PALM KERNEL OIL PRODUCTION BUSINESS PLAN

The Palm Tree is a rich plant that contains many products of commercial value. From the Palm Tree, you can get palm fronds, palm wine, and palm nuts. The palm nuts can be processed to produce palm oil, a popular cooking oil; kernels are the by-products.

These kernels can be eaten that way or processed further to produce Palm Kernel Oil. This is a very important product used in industries for producing all kinds of things including soaps. It's quite expensive compared to other kinds of oil and in high demand. So if you picked Palm Kernel Oil Production as your business of interest, you made a very lucrative choice.

In this article, we will guide you through the process of setting up a palm kernel oil business and potential challenges to expect.

A business plan for palm kernel oil production

Like any other business, starting your own palm kernel oil production plant requires a well thought out business plan. Here are the steps you need to consider for your own business plan:

Get yourself a good business proposal. Every good business plan should contain the practical analysis of the market, financial summaries, as well as other details necessary for starting your own palm kernel oil production.

 Take your time to do the necessary research, look into your competition and do not leave any stone unturned.

Secure funds for your start-up. Without funds, your business will remain only an idea. Getting the necessary funds is very important for starting a business. Make sure you have the right amount ready or find sources that can lend/gift/invest money for your enterprise. 

The amount itself depends on the size of production you have in mind, but be prepared to set aside a few hundreds of thousand naira even for the smallest plant.

Find a good location. Probably one of the most essential elements of this business plan is finding a good location for your plant. 

When choosing the place, you should consider the availability of raw material for your production, as well as the closeness to your target market (which might be an actual physical market).

Get a machine that extracts the oil from the palm kernel. 

If you want to start your own palm kernel oil production business, you will obviously need some machinery that will clean, screw press, break, filter and store your product. Getting a high-quality machine right away will save you the money you would need to spend on maintenance for a cheaper machine.

Hire qualified and competent staff. You will most likely not be able to handle everything yourself, which is why you need to hire some staff. Find qualified people to work in production, quality control, technical assistance, administration, and security, so that you have all of the bases covered.

Think of management and marketing strategies. How are you going to sell your product? What will you do to make it stand out? Where are you going to sell it? Consider all of these things before getting into the whole thing. Map a clear thought out market strategy.

Once you have thoroughly researched all of the aforementioned points, you should be ready to start your business.

Challenges In Production Of Palm Kernel Oil

Below are some of the challenges to expect when setting up your palm kernel oil production business.

1) The extraction of palm kernel oil is a capital-oriented business. This means that both the extraction machine and the design of your plant will account for a major part of your investment. Therefore, you will need a stable source of money at first before you start earning profits from your business.

2) As mentioned earlier, you will certainly not be able to handle everything alone, which means that you will need to hire professionals/staff for every stage of the processing and production. 

The quality of your product (and the profitability of the whole venture) will heavily depend on the people who work for you (and the equipment they have to work with). So try not to cut corners in this area as this can make or mar your business.

Palm kernel oil is in high demand in Nigeria and abroad, so getting in on its production is a great idea.