Feasibility Report on Palm Kernel Oil Extraction Business Nigeria

January 11, 2017 | 0

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This feasibly report on the establishment of a palm kernel oil expelling factory is based on a survey done between October 2012 and October 2013. The consultant collected the information used in this report from existing factories, raw materials markets in various locations and finished products markets. The consultant also made use of SME Center, Ministry of industries, and other regulatory agencies.

The Palm Kernel Oil extracting business is primarily a raw material processing business. This is so because the end product is still a raw material for the big refineries that use it to produce edible Vegetable oil. The basic raw material in this industry is palm kernel and finished products are palm kernel oil (PKO) Palm Kernel Cake (PKC) and sludge. The palm kernel oil is the main output of any palm kernel oil-expelling factory.

The palm Kernel oil (PKO) is the major raw material for the production of vegetable oil. Ninety percent of what we call groundnut oil in our market is vegetable oil made of palm kernel Oil (PKO). Again PKO is a major raw material for soap making companies. The palm Kernel Cake (PKC) is a major by product of a palm kernel oil expelling factory, palm kernel cake is used for producing animal feeds. 
Most of the animal feeds such as chicken feed, pig/cow feeds etc are made with PKC. Sludge is a minor by-product which is used by people who produce black soap. and other mechanized soap Industries.

The business is an all-year-round business. The end product are in hot demand all –year-round, Because of the high demand producers do not stock finished products. Buyers always book for the products in advance. It is also on cash and carry basis.
Sometimes buyers are even pay in advance in other to secure an expected batch of products. Prices of the product i.e (PKO and PKC) are elastic or fluctuate up and down, depending on the season of the year. However the prices of the raw materials i.e Palm kernel also fluctuate along with the finished product (PKO) 

Thus, if the price of the PKO falls the price of the palm kernel (PK) also falls and vice versa. A good strategist with adequate working capital can make a fortune if it takes advantage of these price movements.
The major threat to the business is scarcity of palm kernel. If a factory lacks palm kernel it may not enjoy period of rising prices. Another major problem is irregular supply of electricity. 


Why Palm Kernel Oil Extraction Business

Palm  kernel extracts serves lot of purposes, it's oil is used in production of cosmetic products, it's chaff called cake is used in animal/bird feed production, while it's by product called sludge is used in production of black soap. Palm Kernel oil is also used in various other vital industrial purposes. Palm kernel oil extraction business is a good and profitable business when executed properly.

 

Importance of Feasibility Report

Before starting any business including Palm Kernel Oil Extraction Business is it very important to do a feasibility study/report. A feasibility study is used to determine the viability of an idea. The objective of such a study is to ensure a project is legally and technically feasible and economically justifiable. It tells us whether a project is worth the investment. 

In simple terms, a feasibility study involves taking a judgment call on whether a project is doable. The two criteria to judge feasibility are cost required and value to be delivered. A well-designed study should offer a historical background of the business or project, a description of the product or service, accounting statements, details of operations and management, marketing research and policies, financial data, legal requirements and tax obligations. Generally, such studies precede technical development and project implementation.

A feasibility study evaluates the project's potential for success; therefore, perceived objectivity is an important factor in the credibility of the study for potential investors and lending institutions. [Source: Wikipedia] 


The Analysis Of Palm Kernel Oil Extraction Business

PKN – Palm Kernel Nut. The is the nut you get when a palm kernel’s hard shell is broken. That’s the nut where the oil we are talking about is extracted from.

PKO – Palm Kernel Oil. This is the actual oil that is being extracted from palm kernel nuts, the actual product or one of the main product we are talking about here.

PKC – Palm Kernel Cake. This another product that is being derived from the palm kernel extraction process and it makes up good percentage of the palm kernel produce.

According to a reliable statistic, it is believed that in every 25 metric tons of good palm kernel nut one is expected to get 10 metric tons of Palm Kernel Oil (PKO) and another 13.5 metric tons of Palm Kernel Cake (PKC) as pure products.

We present you a sample feasibility report on Palm Kernel Oil Extraction Business in Nigeria. You can download the attached template and work with it to suit your needs.

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