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Palm Oil Business – How to Start Palm Oil Business In Nigeria

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The palm oil business is one of the lucrative businesses in Nigeria because of its diverse usefulness and the huge profit involved. 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.

The 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.

Start Your Business in 30 Days Even If You Don't Have An Idea
Start Your Business in 30 Days Even If You Don’t Have An Idea

Gone are the days when people think that the only sector to make cool money in Nigeria is oil and gas. Nowadays, industries that are being overlooked are the ones raking in huge profits for the business owners.

An aspiring entrepreneur must be able to look wide and deep when investing in a business. Not long ago, Nigeria was the third-largest producer of palm oil, with over 2.3million hectares (5.7×106 acres) under cultivation.

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 palm oil business so you can choose the best that works for you depending on your start-up capital.

If you prefer to learn through video, watch the full video of how to start the palm oil business here. Also, subscribe to our channel to get more business ideas and insights.

Palm Oil Business Defined

Palm oil is an edible vegetable oil derived from the fruit of palm trees and it is reddish in colour. It is a native oil with rich components found in Nigeria and some parts of Africa. Palm oil can thicken when you store it in a cool place for a long time.

See Also: How to start Poultry Farming Business in Nigeria

Uses Of Palm Oil

A lot of people know palm oil to be used for cooking. Asides from being used for cooking, palm oil can be used for:

  • Prevention of vitamin A deficiency, cancer, brain disease, and aging
  • Production of soap, cosmetic, body cream, exfoliation cream, margarine, etc
  • Release of stomach pain
  • Production of drugs
  • Treating malaria, high blood pressure, high cholesterol, dementia, etc
  • Weight loss and for increasing the body’s metabolism
  • Water treatment
  • Production of dog and other domestic animal food
  • Preservation of food

See Also: How To Start E-Commerce Business in Nigeria

Requirements Needed To Start Palm Oil Business

The basic things you need to start this business are:

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
Go from idea to starting your business in 30 days
Go from idea to starting your business in 30 days

Land

The scope of your business will determine the size of land to acquire. It could be a few acres of land or hectares of land.

See Also: 10 Business ideas to start with 100k

Labor

Here, you may need to hire people to assist you in doing the processing. However, you may go for part-time staff who will only work at different stages of the business.

For instance, you may need a tractor operator to clear the land, then hire other people for the planting process. And during harvest, you can hire workers for harvesting.

See Also: How To Start A Cleaning Service Company In Nigeria

How Profitable Is Palm Oil Business?

The palm oil yield per hectare is estimated at 8 tons per year at most. Additionally, the profit farmers make per hectare is around 3.4tons per year.

There are other factors that also affect the profitability of your palm oil business such as the effect of pests and other diseases. Hence, this should be taken into consideration because it can affect the overall profit of your business.

Importantly, the age of the palm tree also has an effect on the yield. Normally, the peak production period of oil palm plantation is between seven (7) and eighteen (18) years after which it started to decline.

See Also: How to start Printing Business In Nigeria

Steps To Starting Palm Oil Business

Step One: Choose The Palm Oil Business You Want To Invest In

Typically, there are three main types of palm oil business you can invest in. If you have the required capital, you can invest in the three. Otherwise, you can invest in one or two of the types explained below:

See Also: 60 Online Businesses You Can Start From Home And Become Rich

1. Palm Tree Plantation

Palm tree plantation is capital intensive and it requires patience. If you want to start earning from palm oil business immediately, this may not be the best option for you.

In this type of palm oil business, you will need to acquire a large expanse of land. Importantly, the soil must be tested to be sure it is appropriate for palm tree plantation. The land and type of soil used in planting and cultivating the palm affect the quality of the fruits.

See Also: Cheap Ways To Promote Your Business As An Entrepreneur

The location of the land is also important for easy access to customers. The incubation period after plantation of the palm trees can take five to ten years before harvesting. After harvesting, you can either sell the palm oil kernel seeds to those processing it or you set up a mill to extract the palm oil.

