Palm Oil Business in Nigeria

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Palm oil business is one of the most lucrative businesses in Nigeria because of its diverse usefulness and level of profitability. In Nigeria, palm oil is one of the essential needs for cooking most meals. The interesting part of this business is that every part of the palm tree (fruits, leaves, trunks, and sap) is used for different things.

 Palm fruits are processed to produce palm oil, the leaves on the other hand are used for roofing homes in rural areas. While the popular palm wine which is the sap is a refreshing and widely loved beverage in Nigeria.

This article covers everything you need to know about starting and running a successful palm oil business in Nigeria. Additionally, you will also learn about the different areas of the business so you can choose the aspect works for you depending on your start-up capital.

Also please note that you must be ready to put in the work and determination if you really want to succed and remain in business for long because obstacles will definitely come your way.

The business can be started in various sides it could be production and retail.

Basic requirements to start the production side.

Capital

This is the money you need to begin your palm oil business. The cost to be factored into your capital should include:

  • Land acquisition or land rental cost
  • Cost of hiring employees
  • Farm maintenance cost
  • Cost of purchasing the seedlings
  • Processing machine cost
  • Cost of means of storage
  • Transportation cost.

After these have been met then you can move on to:

  • Planting trees.
  • Setting up an extraction mill.

Business plan.

Draft out a business plan that will guide your business transaction. While writing your business plan, you need to carry out a thorough feasibility study and market research to understand the nature of the business.

Learn about your competitions, the prevailing prices, and how and where to buy palm oil at a cheap rate. A business plan is a detailed document stating the short and long term objectives of your business and how to achieve them.

In writing your business plan, the following information should be included:

  • Executive Summary
  • Company Description
  • Team
  • SWOT Analysis
  • Market Analysis
  • Financial Analysis
  • Marketing Strategies
  • Competitive Analysis
  • Appendix

Registration.

Registering your business makes your customers trust you. To begin, run a name search on CAC’s portal to confirm if your chosen name has not been registered by another person. Thereafter, you can begin the registration process. With basic information like valid ID card, passport photograph, signature and personal details, you are good to go.

Storage.

Setting up a storage space is very important so you can store your oil palm products properly pending the time suppliers come for it.

Ensure the space is cool, safe, and dry.

Having kegs and drums is also essential to your proper storage.

Transportation.

It’s always best you have your own vehicle as a means of moving the products but if not it’s best you arrange with affordable and safe courier services or have your customers come pick them up.

Source for customers.

You need a solid marketing plan which should be part of your business plan to succeed in this business.

As a matter of fact, it is better to source for your would-be retailers before buying or processing your palm oil. This will give you a ready market when you are ready to sell.

You can find retailers amongst market sellers, cosmetologists, housewives, etc. To attract a larger customer base, you can explore other modes of marketing such as:

  • Online marketing (social media, google ad, etc)
  • Referral marketing
  • Newspaper marketing
  • Word of mouth
  • Collaboration/Partnership.

The retail or wholesale side.

One of the most important factors in this side of the business is customers and a reliable manufacturer.

Not much or really huge capital is needed some elements of the porduction side is needed like Buisness plan, customer sourcing, and transportation.

Storage is also needed if you will be selling at seasons like September up till December where the price will be on the high side.

Feel free to contribute and let us know what you think in the comments section below.