How To Start Palm Kernel Oil Production Business In Nigeria: Your Simple Guide
If you are in search of a profitable business venture in Nigeria, then I will say you have what you are looking because palm kernel oil production is a good catch. Palm kernel oil production business in Nigeria is highly lucrative due to the numerous ways you can utilize palm kernel oil. The palm tree is a very important cash crop in Nigeria whose fruit produces two distinct oils.
Also read: How to start cassava flour processing business in Nigeria
Red palm oil is derived from the outer part of the fruit while palm kernel oil is gotten from the kernel itself. It will interest you to know that the demand for palm kernel oil is on the rise in Nigeria. This is so because palm kernel oil is a cheap source of oil for soap production, bio-fuel, cooking oil, margarine, ice cream, dough, etc.
Palm kernel cake which is a by-product of palm kernel oil production is a high fiber product used in the production of livestock feeds. When compared to other livestock feedstocks, it is ranked higher than cocoa pod husk and copra cake. Irrespective of the huge opportunities, there still exists a wide supply-demand gap in palm kernel oil production business. This provides a good market opportunity for you to cash in on this business venture.
As it stands currently in Nigeria, the price of palm kernel products is listed below
- Price of a ton of palm kernel nuts =N60,000
- A ton of palm kernel oil = N230,000
- The price of a ton of palm kernel =N30,000
If you have a 5ton per hour palm kernel oil production business, you can generate millions of Naira on a monthly basis.
Requirements For Starting Your Palm Kernel Oil Production Business In Nigeria
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Have A Good Business Plan
Before you venture into palm kernel oil production business, it is advisable that you get a well-detailed business plan on how you intend to go about your business. Your market analysis and feasibility study should be well specified in the business plan.
You can also use your business plan to seek for a loan as well as woo investors to invest in your palm kernel oil business. Without a comprehensive business plan, you have set out to fail even before you started your business venture.
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Site Location And Factory Establishment
You will need to choose a favorable location where you can set-up your palm kernel oil production business without any hindrance. If you already have a piece of land to set-up your factory, then the job is much easier. In a situation where you don’t have a land that is available, you can go for a lease or purchase one depending on financial capacity.
Once you have settled with the land issue, you then proceed to build a factory space that will house your palm kernel oil production equipment, raw materials, office, etc. depending on the size of your factory, with N1 million, you can build a relatively small factory.
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Your Business Registration
In order to make your palm kernel oil production business a legitimate venture, you will need to register it with the Corporate Affairs Commission (CAC). You either register a business name or a limited liability company. You can see our article on how to register your business with the CAC.
Also see: Why you should become an agribusiness entrepreneur in Nigeria
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Labour Force
While starting your palm kernel oil business in Nigeria, it is important that have a good plan to hire or employ capable hands in your business. Without an efficient and effective labour force, your business will definitely suffer from time to time.
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Machines And Equipment
Here are some of the machines and equipment you will need for your palm kernel oil production business in Nigeria. These machines include oil spiral press machine, oil filter, separator, palm kernel cracker, sludge presser, palm kernel roaster, oil storage tank, oil dispatch pump, and weighing machine.
With about N10 million, you can get locally fabricated palm kernel oil processing machines and equipment capable of giving you 5tons/hour. If you cannot buy the machines for the 5tons/hour due to your financial capacity, you can lower the production capacity to around 2tons or 3 tons.
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Raw Materials
The palm kernel nut is the major raw material needed in the palm kernel oil extraction business. You can source for the palm kernel from oil palm plantations. In Nigeria, you can purchase your palm kernel from Ebonyi, Ondo, Ekiti, Oyo, Abia, Anambra, etc. In the rainy season, the raw material is readily available.
Palm Kernel Oil Production Process
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Stage One
The first stage in palm kernel oil extraction process is the use of crushing machine to break the dried palm kernel nuts for easy oil extraction.
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Stage Two
In this stage, you will have to roast the palm kernel nut after crushing. This is done by passing the nuts through a kernel roasting machine.
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Stage Three
At this stage, you will have to expel the oil by passing the roasted kernel through an oil press that compresses the heated palm kernel nuts. The oil content is expelled through the oil exit chamber while the kernel cake goes straight to the cake exit chamber.
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Stage Four
At this stage, you collect and store the extracted palm kernel oil. You can then channel it into a storage tank for direct sales or further refining and purification.
Palm Kernel Oil Terminologies
- Palm kernel (PK) is the seed gotten after the production of palm oil
- Palm Kernel Oil (PKO) is the refined oil extracted from the palm kernel nuts
- Palm kernel Nut (PKN) is the nut that you get after breaking the hard shell of palm kernel
- Palm kernel cake (PKC) is the byproduct or residue of palm kernel oil extraction process. It is often used for the production of livestock feeds as a result of its high nutrient content.
- Palm kernel sludge (PKL) is also another sludge you get from the palm kernel oil production.
Conclusion
It is my belief that you have come to understand that the palm kernel oil extraction business in Nigeria is highly profitable. Locally, the demand for this oil is huge and with more capital, you can enter into the export business.
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