To plant, you will have to buy seedlings. Usually, one seedling in Nigeria costs N150 and you will need at least 1000 seedlings for a start. Importantly, ensure you give at least 8-9 meters space between two plants.

See Also: Top 20 Business Blogs In Nigeria Every Business Owner Should Follow

2. Set Up A Palm Oil Extraction Mill

The second type of palm oil business is the setting up of palm oil extraction mill. This is also capital intensive but not as expensive as palm tree plantation. All you need to begin is the installation of palm oil milling machines for the processing of the palm oil kernel seeds.

Basically, you can either use the milling machines for personal or commercial processing. You can rent out the machine to people who want to process their palm kernel. You can make cool cash from this business
if you are positioned in an environment where the machine is usually needed.

One thing to note however is that palm oil has its season. The peak season is between January to May. So, you may not make so much money during the off-season which is around July to December.

Alternatively, you can install the milling machine for your personal use, process the palm oil kernel, and sell the palm oil to consumers or resellers.

To process for yourself, you need to purchase the palm kernel in large quantities from harvesters and process them into palm oil in your mill, then sell to retailers.

See Also: 12 Eco-Friendly Business Ideas That Can Make You Wealthy.

3. Sales Of Palm Oil

Most palm oil business owners invest in this type of palm oil business because it is the cheapest and easiest part of the business. This business involves the buying of palm oil in large quantities and selling to consumers.

To get more profit from this business, you can store the palm oil in a cool place for months, then sell them during off pick period when the supply of palm oil has reduced and demand is high.

This guide will focus on this area of palm oil business.

See Also: Side Hustle Business Ideas You Can Start To Earn Extra Cash.

Step Two: Draft A Business Plan

As soon as you’ve selected your palm oil business niche, 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

See Also: How To Write A Business Plan Step By Step For Your Business

Step Three: Register Your Palm Oil Business With CAC

At entrepreneurs.ng, we encourage aspiring entrepreneurs to structure their business as soon as they begin. The first step to structuring your business is to register it with CAC. There are several benefits you stand to gain when you register your business. One of them is that you can open a corporate account where customers can pay into.

Additionally, 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.

Alternatively, you can hire a lawyer to help you register it. One of the recommended firms that can help you speed up the registration process is ReDahlia, located at 43B, Emina crescent off Toyin Street, Ikeja, Lagos.

See Also: Top Legal Documents Every Entrepreneur And Start-Up Should Have

Step Four: Set Up A Storage Space

The next step is to set up storage space. Ensure the space is cool, safe, and dry. Rent a space or a room where you can store the palm oil while you wait for the right time to sell. Additionally, you will need to purchase kegs or drums to store your oil. Most times, people go for the 25litre yellow kegs.

See Also: Creative Business Ideas For Fresh Graduates In Nigeria

Step Five: Arrange With Suppliers

In case you are not the one producing the palm oil, you will need to have a solid arrangement with suppliers you can purchase from. If you carry out step two well, you will have the right knowledge suppliers to source your product from.

There are states in Nigeria that are known for producing palm oil in large quantities. Although there are several other states that produce palm oil, these states are seen as the largest producers of quality palm oil in Nigeria.

  • Delta State
  • Akwa-Ibom State
  • Cross-River State
  • Bayelsa State
  • Imo State
  • Rivers State
  • Ondo State
  • Abia State

You can visit the various states to connect with suppliers of the best palm oil.

See Also: Service Based Business Ideas To Start For Entrepreneurs

Step Six: Find A Good Means of Transportation

If you don’t know the right mode of transportation to use in transporting your goods, you may end up incurring huge costs that will affect your profit.

Hence, compare prices with several commercial carriers before settling for one. The easiest approach is to ask your supplier to suggest the cheapest, reliable, and safest mode of transportation to you as they’ve been in the system way before you. But, if you have your personal or company vehicle, you will not have a challenge with this step.

