HOW TO START PALM KERNEL OIL EXTRACTION BUSINESS IN NIGERIA | BUSINESS PLAN

From observation, it is believed that you don’t know that you can make up to N150,000 and above daily from palm oil or kernel even as a small, medium or large scale producer? Are you aware that palm kernel oil product is one of the few products you can sell right at the point of production, without necessarily needing to take it to the market?

Note that depending on your financial capacity, it can be run in a small, medium and large scale. Most times you might wonder where a customer can get palm kernel in large quantity. It is produced in hundreds of thousands tones in the Eastern, Western and Southern parts of Nigeria annually using local and mechanized methods. All you need to do is to go set up a palm oil (edible oil) business around your location or you transport the product to your desired location and mill for processing or startup your own mill.

It is nonetheless most advantageous when you set it up where you can have access to Palm Kernel Nuts PKN in large quantity due to transportation costs and other logistics. Oyo, Ondo, Delta, Imo, Anambra, Enugu and Ebonyi states are good at the production of palm kernel too, so you may decide to source the raw materials from there if you’re within or outside these states.

Palm Kernel Nut (PKN) – This is the nut you get when a palm kernel’s hard shell is broken using manual or mechanized. That’s the nut where the palm oil we are talking about is extracted from.

Palm Kernel Oil (PKO) – This is the actual oil that is being extracted from palm kernel nuts (used for other production), the actual product or one of the main products we are explaining in this article.

Palm Kernel Cake (PKC) – This another product that is being derived from the palm kernel extraction process and it makes up good percentage of the palm kernel produce.

From our research and according to a reliable statistic, it is understood that in every 25 metric tons of good palm kernel nut one is expected to get 10 metric tons of Palm Kernel Oil (PKO) and another 13.5 metric tons of Palm Kernel Cake (PKC) as pure products. Below is how they are sold in the market:

The PKC – Palm Kernel Cake sold for N100,000 Naira per tonne.
The PKO – Palm Kernel Oil itself is sold for N120,000 Naira per tonne.
The Sludge is sold for N100,000 Naira per tonne.

Note that the cost of palm kernel is 80,000 Naira per tonne. You will require about 10 tones to be able to extract 5 tone of the oils as mentions above. 10 tone will then cost about N800,000 Naira. This will comfortably produce 5 tonnes of oil that will sells for N600,000 Naira. That’s not all, because you might think that you are losing N200,000 Naira but remember that it will also produce about4 tonnes of cake sells for N400,000 Naira while a ton of sludge sells for N100,000 each giving you a total N1,100,000 Naira (one million, one hundred thousand Naira) – Now you are making a good profit of N300,000 Naira only when you subtract the cost of the raw material (palm kernel) which is N800,000. You will be left with N300,000 Naira as gross profit on ten tons of palm kernel processed per day.

Just as stated in the beginning of this article, this is a lucrative business because in a week (6-7days), anyone in the business will be making a large sum of N300,000 X 6 = ₦1,800,000

This is article is for free for anyone who is interested in the business. Take your time and digest this article for a while and we believe that before the end of the day or by tomorrow you will decide to go into the business. But you startup this business or any other business, be sure to get a professional feasibility study and business plan. Use the RELATED article below or find what you are look for using search box on this site to search for more detail procedure of setting up a palm oil mill and process of production.