Feasibility Report on Palm Kernel Oil Extraction Business Nigeria

| Published on February 14, 2020 | 766 views
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Feasibility report on the establishment of a palm kernel oil expelling plant/factory is based on a survey done between March 2019 and July 2019.

The consultant collected information used in this report from existing plants/factories, raw material markets in various locations (Enugu, Ebonyi, Abia Anambra and Imo) and finished products markets in the above locations.

Information were also gathered from small and medium scale entrepreneur center (SME) Enugu, Ministry of Industries and other regulatory agencies.

Palm Kernel Oil extracting business is primarily a raw material processing business. It is so because the end product is still a raw material for other

Industries or plant that use the Palm kernel Oil (PKO) to produce edible vegetable oil and use the palm kernel cake (PKC) to produce animal feeds respectively

The basic raw material in this industry is palm kernel (PK) and finished products are; Palm kernel Oil (PKO) Palm Kernel Cake (PKC) and Sludge. Palm Kernel Oil (PKO) and Palm Kernel Cake (PKC) are the main output of any palm kernel oil expelling factory/plant.

Palm kernel oil (PKO) is the major raw material for the production of vegetable oil. 80% of what we call groundnut oil in our markets is vegetable oil made from palm kernel oil (PKO). PKO is a major raw material for soap making companies, while palm kernel cake is a major bye product of a palm kernel oil expelling plant and it is used for producing animal feeds. Most of the animal feeds in the market today such as chicken feeds, pig/cow feeds are made with palm kernel cake (PKC).

The third product called Sludge is a minor bye product which is used for producing black soap.

The business is an all-year-round business. The end products are in hot demand. Because of the high demand, producers do not stock finished products. Prospective buyers always book for the product in advance and sometimes make advance payments so as to secure an expected batch of product. However, the business is on cash and carry basis. Prices of the products; raw materials (PK) (PKO) and PKC) respectively are elastic. Prices fluctuate up and down, depending on the season and some other economic factors. However, the prices of the raw materials fluctuate along with the finished products, for example, if the price of the PKO falls, the price of the PK also falls, and vice versa. A good business strategist with adequate working capital can make a fortune if he takes advantage of these price movements.

Why Palm Kernel Oil Extraction Business

Palm kernel extracts serves lot of purposes, its oil is used in production of cosmetic products, its chaff called cake is used in animal/bird feed production, while its 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. 

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