See Also: Home Business Ideas – 10 Profitable Home Business Ideas To Invest In

Step Seven: Source For Customers

The efforts you put into steps one to five will go to waste if this step is not effective. 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

Furthermore, you can also export palm oil as some international countries may have the need for palm oil, and Nigeria is known for its quality palm oil.

If you are considering exportation, one of the trusted places to find international buyers is Alibaba.com, a website known for connecting suppliers or manufacturers with buyers. Vconnect is equally a good place to try.

Apart from Alibaba and Vconnect, run thorough research for other platforms that can aid your palm oil exportation and go through our content on how to run an export business.

35 Business Ideas

Finally, there are companies in Nigeria that buy palm products. Some of them include:

Phemson Nigeria Limited

A Lagos company involved in the purchase of palm oil and palm oil processing equipment.

Planet Oil and Chemical Industries Ltd

This is another palm oil buying company located in Abia State. They also buy palm kernel oil as well.

Sunny Oil Nigeria Ltd

This company is located at Mushin, Lagos. They also purchase palm oil products and palm kernel oil.

OM Oil Industries Ltd

Another palm oil buying company located in Ikeja, Lagos.

See Also: 14 Small Business Ideas For Entrepreneurs In Lagos

In conclusion, you cannot go wrong with the palm oil business if you dutifully follow the steps highlighted in this article. As with every business idea we discuss on this platform, you can not substitute hard work and persistence. Work hard and stay the course, success will come.

Do you run a palm oil business and will like to share some insights? Do you want to start a palm oil business in Nigeria? We will like to read from you in the comments.

Are you doing something extra-ordinary in your industry and you want the world to hear about it? Reach out to us today to tell your story.

All the best!

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80 thoughts on “Palm Oil Business – How to Start Palm Oil Business In Nigeria”

  1. okeke celestina

    Please i need a special guide, i want to venture into this business. I have already registered with CAC. Please assist me.

    1. Hello Mike,

      Thank you for reaching out to us. Please reach us on WhatsApp- 08038874148. Thank you.

  2. Thank you for this insightful post. I will love to also pick a spot in the palm oil value chain and I would need all the guidance I can get.

    1. Hello Temitope,

      Thank you for reaching out to us.

      You can get the full guide from our shop or reach us directly on WhatsApp- 08038874148.

  3. GEORGE CHUKWUMA OKORIE

    Hello ReDahila
    I just ordered the eBOOK
    May I have you approve the order at this time please?

    Kind regards,
    George Chukwuma Okorie
    ORDER # 28077

  4. All this step really help me a lot , but I still need collections on where to buy and link to export outside the country.

  5. Joseph Yameyatha

    This is very insightful thank you very much for the insight on palm oil business, I love it

  6. sunday chinenye

    I want to start this business but how do i write a business plan on it, as i require it urgently.

    1. Saviour Adugba

      Kindly subscribe to our newsletter and push notification so that you can follow up. Cheers!

  7. Thanks for the insight. I appreciate, please I am in Kaduna and want to start buying and selling of Palm oil how can I get a good and reliable supplier from delta or any state, to be supplying me in Kaduna? Thanks

  8. Obeten Iwara

    Thanks for the insight I really appreciate it. I will like to start selling palm oil. How much will I be expecting to start with?

    1. Hello Obeten,

      We are glad you found the content insightful. To get the cost of starting the palm oil business, please visit https://www.entrepreneurs.ng/35-business-ideas/ to purchase our comprehensive guide on how to start the most profitable businesses. The guide contains the cost breakdown and how to start the business.

      Thank you.

  9. Good one. I am planning to go into the palm oil business but the challenge is, the cost of transportation. Is there a place close to Abuja where they produce palm oil in large quantities?

