How to Start Palm Oil Business in Nigeria – The increasing rate of unemployment in Nigeria has made people resort to other reasonable ways to earn a living in the country. Palm oil business is a cool way to earn money as a Nigerian. The increase in the demand for palm oil is because almost every household needs it to cook. In this article, you will learn all you need to know concerning the palm oil business in Nigeria and how you can be able to start it.
Is Palm Oil Business Lucrative in Nigeria?
The palm oil can give a yield estimated per hectare at up to 8 tons per year ( at most). In addition, the profit that farmers may most likely gain per hectare is approximately 3.4tons per year.
How to Process Palm Oil?
Processing palm oil is not too hard a task especially if you have the right machinery. You can produce palm oil from palm fruits through a special type of extraction process. Basically, when starting from scratch, you need to first plant palm fruit seedlings and then you can harvest the bunches/palm fruits once they are ripe.
Thereafter, abide by the below steps to process the harvested fruit:
- Firstly, you should thresh the palm fruit and then sterilize them to pick-out the palm fruits from them. Then you cook the palm fruit till it gets soft. Mechanical processing might just require you to get the palm fruit and all other processes are automated.
- Next, you will have to crush the palm fruits to extract the crude palm oil. Then cook the extract for sometime till the water from processing is dried up. You can extract the palm oil at this stage.
- You may also purify the raw palm oil and you can also dry it before you can sell it off or you can make use of it at home etc. Also, you can choose to export it to other countries.
How Can I Start Palm Oil Business in Nigeria ?
1. First Put Down a Palm Oil Business Plan
Crafting a palm oil business plan is the first thing to do if you want to begin a successful palm oil business in Nigeria. The business plan may cover engagement in both palm oil production and farming. This is for persons who already posses an oil palm plantation, whether inherited or persons that have purchased the plantation.
In addition, the business plan can only have its target on the oil palm business which includes the purchase of the raw materials and selling of palm oil, if you are not an owner of a plantation. Crafting a business strategy is necessary in this business, especially if you intend to dive into the market significantly.
2. Be Very Much Aware of the Type of Palm Oil Business to Get into
In Nigeria, there are wide varieties of palm oil businesses to start. You can start your own palm oil business as a farmer where you are the owner of an oil plantation and you will be the one to harvest and produce your own palm oil. Here you can be operating as a wholesaler of palm oil, or you are simply a retailer of palm oil.
So, based on the funds you have in hand and the kind of business that is easiest for you, you can choose one of the business types. Even as an exporter, you can also be part of the palm oil industry.
3. Prepare the Needed Capital for the Palm Oil Business
Before you even think of starting your business, it is usually a better option that you have your finances in order. You should try as much as possible to avoid borrowing, either from your bank or from your family and friends. For better utilization, you can always save up the important amount of capital. It could be up to six months, a year, or even more than one year to save but you don’t have to rush anything. Your capital depends on your income and it determines the size of your business.
4. Purchase The Required Equipment for the Palm Oil Business
To make sure that your palm oil business is profitable, you may be needing some tools. These tools are different size of kegs, funnels, hoses, as well as other equipments. Although you may always buy your palm oil together with the kegs, you will need extra kegs when you want to sell the palm oil to your clients, thus you need to still purchase this equipment.
5. Open Shop/Store to Sell Palm Oil
You may be needing a warehouse for your palm oil business if you kind is a wholesale level and you will need a shop if yours is in retails. There are a wide range of factors to consider when you are choosing a shop or store for a profitable palm oil business.
- You should think about the location where your shop will be.
- you should think about the capital at hand to see for the shop’s rent. But If you want to become a distributor of palm oil and you ain’t able to afford a store, you can make use a space in your house and sell it from the home store.
6. Buy Palm Oil and Start Marketing your Business
Once you’ve finished all the above mentioned steps. Next, thing you should do is to buy as many kegs of palm oil as you can afford and begin selling. Oil-producing states to get cheaper palm oil compared to other states are Ondo, Ogun, Imo, Abia, Enugu, Delta, Cross River, Oyo, including Bayelsa State. These are good places to purchase palm oil in bulk.
On the other hand, Ondo state is where almost all the palm oil vendors get their oil from. You can order the quantity of palm oil you can afford online and have it delivered to your state.
7. Start Making Profits from the Palm Oil Business
In Nigeria, there are varieties of ways that you can profit from your red oil business. You may begin to run promotions for your business and sell your palm oil online in Nigeria on some of the popular e-commerce platforms. You can also take your palm oil to a local market to sell to retailers or you wait when clients place orders then you can transport the product to their doorsteps. Customers will definitely resort to buying from you when you offer them better qualities.
What Are the Uses of Palm Oil
Many people know palm oil to be used for household cooking. And apart from being used for cooking, palm oil can be employed in;
- It works to prevent vitamin A deficiency, cancer, brain disease, and aging. It is also used in the production of soap, cosmetic, exfoliation cream, margarine, body cream etc
- Relief of stomach pain and in the production of drugs
- Used in treating malaria, high blood pressure, high level of cholesterol, dementia, to mention but a few. It also works to quicken weight loss and for improving the body’s metabolism
- It is also used in water treatment
- Used in the production of dog and other domestic animal food
- It is used in the preservation of food
What is the Season For Production of Palm Oil?
The production season of palm oil varied depending on the country. In Nigeria, the production season is during rainy seasons. Rainy season is the best time to plant palm fruit. This is basically around June to September. Also, palm tree starts to produce fruit up to 3 to 4 years after it is planted. Therefore, it is important that you exercise a good level of patience during their growth & maturation period.
Conclusion
Palm oil business is a cool way to earn money as a Nigerian. You want to make more profit in your business? You can try taking your palm oil to a local market to sell to retailers or you wait when clients place orders then you can transport the product to their doorsteps. Customers will definitely resort to buying from you when you offer them better qualities. Its not to late to start!
Frequently Asked Questions
Through bulk Trading of Palm Oil
The price is not stable, but usually it sells at ₦33,049.00 per 1 keg
Reference
- https://www.investsmall.co/palm-oil-business-in-nigeria/amp/
- https://www.makemoney.ng/how-to-start-palm-oil-business-in-nigeria/
- https://utibeetim.com/step-by-step-on-how-to-start-palm-oil-supply-business/
- https://www.entrepreneurs.ng/palm-oil-business/
- https://businesselitesafrica.com/2022/08/22/how-to-start-a-palm-oil-business/
- https://theinfoworth.com/palm-oil-business-nigeria/
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