How To Start A Palm Oil Business spronet blog

How To Start A Palm Oil Business

Palm Oil Business

Nigeria was the number one producer of palm oil in the 1960s. She was controlling over 43% of the global market. Malaysia, the world’s largest producer of palm oil today generates about 36.87 billion Malaysian ringgit.

Palm oil is a national treasure.

It is a product derived from the mesocarp (reddish pulp) of palm fruit and plays a significant role in the food and beauty industry.

Are you’re considering starting a palm oil business? We have highlighted certain things you should know.

How To Start A Palm Oil Business

The palm oil business is a very profiting one. Almost every home in Nigeria utilizes it to prepare dishes such as soup, stew, porridge, beans, rice, etc. It is a market that won’t cease due to it’s high demand.

Listed below are steps to take:

Make a business plan for your Palm oil Business:

Do you want to be involved in the production and distribution? Or, do you want to only be engaged in buying and selling of palm oil?

A business plan defines the business’ objectives and how to achieve them. It is very important and strategic for entrepreneurs.

Business plans don’t just outline specific steps to take, but also how to take them.

If you’re a bit confused on how to go about this, you can solicit advice from a professional who has been in the business.

Choose a niche for your Palm Oil Business:

You can choose a niche based on the amount of capital you have available. You can go into the business as a producer, wholesaler, or retailer.

A producer is involved in the production process. He or she might or might not be directly engaged in the palm oil processing. A producer might also decide to distribute directly to customers. Majorly, producers sell to wholesalers.

A wholesaler gets the palm oil directly from the manufacturer, and sells to the retailer. While, the retailer purchases the products from the wholesaler and sells it to the consumers.

Either way, you’re bound to make money.

Ensure You have the required capital:

It is important to secure your capital before starting the business.

As a wholesaler, you will need about 500,000 naira.
As a retailer, you will need about 250,000 naira.
As a producer, you might need to purchase a palm plantation. You can also buy a land, plant palm fruit, and allow it to grow overtime.

You’ll need to have the right Equipment for your Palm Oil Business:

On a larger scale, machinery comprises palm oil cracker, palm kernel separator, palm oil press machine, palm oil refining machine, oil filter, oil storage tank, oil dispatch pump and weighing machine. Roughly 3-10 million naira can get you these equipment.

On a smaller scale, items needed are kegs of different sizes, funnels and hose. As a wholesaler or retailer, you will need kegs to sell to your customers.

Choose a good location:

For wholesalers and retailers, you will require a shop or store to sell your products. Select a location that is easily accessible to people. Easy accessibility equates higher sales.

Another thing to put into consideration is the condition of the shop. A larger space gives room for more storage. Also, palm oil products are sensitive and as such should be kept in a cool and dry environment. They shouldn’t be exposed to heat or sun.

Are you considering going into a large scale business? get a location that:

Has constant power supply.
Has access to water.
Has good transportation charge. Site must be ideal for raw material and product transportation.

Hire workforce:

This is crucial for large scale businesses. Manpower is needed to carry out specific tasks such as cracking of the palm fruit, boiling of the raw material and packaging into kegs or containers. This allows for a smoother and more effective business. Administrative positions might also be needed.


Buy palm oil and start selling/ Begin palm oil production:

Wholesalers/Retailers. Get a trusted supplier to buy oil from and start selling. We advise working with more than one person, to avoid a delay in distribution.

Producers. When you have a location, the required machinery, man power, and a registered business, you can begin oil production.

Processing Of Palm Oil Locally

You might not have all the equipment, but you’re interested in palm oil production. Don’t worry, we have you covered.

Following these steps, you can produce your own palm oil without heavy machinery.

your palm fruit ready:

Palm fruit is the raw material in palm oil production. Palm fruit can be purchased from a local market, or directly from a farmer. Palm fruits are gotten from palm trees.

The biggest palm farms in Nigeria are Ada Palm in Imo State, Omoku Oil  Palm Plantation, and Akwa Ibom Palm Plantation.

Boil palm fruit:

Pre-soak the palm fruit for about 24 hours. After this, wash and put on fire. Add some amount of water. Boil for 30 minutes to 1 hour. Fruit cooking weakens the structure, softening it and making it easier to detach the flesh of fruit from shell. Boiling also destroys enzymes that can damage oil yields.

Grind the palm fruit:

After boiling the fruit for about an hour, the next step is to crush it.

Place the palm fruit in a grinder. Cover the lid of the machine and allow it to grind for a while.

The end product of this is thickened fiber and palm kernel.

Separate fiber and palm kernel:

Separate fiber from palm kernel. Place the fiber obtained from the grinded palm kernel in one bowl and the palm kernel that didn’t grind in another bowl.

Boil fiber:

Place the fiber in pot and then place on fire. Add water till it is above the fiber. Keep turning so it doesn’t burn

Salvage palm kernel:

Also, place separated palm kernel in a bowl and add water. Nothing is a waste. There is still oil on it.

Sieve and scoop oil from the bowl.

Pour the salvaged oil into boiling pot of palm fruit fiber.

Use a sieve:

Pour oil obtained from pot into sieve. The aim of this is to prevent certain impurities from entering the oil.

Continue process until all oil has been sieved. Then, allow to cool.

Voila! You have your palm oil ready for personal or commercial use. Practice makes perfect, and with constant practice, you can become a pro.

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