Feasibility Study On Palm Oil Production In Nigeria

Palm oil is a commodity that is widely consumed by Nigerians. There is an increasing demand for this product domestically. This may not be unconnected with the rise in population. Palm oil presents a lot of opportunities for business. For those interested in starting a palm oil venture or business, it is important that certain things are put in place. A feasibility study on palm oil production is one of those necessary requirements, hence the reason for this article.


Palm oil production especially its refining has largely been done using crude technology. Carrying out a feasibility study allows the investor to put resources (financial) where it will make the most impact (results). At the moment, no specialized skill is needed for the production of palm oil.


Low technology requirement significantly drops production costs. However, other factors which constitute the production costs are labor, transport of raw materials of which palm fruit clusters make up a significant part of and the hire or purchase of equipment.

Palm Oil Production in Nigeria

There are several procedures involved in palm oil production in Nigeria. But before this is possible, there has to be availability of the palm kernel fruit. These are gotten from palm trees. The production process begins from the harvest of ripe palm fruits. These are harvested and transported to the production factory where they are sorted and pressed. Pressing depends on the type of technology to be used. For hand pressed processing, although more laborious, most of the vitamins and nutrients contained in the palm fruit are retained. These include vitamin E and carotene.

Industrial palm oil production on the other hand strips the oil of its natural constituent features such as its odor. This is as a result of its being bleached and deodorized.

Equipment for Palm Oil Production

To start palm oil production, it is necessary that certain equipment be made available to make it possible for easy extraction of the oil from the palm fruit. To Start palm oil production in Nigeria, you will need the following equipment; a presser which has a cost ranging from N45,000 to N50,000, a digester with a price tag of N50,000 and a lister engine costing N150,000. Others include a cracker engine (N35,000), a filter (N1,000), boiler drum (N10,000), a separating knife (N600), and a boiling tank (N50,000).

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Marketing Plan

This is an important aspect of any business venture. Without proper arrangements for effective marketing, a palm oil business may not witness any meaningful patronage. Palm oil production requires an elaborate marketing strategy that will ensure that end products reaches the widest available market. This aspect should be paid serious attention to, as it can determine the profitability or otherwise of the business. A comprehensive marketing plan will result in an increased profitability which is the main goad of every business.

The Market Competition

This should form an important consideration of any palm oil business. Knowing your competition will enable the business put in the best strategy to effectively compete. This Therefore is a necessary ingredient that determines the profitability of the business. Nigeria is a country where this product (palm oil) is used in every community. Knowing the marketing strategies to use in reaching out to consumers from all parts of the country is therefore very necessary. Other competitors exist, knowing the areas of their weakness, will be of immense benefit to the business.

Availability of Raw Materials

The availability of raw materials is a necessity for the survival of any business. This is true for palm oil production. The main raw material for the production of palm oil is the palm fruit. Siting a palm oil producing business close to a palm tree plantation is therefore very necessary to the success and continuity of the business enterprise. Feasibility is all about checking if an activity (in this case a palm oil business) can be done. This is the central focus of this article to highlight areas that justify the establishment of a business.




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