  10. Thank you. This peace is really insightful. Please I’d like to know how many years it’ll take a palm tree plantation to mature and ready for harves from seedling. Also, if you can prepare a comprehensive business plan on same business for me I’ll be glad. Here is mail address: dhfredrick@gmail.com

    1. Charles Daly

      It all depends on the species planted. 3 Years is enough to start harvesting if you got good seedlings.

  11. Ikenna Obasi

    Thanks for the post. I’m setting up a mill in the coming year. Though I reside in Abuja, will it be wise to set up here or in Abia state, considering nearness to supply.

    Do you have any post on Egusi processing mill.

    Thank you.

    1. Hello Ikenna,

      Thank you for reaching out to us. We’re glad you found the content insightful. Nice that you’re interested in starting the palm oil business.

      You can find more information about setting up the palm oil business here: https://www.entrepreneurs.ng/35-business-ideas/

      You will also learn the recommended places and companies that can purchase from you. Thank you. Do let us know if you have any challenges getting the crash course.

  12. Ademola Sanusi

    I am truly fortunate to have encountered such an article like this because, starting oil palm selling business after my NYSC year has been my priority. Please how do I meet someone/ people who has already been in this business for sometime so that I can have a boastful understanding on what I wanted to venture in? I am ADEMOLA, from Ondo state. Thank you!

    1. Hello Ademola,

      Thank you for reaching out to us. We’re glad you found the content insightful. Nice that you’re interested in starting the palm oil business.

      You can find more information about setting up the palm oil business here: https://www.entrepreneurs.ng/35-business-ideas/

      This guide is a crash course and will give you the confidence you seek to start and succeed in the palm oil business.

      Do let’s know if you have any concerns about getting the guide.

      Thank you.

  13. Hello, my name is Paul Emeka. Thank you for this comprehensive analysis. I have 24 gallons of palm oil in storage 25 litters each I’d like to sell. I’m willing to invest more if I have steady buyers, the idea of owning a mill also sounds good. I equally have a large quantity of unprocessed rice available. I’m located in Ebonyi state. I really need buyers of these farm products it will encourage me to invest more in farming I do have big dreams for it.

  14. Emmanuel Okure

    This is absolutely a perfect guide… I have a Palm Oil processing mill, but was looking at packaging a sealed Palm Oil in small litres of rubbers for sale to those areas where it’s scared. But the marketing plan and strategy is my cause of concern now.

  15. Hi, my name is Eddy Ben, I want to start the palm oil milling in a small way, but the truth is don’t know how to go about it, I don’t know how it’s been done, please I want to learn, thank you.

    1. Hello Eddy,

      Thank you for your honesty.

      We have a comprehensive proposal on how to start the palm oil business and 34 other businesses. Get it here:

      https://www.entrepreneurs.ng/35-business-ideas/

      It will answer any questions you may have about starting the palm oil business and give you a head start on your entrepreneurial journey.

      Thank you.

  16. Solomon Duza Abraham

    My name is Solomon Duza Abraham By the grace of God I want to start up Red Palm Oil business as a wholesaler which I will be buying and selling. It’s my dream to become a businessman and I love doing business and also I have a passion for the Palm Oil business because I love it.

    1. Hello Solomon,

      Glad that you love the Palm Oil Business and have a passion for it. Also, we’re glad you found the content useful. Please know that we have a comprehensive guide coming out soon that contains the strategies and investment cost of starting the POS business and other businesses. We will send an email and also make the announcement on Entrepreneurs.ng once it’s launched. Thank you.

  17. OKOLIE IFEANYI HAPPY

    This is one of my dream business and I find this information very helpful but one of my major problem is finding buyers without having a shop.

    1. Hello, Happy.

      We’re glad you found the content insightful. You can open an online store and source for clients online. Interestingly, we have a comprehensive guide coming out soon that contains the investment cost of starting the palm oil business and other business ideas. Do keep tabs on Entrepreneurs.ng because we will make the announcement once it’s published.

      Thank you.

  18. I really appreciate this article. I have a plan to venture into palm oil milling in a small way. I will appreciate you if you can enlighten me more on the price of the equipment needed. This is my Gmail awetolu2@gmail.com.Thanks in advance.

