.
The oil press presses the seeds, and expels the oil content of the seeds through the oil exit chamber, and at the same time expels the cake through the cake exit chamber.
The crude oil is collected in drums or over-head tanks and left to settle. Since the sludge (sediments) is denser than the oil, it settles below the oil. The oil can then be collected separately from the sludge.
Two to three persons can conveniently operate the machinery. Below is a brief description of the machinery used.
»Function: Crushes the palm-kernel nuts and reduces it to smaller sizes so as to ease the oil extraction process.
»Price: N350, 000.
»Function: Fries/roast the crushed nuts. This process heats up the crushed nuts, thereby exciting the oil molecule content of the nuts.
»Price: N480, 000.
»Function: Presses the heated nuts and expels the oil content of the nuts via the oil exit chamber, while the cake is collected via the cake exit
»Price: N450, 000
Total: N1, 280, 000.
»Note: Their is an oil press with 4T/D capacity; it costs N800,000.
From the above, you will need about two million naira (N2,000,000) to procure and install the machinery and also procure about 10tons of raw materials (palm-kernel nuts).
1 tone of palm-kernel nuts gives an average of 410liters of oil, 540Kg of cake, and 25Kg of sludge.
Average price for 1tone of palm-kernel nuts is N70,000.
Average Selling Price of the products is
»Oil = N200 per litre
»Cake = N15 per Kg
»Sludge = N20 per Kg.
So if you process 1tone, you sell:
»Oil @ N200 x 410 = N82,000
»Cake @ N15 x 540 = N8,100
»Sludge @ N20 x 25 = N500
Total sales = N90,600.
Profit = N90,600 – N70,000= N20,000
The above profit is for processing 1tone of palm kernel.
Now, if you process 2 tone per day, you get N20,000 x 2 = N40,000 per day as profit, which by extension implies a monthly profit of N1,120,000 (24days). Profit increases as production increases.
Note: If you sell your products at a bit lesser price, you will generate much more sales and still make a reasonable profit. If you are a good negotiator, you can get the nuts as low as N(60,000 – 65,000) per ton.
Palm kernel processing business is lucrative and the market for the products is vast. It even extends to the international market. Get buyers, offer them good quality products at competitive prices, and that’s it.
If you have much capital to process large quantity continuously, visit Nigerian export promotion council; they will link you to exporters or international buyers.
Wishing you all the best in your Quests.