How To Make Millions From The Palm Oil Business In Nigeria

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How To Make Money From The Palm Oil Business | Image Source: www.eco-business.com

As the world’s attention stays heavily focused on energy and technology, the few entrepreneurs who focus on large scale agriculture are reaping good profits from their investments. The agricultural business ecosystem is widespread, because of the hundreds and possibly thousands of various crop types that can be grown and sold as an income stream.

In the lot of these possible agricultural segments lies a profitable niche that only a few would dare venture into. This is the palm oil business.

Growing, buying, and selling palm oil products is a highly profitable agricultural business for any new and existing farmer, or agriculture entrepreneur to venture into. The potential in this venture makes the palm oil business one of the largest income streams for the eastern part of Nigeria, and several other developing countries in the world.

This detailed business plan for a palm oil business, will show you how to grow, buy, and sell palm oil products in Nigeria, India, or anywhere else in the world.

See Also: 15 Profitable Small Business ideas for Beginners In 2016

First, is there a demand for palm oil products in Africa? Who uses palm oil products anyway?

Palm oil products have diverse uses in various parts of the world, and come in different forms such as; red palm oil, groundnut palm oil, and several others.

Palm oil products can be used in the pharmaceutical and cosmetic industry, and in the production of water treatment products and drilling fluids. It is also used in the production of lubricants, soaps, candles, detergents, as feedstock for biodiesel, and as an alternative to various mineral oils used in power stations.

Aside from products that cannot be used in any edible form, palm oil products can be used in making margarine, condensed milk, ice cream, preparation of meals, and various other edible commodities.

These diverse uses and high demand for palm oil products, contribute to the high growth of the palm oil business industry in various parts of the world.

See Also: 5 Important Reasons You Must Invest In Agriculture In Nigeria Now

The Various Business Ideas And Opportunities In Palm Oil Production:

1). Bulk Purchase & Resale Of Palm Oil Products:

In this model, the palm oil trader purchases palm oil products when the prices are low; usually during the harvest season between March and May, stocks the palm oil products, then resells them during the off-harvest season.

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During this period, the supply of the commodity in the market is relatively low, and as scarcity kicks in, the price of the palm oil products begin to rise, then you can reap larger returns on your investment; sometimes around slightly over 100%. But periodically.

The palm oil products can be bought from local farmers during the harvest period, and preserved in various storage facilities, before they’re eventually transported for resale in the cities, or other communities.

Palm oil products purchased for resale, could also be exported to various locations such as China, and Singapore, to mention a few.

See Also: How To Start A Cassava Farm In Nigeria: A Comprehensive Business Plan

2). Setting Up And Growing A Palm Oil Plantation:

Growing palm trees can sometimes be the best approach for a palm oil entrepreneur with a long term vision. Since West Africa is a rich region for a full and nourished maturity of palm oil products, setting up a palm oil plantation for high quality crop growth would be a great idea.

Image Source: www.palmoilextractionmachine.com

The business opportunities that lie in the palm oil business sector in Africa is vast and wide because, far lesser growth and processing of palm oil products in a commercial scale happen in the region than expected. This large empty demand for more producers advertises a great opportunity for would-be agricultural entrepreneurs to take advantage of.

With an abundance of rain, more than adequate sunshine, and largely fertile soil in the African continent, growing and processing palm oil products can only get a lot better.

When the oil palms are cultivated, the fruits are crushed to produce palm oil. The white inner kernel inside the seed of the palm oil fruit can be further crushed to produce palm kernel oil, which has hundreds of uses.

Before you start a palm oil plantation, it’s important you know that it would require significant investment, the right fertile farmland to grow your palm trees, and a patient mind because the Return On Investment (ROI) is far in the future.

See Also: How To Start A Profitable Poultry Farming Business In Nigeria

3). Palm Oil Processing Plant:

While there are palm oil farmers and buyers, there’re also the palm oil processors. These businesses are those that process the fruits to various forms for use in households, factories, and more.

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Large mills can be used to process the palm fruits into palm oil with little human effort. This saves both time and energy for the farmers and the processors.

Although there are more traditional ways to process the palm fruits into palm oil, using modern machinery makes the effort seamless, and speeds up the entire process.

You could either purchase the palm oil mills for rent to various farmers and processors who need it’s use, or you could purchase your own palm fruits from the farmers directly, process them with your mills, then prepare them for export, or sell them to the final consumers in the cities and villages. This method maximises your profits, and enables you to completely control the time your products make it to the market.

See Also: How To Market Your Farm Products In Nigeria: 10 Ways To Get Distributors

These various business opportunities in the palm oil business industry can be a benchmark for any entrepreneur aspiring to invest in agriculture, to start off with.

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What are your thoughts on the agricultural palm oil business sector? Please let me know by leaving a comment in the box below.