Gone are the days when agriculture or agriculture related business was looked down upon, now, agric business has been making waves especially palm oil business which has been proven time with out number as a profitable venture.
If entrepreneur can follow due process it will continue to be a money printing machine since oil palm have high life span and demand for oil continue to wax stronger.
Palm oil is a vegetable extract from palm kernel. It’s reddish colour and low viscosity make it suitable for cooking. If leave for some time it can get thickened.
Uses of palm oil
The reason for oil palm business lucrativeness is because of it many usefulness, though many people don’t know it uses beyond cooking.
Below are the uses of oil palm.
Production of soap
Prevention of Cancer and vitamin A deficiency
Production of animal feed
Production of drugs
What you need to make available before starting palm oil business
Money is the life of business, you need to secure capital either from personal savings, friends and family or from investor.
The amount of capital needed depend on the scale of operation. Below are the cost you need to take notice of when seeking for capital.
Employee hiring cost
Cost of seedlings.
Get a suitable land that befits oil production and make sure it is not far from good road network.
Hire those that have passion for agric business and when hiring manager or supervisor hire base on level of experience, this will put your business in good hand, since you might not have experience in oil palm business.
For any business to be profitable entrepreneur must be resilient. Some time business won’t go the way you plan you must be able to stand up and face any failure.
How profitable is palm oil business
Profitability of oil palm business depend on the age of palm tree.
If your palm trees are up to 8 years old, you should expect noting less down 9 tons of palm oil per hectare. The yield will continue until 16 years of age when it start to decline.
Type of palm oil business
There are three part of oil palm business you can invest in. If you have enough capital and skill personnel on ground you can start the three at the same time if not select one of the tree and expand to other later.
Oil palm plantation
This is capital intensive and require large expense of land. It also require patient, if you plant improved seed you will wait for 2 – 3 years, if it is local seed you will wait for 5-8 years before you can start harvesting palm kernel.
The business model is simple plant improved oil palm seed Sell it to oil palm extraction company.
It is advisable to start with less down 1000 seedling which cost #200 per seed and make sure you plant improved seed you don’t want to wait for 8 years before ripping the fruit of your labour.
Also local seed can easily be attacked by pest and disease which increase the risk of oil palm business.
Palm oil extraction plant
Setting up palm oil extraction plant is also expensive, but doesn’t require large expense of land. You will have to buy milling machine with which you will use to extract oil.
Unlike oil palm plantation which has one business model, here you have two model you can set up the extraction plant and help people to extracts or you can produce oil to final consumer.
Whatever model you choose make sure your location is suitable for it. If you are n in environment that needed oil palm extraction badly you can rent out your plant, if not it is better you produce plan oil and sell to wholesaler or final consumer.
Selling of palm oil
This is the easiest and not expensive to set up, the business model is also easy you buy in large quantities from oil extraction plant and sell to final consumer.
The only problem here is transportation which you need to factor into your cost before starting, you don’t want a situation where your transportation cost will eat up your profit.
Write your business plan
Business plan tell you what you need to do to reach a miles stone every week, every month and every year, also it is the first document that your financial institutions and investors will require in case you need loan or investment respectively.
Register with CAC
Before customer and partners can take you serious you need to register your business with Corporate affairs commission. Also to avoid confrontation with authority later you need to register your business.
You need to set up storage, this where you will keep your palm kernel and processed palm oil before selling it.
Also if you will like to make more money from oil palm business you need to be able to hold your oil for some time and sell when it is in high demand.
For those that could not take all the chain of oil palm business I.e palm plantation, oil palm extraction and palm oil selling. You need to make connection with as many supplier as possible to avoid disappointment.
Below are the state with the largest oil palm production in Nigeria, you can start making connection from there
Akwa Ibom state
Transportation is one of the important factor of palm oil business, you need to find commercial vehicle that will transport your palm oil with moderate price. If you can not find one ask your suppliers, they will surely connect you with one.
You should not have problems here if you do your research before stating palm oil business. Nevertheless plan oil is always in demand or can a day pass without people eating.
You just need to find your own customer. You can do this by marketing your palm oil through this marketing channel
World of mouth ( effective if your palm oil is good)
Branding ( buaines card, logo, stickers)
Below are the company you can sell your palm oil to in Nigeria
Planet Oil and Chemical Industries Ltd
Location: Abia state
Sunny Oil Nigeria Ltd
Location: Mush, Lagos
Phemson Nigeria Limited
OM Oil Industries Ltd
Location: Ikeja, Lagos
It is easy to make fortune in palm oil business if all the above steps can be follow.