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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![Small business owners and entrepreneurs are known to be very busy people always having so many things on their schedule. If they are not attending to clients and customers, they would be busy marketing/advertising their products and services. In the bid to spread their brands, take part in the selling process or tackle management issues, many small business people disregard the legal requirements of operating a business and make a lot of avoidable legal mistakes. They fail to realize that legal missteps are one of the top reasons for business failure. As you might have known already, IGNORANCE IS NO DEFENCE (IN THE COURT OF LAW)! For small businesses, especially in critical sectors like medical care, food, e-commerce, and insurance, it is very crucial to focus on the legal aspects of running a business. This is because not knowing these legal requirements or obligations can bring down a startup and as a business owner, you do not want that to happen to you. In this article, I discuss ten (10) common legal mistakes you should avoid as a small business owner. 10 Common Legal Mistakes Small Business Owners And Entrepreneurs Make and how to Avoid Them. (1) Not using a lawyer. A lot of small business owners and entrepreneurs believe that they do not need to involve the services of an attorney at the start of the business like the bigger entrepreneurs do. They believe that legal issues will only emerge when their business becomes bigger, so they can get a lawyer later. This is an enormous mistake that can cost you a large amount of money if not your organization. So it is better you get an attorney before you launched your business, irrespective of the scale of the business. The lawyer would help you to understand the legal obligations and requirements of your business and how to go about it properly. Speaking on this, Ramzy Ladah, the CEO of Ladah Law once said, 'A lot of soloenterprenuers and partnerships mistakenly believe that they do not have the same legal obligations that bigger enterprises have. They believe that legal issues will only arise as they scale, and they can always bring in an attorney later on. This is a huge mistake and one that can cost you your company, if not buckets of money. Get a lawyer before launch, and let him or her get you set up correctly from the beginning.' (2) Not Tracking Expenses. Another legal mistake commonly made by small business owner and entrepreneurs is not keeping track of their small or large expenses throughout the year. Most business owners only try to collect receipts when tax returns are to be filed. Hence, what is not documented is not deduced thereby leaving money in the open. There are many ways approaches to keeping records of expenses. Entities should hire professional accountants for stock, inventory management. This will help to curtail a business’s expenses if the volumes are quite high. (3) Not Having “Terms and Conditions” To Which Customers Agree To Be Bound. Term and conditions policies often regarded as “Terms of Use” or “Terms of Services” are a set of policies that explain what your business expects from your customers and what the customers can expect from your business/company. If your business does not have this policy written and published for customers to read before making a purchase, then you'll end up spending a lot of money to resolve issues between you and your customers if such arise in future. (4) Failure to Have a Privacy Policy. According to, www.privacypolicy.com, A privacy policy is a legal document that includes information on how a company collects handles and processes data of its customers. It simply describes whether information about customers is kept confidential or shared with third parties. As such, you have to inform your customers before sharing their contact information like their email, phone numbers and biometric data with another company. A privacy policy must be disseminated publicly. (5) Lack of Documentation. Most small businesses do not keep documents of what has happened in their company. This can break a crucial deal of business and cause issues to mount up in future. You must have a register to keep records of all interactions in the business. This amongst other advantages helps to keep you and your business in check, expenditure-wise. For a comprehensive list of documents that your businesses must have to operate legally in Nigeria, please check my free report on essential legal documents every your businesses must have in Nigeria. (6) Lack of Compliance to Security Laws. Most small business owners and entrepreneurs usually issue shares to family members and close friends without complying with the specific laws usually in the haste to spread their brands. What many of these business owners do not know is that they did this Shares and other securities issued without following the specific disclosure and presentation requirement could lead to serious legal problems. You might want to avoid this in your business. (7) Not registering Your Business. As an entrepreneur, it is very crucial that you register your business because its importance can never be overemphasized. Registering your business gives you a unique identity, makes you look serious to your customers. As a matter of fact, you must your business must be registered with the appropriate organ of government, in this case the Corporate Affairs Commission (CAC) before you can obtain serious loans and get quality investors to invest in your business. Above all, registering your business projects you from personal liability. If you register a Limited Liability Company [LLC], make sure that you get a name verification before making a brand logo, banner, business card, or