Many opportunities abound in the palm oil business in Africa. This business is multifaceted and each facet is making a lot of persons rich and creating jobs for those involved in it. However, only people few are involved in this business.
The products that can be derived directly or indirectly from oil palm are numerous. Palm oil and palm kernel oil based products are make up nearly half the products on supermarket shelves, including food and non-food items. Oil palm products has many applications which include the following:
- Palm oil is used in the production of food and snacks.
- Cosmetics companies used palm products to produce cosmetics products, especially palm kernel oil.
- Oil palm products are a source of biofuel.
- Palm kernel can be used as animal feed.
- Oil palm products also have Pharmaceutical and industrial applications.
Business Opportunities in the Oil Palm Business in Africa
The business opportunities that you can explore in the oil are as follows:
- Setting up an oil palm plantation and selling the palm fruits to oil processing plants.
- Running a palm oil processing plant.
- Purchasing the oil palm products from oil processing plants and reselling to retailers.
- Buying the palm oil from whole sellers and selling to consumers.
You can be involved in any of the aspects of the business chain above and make your money and even create more jobs for people.
1. Setting up an oil palm plantation
This is a very lucrative business. If well-managed, having an oil palm plantation would make you a multimillionaire overtime and create jobs for people.
To carry out this business effectively you need a large size of land. Most African countries are blessed with arable soil and climate suitable for the growth of oil Palm. A hectare or more can be good depending on the available funds.
There is a large size of arable land in Africa lying fallow. For example, in Nigeria there is a large size of lands in the south-west and south-east that are suitable for oil palm farm. You must not have to buy this land. There is a large size of government lands available for lease to farmers at a very low fee which is renewable annually. You can use this land for as long as you wish so far you keep farming on the land and renewing your lease.
Visit any office of the River Basin Development Authority, RBDA in your state or region or of the liaison offices of the Federal Ministry of water resources and rural development.
The type of land and climatic conditions suitable for the cultivation of oil palm should be characterized by the following:
- Moist, humus rich soil with a PH range of 4.5 to 6.
- Humid, tropical or subtropical climate.
- Plentiful rain falls.
- Abundant sunshine.
- Prevalent ambient temperature of about 25 to 28 degrees centigrade.
African climate supports the cultivation of oil palm. For example, oil palm thrives in the southern part of Nigeria due to the climatic condition of the region.
The constituents of an oil palm fruit include:
- The Exocarp – the outer layer of the palm fruit.
- The pulp or mesocarp or flesh – the yellow part which is crushed to yield oil.
- The seed or endocarp – this is made up of the shell or stone and the kernel. The kernel is inside the shell.
- The kernel or endosperm – usually inside the shell of a seed. When the kernel is crushed it yields kernel oil.
There are three varieties of oil palm:
- Dura – has kernels with thick shell
- Pisifera – has kernels with no shell
- Tenera – has kernels with a thin shell
Tenera palm which have a lot of pulp, thin shell and big kernel when cultivated has better yield for palm oil production. It is a hybrid produced from crossbreeding the dura and the pisifera varieties. The high yield of the tenera variety makes it the preferred variety by oil palm farmers.
The major challenge of this business is that you would have to wait for about 4 years when the oil palm trees start to produce fruits before your investment begins to yield proceeds. However, if you are determined, this won’t deter you because once the oil palm trees grow to maturity, they can last for decades.
Cultivation process of oil palm
Germinated oil palm seeds are planted in the pre- nursery and after about 3 months in the pre-nursery, they are transferred to the main nurseries. The seedlings are grown in the main nurseries for about 6 months. When the seedlings are grown sufficiently, they are planted in the main oil palm plantation.
After land preparation activities like clearing the land and ploughing, it is now time to transplant the seedlings to the main plantation.
Seedlings from the main nurseries which are about 12 to 14 months old, 1-meter height and about 12 to 13 functional leaves are recommended for cultivation at the main plantation. Triangular system of planting with 9 x 9 x 9 m spacing which accommodates about 143 oil palm plants per hectare is recommended. This is the optimum planting density for oil palm that gives maximum production per unit area.
Apply the appropriate amount and quality of fertilizer and you can also carry out irrigation to improve the growth of your crops.
When seedlings are planted, it takes about 3 to 4 years to grow into maturity before it starts to produce the palm fruits. When you start harvesting your products, you can either have your own oil milling plant or sell the produce to oil processing plant for processing into palm oil.
2. Running a palm oil processing plant
This is another viable business under the oil palm business chain. This business has been left for aged folks in the rural areas of Africa, while many young and viable people migrates to urban areas to look for with collar jobs which are hardly available.
In rural areas where several palm oil processing plants are located, the plants are crude and uses traditional processing methods which does not allow for faster and less stressful processing of the product. You can set up your own palm oil processing plant, buy or lease an existing one.
There are several modern machinery you can use to process the palm oil faster, hygienically and easier. You can buy the palm oil extractor machine locally produced in Nigeria or you can buy the foreign type.
Some of the machines needed for the processing of the palm oil include:
- Palm oil screw press machine
- Nut Fire separator
The processes involved in the processing of palm oil :
It is better to locate your oil palm processing plant close to the source of the oil palm fruits to reduce the cost of transportation.
One major challenge with the palm oil processing business is the capital-intensive nature of the business. However, this challenge is surmountable. See my article on how to raise start-up capital for your business.
3. Purchasing the oil palm products from oil processing plants and reselling to retailers.
As a bulk oil palm dealer, you buy the processed palm oil directly from the processing plants in large quantities (drums and kegs) usually at low price during the harvest season which is usually around February to April, and resell to retailers at a profit.
In addition to reselling to retailers, more profit is made when you store the product in your ware house and then resell when the product is not in season around September to January.
The major challenge of the business is having a large storage facility for the bulk oil products.
4. Buying the palm oil from whole sellers and selling to consumers.
This involves the buying of palm oil in small quantities from whole sellers and selling directly to consumers. This type of palm oil business is prevalent in our local markets and supermarkets, and grocery stores.
I would recommend you give more thought to palm oil business options 1 to 3 above as they have the potential to generate more revenue and create more jobs.