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    Investing in Palm Oil for Export

    26 Sep 2017

    According to Africa Investment Index, Nigeria is the 19th most attractive economy for investments flowing into the African continent. The Africa Investment Index 2016 report showed that Nigeria attracted a net Foreign Direct Investment of $3.1billion in 2015. Botswana was ranked the most attractive economy for investments flowing into the African continent followed by Morocco, Egypt, South Africa and Zambia.

    Following the decline in oil prices, which impacted various African oil producing nations, the federal government has intensified its efforts towards diversifying the economy and has laid out a road map to enhance public infrastructure and support high-growth sectors in the country such as manufacturing, ICT, agriculture, among others.

    Palm oil is known to be an excellent source of bio available calcium and least allergic of all edible oil available. The total demand of edible oil is 16,570,000 tones and supply is 13,326,000tonnes including the imported edible oil). The demand-supply gap thereby opens up an opportunity for investors in this sector.

    After thorough research in to the market, we found out that the demand for palm kernel oil, for commercial, home and even industrial purposes will continue to increase as the year progresses and this is the same for other by-products making it a lucrative business and that with rewarding income.

    Although there are few substitutes to replace palm oil, they cannot meet the high increase for its use in many years to come. Some of the industries include: Cosmetics, Food, Animal Feed, Soap Manufacturing, Confectioneries, and Bio-diesel among others.

    Operation Plan
    The two different type of production process will be employed. The operation of consists of different sections including; procurement and storage (i.e raw material store), production/processing floor and packaging phase. The finished products are distributed by the help of local distributor. The necessary equipment that will be used for this business includes; bunch thresher, boiler, nut and fibre separator, screw press, oil drums, funnels, gallons, scoopers, bowls, basins among others. The product packing line comprises of oil which will be packaged into 4-Litre Keg and 1Litre Keg for both palm oil and kernel oil.
    The business will require full time labor. The services of purchasing officers, drivers, warehouse officers, store officers, sales representatives, security personnel, and accountant will be needed. The cost of production will be low because 70% of the staff will be recruited from the community and the source of the raw materials for the mill is gotten from the natural endowment within the environment.

    Product and services
    • Refined palm oil
    • Crude palm oil
    • Refined palm kernel oil
    • Crude palm kernel oil
    • Palm kernel cake for animal feed production
    • Palm kernel sludge
    • Crushed palm kernel shell for bio-fuel

    Opportunities are unlimited. Palm oil is an economic product that is in high demand both for domestic and industrial use as well as palm kernel oil alongside with other by-products which are highly needed in the industries as a raw material for the production for different products. With the numerous untapped opportunities that lie behind palm kernel processing, our consultancy services will necessarily be required by upcoming investors also. The proposed location of the factory is an important important decision to make.

    Marketing Strategy
    The numerous processing industries as well as local sellers located in the proposed area of the plant are the first targeted customers. Promoters will increase the production and the sales of palm produce in its environment, outside the state, expanding across West Africa and Africa as a whole. For the few competitors in palm oil processing and distribution companies, strategic plans will be on ground to surmount any pressure that might arise.

    Sales Forecast
    A sales forecast is very important for the growth of any business as it helps to have right predictions about the sales of products. From the result we gathered from our studies based on the opportunities of the in the industry. Our sales forecast have shown that palm fruit processing business is going to be profitable in its first year of starting
    Palm fruit processing in Nigeria has peak and off-peak seasons and so to account for its availability throughout the year, 50% of the product will be stored in the ware house, and 50% will be distributed to satisfy the immediate market while the product in the warehouse will be sold during off-peak seasons.

    Marketing Plans
    There will be strategic plans on ground to ensure the best distribution network for easy access of the product by the final consumer. A team of proficient marketing professionals and sales forces will be recruited to create public awareness of the products and to facilitate integrated marketing communication between the mill and its target market. Communication to the public will be through advertisement, public relations, sale promotion and publicity as well as both online and offline advertisement to enhance sales among others.

    Again the industry will make use of customer based pricing strategy. It will also emphasize on quantity discount as a pricing strategy. The sales representatives and agents will be used instead of middlemen to avoid hoarding of the products, excessive price hike and low customer’s satisfaction.

    Financial Projections
    Part of the financing and funding of the project will come from stakeholders of the promoters and counterpart funding from financial institutions in form of loans. Revenue from the industry will be re-invested into the business while making its loan repayment a top priority.

    The raw materials, labor and all other required inputs are locally available. All other essential details including accommodation, manpower, production technology, packaging and marketing will be embodied in a bankable and comprehensive feasibility report for prospective investor.
    Prospective investors can start very small and gradually grow.

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