Setting Up Integrated Palm Oil Mill

There is need for Nigerians to think of those products in which they have competitive advantage over other parts of the world. Through this global advantage the nation will look for how to develop them, through establishment of small, medium and large scale production and processing plants.

Through this approach more jobs will be created, self – sustenance of the nation, provision for industrial raw materials and export base will be increased.

In the fifties and sixties, Nigeria was a leading world producer of palm producer but she is today a net importer. Various efforts have been made recently by private individuals and government agencies to resuscitate the production of red oil by embarking on palm tree planting. Today the cost of palm oil isn’t within reach of the average Nigerian. Its supply is by far below its demand and yet a lot of palm fruits are wasting. Aggressive entrepreneurs can exploit this opportunity by embarking on the processing of palm oil.

Palm oil is used domestically for cooking and frying and industrially for the manufacture of margarine, drugs, soaps, cosmetics, and as raw material input for deodorized vegetable oil. Palm kernel, a major by-product of the mill, has lots of industrial uses while palm kernel shells serve as a source of energy for small industrial concerns.

Today, Malaysia is the world leader in the production and international marketer of palm oil, a country that took its first “tenera variety” from Nigeria.
The stagnation of palm plantation development; the domestic consumption and the growing industrial demand for palm oil and other factors account for the continued supply-demand gap.

The high price signals a lucrative investment in the sub-sector for anyone who ventures into palm oil milling on small, medium or large scale.
Fresh palm fruits are available for the ventures just like the industrial users await the oil extraction.

Harvested fresh fruit bunches (ffb) are obtained from wild palm growers or small-holder plantations or estates scattered all over the rain forest belt of the country. For anyone contemplating a mill of higher output, however, incorporating one’s palm plantation is very essential.

There are mills of different capacities, costs and life spans. The least modern, mills 2.4 metric tons of ffb per day of eight hours, requires only seven workers, and can be powered by an 8-hp engine which takes away the drudgery of the slow traditional method. The main components of the equipment are the stripper, boiler, digester, clarifier, water pump tank and spares. They all are obtainable locally at reasonable prices. There are more sophisticated imported machines that will be introduced to prospective investors for investment decisions.
A bottle of oil in the market today sells for between N150 and N300. The concept in this proposed project is to package the product in P.E.T bottles corked, labelled and market. There are also industrial marketing opportunities. In this case there will be need to package with drums and sell in tones. Details will be given to prospective investors.

The project above can be funded wholly by individuals, a co-operative societies, few friends, NARCB, State governments etc under the agricultural or small and Medium scale loan scheme.
The Central Bank of Nigeria, as part of the efforts to unlock the potential of the real sector to engender output growth, value added productivity and job creation has established a N500 billion Real Sector Support Facility. The Facility will be used to support large enterprises for start-ups and expansion financing needs of N500 million up to a maximum of N10.0 billion. There is also Anchor Agricultural projects funding arrangement.

This is a profitable agricultural project that will readily attract financial assistance. The machinery and raw materials needed for implementation are readily available locally and production technique is simple. Investors are advised to embark on this project.
To be able to determine the actual cost involvement, any prospective investor is advised to approach experienced industrial projects development consultants such as the writer for proper education and guidance.

To handle the implementation of this project professionally, prospective investors should embark upon a detailed and bankable feasibility studies. The writer is readily available for the feasibility studies and packaging of a bankable feasibility studies reports/ business plans. After which the construction of the factory will take place followed by procurement and installations of all the required machinery and other basic assets.

The writer will guide prospective investors professionally to ensure that good packaging, quality products and efficient/effective management is installed for profits. The writer will also assist in the sourcing of the required funds (where necessary) and obtaining NAFDAC approval. For details contact the writer

Estimated Project Cost
The total estimated cost for the mill is N35, 250,000 broken down as follows:
Land and land development      3,500
Machinery and equipment         18,500
Furniture and fixtures               550
Other fixed costs                      4, 500
Working capital requirement      7,500
Preliminary expenses               1,200
Contingency provision              4,000
Note that Mills of higher capacity will cost more than is estimated above.

Uba can be reached on 08034494437; e-mail:

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