    1. Hello Tolu.

      We’re glad you found the content useful. We have sent you a mail as requested. Also, we have a guide coming out soon that will answer all your questions and more. We will make the announcement on Entrepreneurs.ng once it’s published.

      Thank you.

    1. We’re glad you found it useful. We have an even more comprehensive guide coming out soon with the cost of investment you need to start the business. Please, keep tabs on Entrepreneurs.ng because we will make the announcement when it’s published.

  19. Thanks for this great information. I have long for this I just to if someone can buy for me and sell when the price rises.

    1. Hello Rachal,

      We’re glad you found the content insightful.

      We have a comprehensive guide coming out soon that’s more comprehensive and contains the cost of the investment for starting the business. Please, keep tabs on Entrepreneurs.ng because we will make the announcement as soon it’s launched.

      Thank you.

      1. Hello Daniel,

        Thank you for reading. We have a comprehensive guide coming out soon that contains the investment cost and marketing strategy for starting the palm oil business and other business ideas. Do keep tabs on Entrepreneurs.ng because we will make the announcement once it’s launched.

        Thank you.

  20. Happiness Bassey

    I too want to start this lucrative business.
    I’m a student what modalities must I put in place for a success thanks

    1. Thank you Happiness for reading and we’re glad you found the content insightful.

      The secret to success in any business is understanding that business, working hard, and being patient with the process. We have a guide coming out soon that’s more in-depth about the Palm Oil business and other business ideas. Please keep tabs with Entrepreneurs.ng, because we will make the announcement once it’s out.

      To consult with us on business strategy, reserve us by visiting the link: https://www.entrepreneurs.ng/business-consulting-services/

      Thank you.

      Thank you.

  21. I will like to start up my own Palm oil business too , but I would want to start it in a small one . Some one once told that I can buy a bounch which cost of 300 Naria per one and can also be taken to mill . Sir is there any profit in there .

    1. Hello Philip,

      We are glad the content was useful to you and that you want to start your business. To start your business, it’s on you to do your due diligence or consult a business consultant. Good luck.

  22. I am inspired to start, want to know whether palm oil is produced in Nassarawa state, when is the best time buy and sell thanks again

    1. Hello Tina,

      We are glad you are inspired to start your business. You can make further research to find out about those details.

      Thank you.

    2. Mike Otsepa

      I find your article very useful. I want to start a palm business, from planting to sale of the product. I’m located in Benue state. What is the cost of a good business plan

      1. Hello Mike,

        We are glad you found the article insightful.

        For the business plan, we can prepare a business plan that is tailored to you. Please send us an email on business@entrepreneurs.ng and we can take the discussion from there.

        Thank you.

  23. Uchenna Joseph Ugwu

    Am also interested in starting the plam oil business. They major thing I really want to know is how to purchase the gallon in quantity and what is best getting a van or hiring a logistics company sir.

    1. Hello Uchenna,

      Thank you for reading. Glad you found the article insightful. Everything you need to start this business was discussed in the article. However, if you will like to consult us for a fee, please send a mail to business@entrepreneurs.ng.

      Thank you.

  24. My name is Emmanuel currently resident in South Africa but planning to return back to Nigerian my plan is to invest in buying and selling of palm oil business,please how much do you think I should start with

    1. Hello Emmanuel,

      Thank you for reaching out to us and we are glad that you found the article very insightful.

      According to the article, you can do your cost analysis and start with what you have, but if you want us to do that research for you, it comes at a cost. Do send us a mail at business@entrepreneurs.ng.

      Thank you.

  25. I want to start the last phase of the Palm oil business so how much will it cost me for a start ???

    1. Hello Olamide,

      Thank you for reading and we are happy that you want to start your own business. Do send us a mail at business@entrepreneurs.ng about what you need from us and we will take the conversation from there.

      Thank you and stay safe.

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