building a website. This is very important and a concrete legal requirement that you must meet. For details explanation of the process to get how to get Certificate of Business Incorporation for your business in Nigeria, please see this guide (8) Not Hiring Employees Correctly . In the bid to find the employees, many business owners end up not following the proper procedures for hiring the right employees. Recruiting ideal workers is a critical part of your achievement in business. Therefore, you must have proper documentation in place when hiring people. These include employee handbooks, benefit forms, offer letters, and operating procedures for jobs. While this might take you time to create, it will save you a lot of money, time and other valuables and offer protection to your business. (9) Mixing Personal and Business Expenses. Business and personal expenses often become indistinguishable for startups. This is one of the major sources of confusion for small businesses especially when taxes are filed in. This often leads to income authorities canceling various deductions on an ad hoc basis resulting in a higher tax expenditures levy. To avoid this, small business owners and entrepreneurs should have separate records and financial accounts from the beginning. (10) Reliance on One Key Customer. This is a great mistake made by most small business owners. They tend to rely on one key customer especially if the client is a government. This is very deadly as a change of government or policies can cost you a lot if not break your business. Even if the key client is not the government, the person or entity can fail in his/her/their business dealings which might lead to your failure too. Okay, let's wrap up… Starting a business is really intriguing yet challenging. While focusing in how to spread your brand, you should also take note not to make costly mistakes as you start. This is because if you avoid these mistakes, your business has more chances of moving smoothly from the beginning and growing steadily from there. But this doesn't mean your business will not experience problems. As a business owner, be ready to experience some little challenges here and there. As a business you should try as much as possible to comply with the legal requirements needed when starting a business. This will help you to avoid the majority of the legal mistakes which small (and even big) businesses make and the punitive measures that come with making these mistakes. With the right education, mentorship and advice like the one I give in this article, you will so well and surmount any challenges that might come your way. Talking of business education, I like you to see an article I published lately on business schools in Nigeria near you. You might want to enroll in any of the nearby business schools to widen your entrepreneurial and managerial horizon. Trust me, the benefits are grandiose., Small business owners and entrepreneurs are known to be very busy people always having so many things on their schedule. If they are not attending to clients and customers, they would be busy marketing/advertising their products and services. In the bid to spread their brands, take part in the selling process or tackle management issues, many small business people disregard the legal requirements of operating a business and make a lot of avoidable legal mistakes. They fail to realize that legal missteps are one of the top reasons for business failure. As you might have known already, IGNORANCE IS NO DEFENCE (IN THE COURT OF LAW)! For small businesses, especially in critical sectors like medical care, food, e-commerce, and insurance, it is very crucial to focus on the legal aspects of running a business. This is because not knowing these legal requirements or obligations can bring down a startup and as a business owner, you do not want that to happen to you. In this article, I discuss ten (10) common legal mistakes you should avoid as a small business owner. 10 Common Legal Mistakes Small Business Owners And Entrepreneurs Make and how to Avoid Them. (1) Not using a lawyer. A lot of small business owners and entrepreneurs believe that they do not need to involve the services of an attorney at the start of the business like the bigger entrepreneurs do. They believe that legal issues will only emerge when their business becomes bigger, so they can get a lawyer later. This is an enormous mistake that can cost you a large amount of money if not your organization. So it is better you get an attorney before you launched your business, irrespective of the scale of the business. The lawyer would help you to understand the legal obligations and requirements of your business and how to go about it properly. Speaking on this, Ramzy Ladah, the CEO of Ladah Law once said, 'A lot of soloenterprenuers and partnerships mistakenly believe that they do not have the same legal obligations that bigger enterprises have. They believe that legal issues will only arise as they scale, and they can always bring in an attorney later on. This is a huge mistake and one that can cost you your company, if not buckets of money. Get a lawyer before launch, and let him or her get you set up correctly from the beginning.' (2) Not Tracking Expenses. Another legal mistake commonly made by small business owner and entrepreneurs is not keeping track of their small or large expenses throughout the year. Most business owners only try to collect receipts when tax returns are to be filed. Hence, what is not documented is not deduced thereby leaving money in the open. There are many ways approaches to keeping records of expenses. Entities should hire professional accountants for stock, inventory management. This will help to curtail a business’s expenses if the volumes are quite high. (3) Not Having “Terms and Conditions” To Which Customers Agree To Be Bound. Term and conditions policies often regarded as “Terms of Use” or “Terms of Services” are a set of policies that explain what your business expects from your customers and what the customers can expect from your business/company. If your business does not have this policy written and published for customers to read before making a purchase, then you'll end up spending a lot of money to resolve issues between you and your customers if such arise in future. (4) Failure to Have a Privacy Policy. According to, www.privacypolicy.com, A privacy policy is a legal document that includes information on how a company collects handles and processes data of its customers. It simply describes whether information about customers is kept confidential or shared with third parties. As such, you have to inform your customers before sharing their contact information like their email, phone numbers and biometric data with another company. A privacy policy must be disseminated publicly. (5) Lack of Documentation. Most small businesses do not keep documents of what has happened in their company. This can break a crucial deal of business and cause issues to mount up in future. You must have a register to keep records of all interactions in the business. This amongst other advantages helps to keep you and your business in check, expenditure-wise. For a comprehensive list of documents that your businesses must have to operate legally in Nigeria, please check my free report on essential legal documents every your businesses must have in Nigeria. (6) Lack of Compliance to Security Laws. Most small business owners and entrepreneurs usually issue shares to family members and close friends without complying with the specific laws usually in the haste to spread their brands. What many of these business owners do not know is that they did this Shares and other securities issued without following the specific disclosure and presentation requirement could lead to serious legal problems. You might want to avoid this in your business. (7) Not registering Your Business. As an entrepreneur, it is very crucial that you register your business because its importance can never be overemphasized. Registering your business gives you a unique identity, makes you look serious to your customers. As a matter of fact, you must your business must be registered with the appropriate organ of government, in this case the Corporate Affairs Commission (CAC) before you can obtain serious loans and get quality investors to invest in your business. Above all, registering your business projects you from personal liability. If you register a Limited Liability Company [LLC], make sure that you get a name verification before making a brand logo, banner, business card, or building a website. This is very important and a concrete legal requirement that you must meet. For details explanation of the process to get how to get Certificate of Business Incorporation for your business in Nigeria, please see this guide (8) Not Hiring Employees Correctly . In the bid to find the employees, many business owners end up not following the proper procedures for hiring the right employees. Recruiting ideal workers is a critical part of your achievement in business. Therefore, you must have proper documentation in place when hiring people. These include employee handbooks, benefit forms, offer letters, and operating procedures for jobs. While this might take you time to create, it will save you a lot of money, time and other valuables and offer protection to your business. (9) Mixing Personal and Business Expenses. Business and personal expenses often become indistinguishable for startups. This is one of the major sources of confusion for small businesses especially when taxes are filed in. This often leads to income authorities canceling various deductions on an ad hoc basis resulting in a higher tax expenditures levy. To avoid this, small business owners and entrepreneurs should have separate records and financial accounts from the beginning. (10) Reliance on One Key Customer. This is a great mistake made by most small business owners. They tend to rely on one key customer especially if the client is a government. This is very deadly as a change of government or policies can cost you a lot if not break your business. Even if the key client is not the government, the person or entity can fail in his/her/their business dealings which might lead to your failure too. Okay, let's wrap up… Starting a business is really intriguing yet challenging. While focusing in how to spread your brand, you should also take note not to make costly mistakes as you start. This is because if you avoid these mistakes, your business has more chances of moving smoothly from the beginning and growing steadily from there. But this doesn't mean your business will not experience problems. As a business owner, be ready to experience some little challenges here and there. As a business you should try as much as possible to comply with the legal requirements needed when starting a business. This will help you to avoid the majority of the legal mistakes which small (and even big) businesses make and the punitive measures that come with making these mistakes. With the right education, mentorship and advice like the one I give in this article, you will so well and surmount any challenges that might come your way. Talking of business education, I like you to see an article I published lately on business schools in Nigeria near you. You might want to enroll in any of the nearby business schools to widen your entrepreneurial and managerial horizon. Trust me, the benefits are grandiose.](https://www.entorm.com/wp-content/uploads/2021/01/Legal-Requirements-When-Starting-Business-In-Nigeria-1-350x230.jpg)
