The palm oil business in Nigeria is a business that you can start today, become your own boss and make a lot of profits as you build and expand.
The palm oil business is one of the many profitable businesses that will guarantee you a 100% return on investment (ROI) from the start.
So if you really want to start making a living with this palm oil business, you have made the right choice.
Many entrepreneurs looking to start a palm oil business in Nigeria find it hard somehow. This is not because it’s complicated, it’s just because they have not come across a sufficient article that will break it all down piece by piece.
So my dear reader, if you want to start a palm oil business in Nigeria and you need information, guide and ideas to begin, you should keep reading because I am going to show you everything you need to know step by step from start to finish.
I will firstly commend you for developing an interest in reading this article. I have come across some young people who want to venture into a business and find it hard to read online.
In your own case, reading this article about palm oil business is proof of seriousness and an evidence that you know what you are doing. You can go ahead and clap for yourself (Smiles).
You might want to grab a bottle of water because this is a comprehensive article and if you can manage to read to the end, you will have all you need to succeed and make a lot of money from palm oil business in Nigeria as you will be your own boss. See also [How To Make Money Online In Nigeria – 100% Tested & Working Easy Ways]
This article will be very useful for you if you are searching Google for Palm oil business in Nigeria 2017, How to export Palm oil from Nigeria, Palm oil business in Nigeria 2018, current price of palm oil in Nigeria, Companies that buy palm oil in Nigeria, Palm oil business nairaland, Palm oil business plan and how to preserve Palm oil.
All you have to do is just continue reading and you will find an answer to every question relating to Palm oil business in Nigeria as we proceed.
Those above are all that you are going to learn in this palm oil business in Nigeria guide.
Don’t worry, you will not be bored because am really going to try as much as possible to make it lively. See also: [Popcorn Business In Nigeria – Make Money Like A Boss]
Red Palm Oil
Red palm oil is a natural oil extract from palm tree fruit. You and I cannot set aside the importance of red palm oil in Nigeria.
No home that doesn’t cook with it and you can try to estimate how many people in your house, street, compound and environment cannot do without using red palm oil every day.
You see you already have established customers.
Using palm oil for cooking has greater health benefits over vegetable oil as it is said to have a high concentration of vitamin E in the finest proportion.
Here are some common areas where palm oil is being used.
- Manufacturing ice cream
- Margarine, etc.
- Personal care (soaps, lubricants, lotions, etc.)
- Production of drilling fluids
- Cosmetics are an alternative to mineral oils
- Production of water treatment products. A product that is as useful as this is highly demanded in the market and that is why the Palm oil business in Nigeria is very lucrative.
Why You Should Start A Palm Oil Business
You might want to ask why you should start a palm oil business. I don’t know if anyone will want to ask me that anyway. However, the following reasons will convince you why the idea of a palm oil business is the best.
- You can make up #200,000 every month and millions of naira every season.
- To start a Palm oil business is not complicated or hard. It’s one of the easiest businesses out there.
- You can do it anywhere you are. Location is not a problem.
- You don’t need sweating capital to start. You can start with a little capital and grow as time goes on.
- Palm oil red oil is not restricted by age, sex or race. What is better than a product that is not forbidden by religion, culture, and tribe but wildly used by everyone?
- The product is used everywhere and every day. Your market is already available for you.
- You can export and sell abroad.
- Maintenance is not expensive at all.
- You don’t have to worry about preservation too much. Palm oil doesn’t spoil easily.
- Palm oil is one of the commodities constantly in high demand in Nigeria. There is never a time it wouldn’t be a hot cake in the market.
Different Ways To Make Money From Palm Oil Business
There are different ways you can make money from the Palm oil business. I will just talk briefly about the various methods and talk more about the one we are here to talk about. See also [Make Money Online Without Paying Anything To Start]
1. Palm Oil Plantation
This will be an excellent choice if you have a long-term vision. There are fewer competitors in this field and it will take a lot of resources – investment, fertile farmland and patience. The idea is to grow a palm oil plantation and harvest it for sale at the end.
If you considering venturing into the world of agriculture and entrepreneurship? Starting a palm oil plantation business might just be the right path for you.
In this section, we’ll explore the advantages and disadvantages of embarking on this rewarding journey.
- High Demand: Palm oil is a versatile and essential commodity, used in various industries such as food, and cosmetics, and the domestic demand alone is stargazing. Because of the consistent demand, this will ensure a stable market for your produce.
- Profit Potential: A well-managed palm oil plantation can be highly profitable. As the trees mature, they yield large quantities of oil-rich fruit bunches.
And this is a win for you because the more a palm tree produces, the more profits you make.
- Job Creation: Establishing a palm oil plantation can create job opportunities in rural areas, contributing to local economic development.
There is no way you will manage the whole plantation alone. You will need extra hands.
- Long-Term Investment: Palm trees have a long lifespan and can continue to produce fruit for up to 30 years, providing a long-term income source.
Imagine that after maturity, your plantation farm can keep producing fruits for over 30 years.
- Initial Capital: Setting up a palm oil plantation can be capital-intensive. You’ll need funds for land acquisition, tree planting, and infrastructure development.
- Land Issues: Land availability and ownership can be a complex issue, especially in densely populated areas. You may encounter challenges securing suitable land.
- Environmental Concerns: Unsustainable palm oil production has been associated with deforestation and habitat destruction. Responsible land management is crucial to mitigate these concerns.
- Time-Consuming: Palm trees take several years to reach full production capacity, so patience is essential. You won’t see immediate returns on your investment.
It’s not a rich quick business. You have to be patient.
- Market Volatility: The palm oil market can be subject to price fluctuations due to global factors, impacting your profitability.
But the good news about this in Nigeria is that we all know that price always goes up.
In conclusion, starting a palm oil plantation business offers promising rewards, but it also comes with its fair share of challenges.
Success in this venture largely depends on thorough planning, sustainable practices, and a long-term perspective.
With dedication and responsible management, you can potentially thrive in this industry while contributing positively to your community and the environment.
2. Palm Oil Milling And Processing Plant
If you have ever visited how our mothers process palm oil at the farm, you will have some new experiences you have never imagined before. Traditional processing is one of the leading reasons for low palm oil production in Africa.
Due to the crude methods of squeezing out palm oil from the pulp of the palm fruit, a lot of oil still remains in the pulp and is lost through this ineffective and wasteful process.
This is a technology age. Technology doesn’t make things only faster but also more effective. So you can start your packaged palm oil processing mill and make millions from it.
Starting a palm oil milling and processing plant can be a rewarding endeavour. Let’s explore the pros and cons of this type of palm oil business in Nigeria.
- Lucrative Business: Palm oil is in high demand worldwide, making the processing industry a profitable venture.
What product is more profitable than something that every household uses on a daily basis. The demand is very high.
- Value Addition: By processing palm fruits into oil, you add value to your agricultural produce, increasing its market worth.
Nobody will buy or locally sell the raw palm fruit straight from the palm tree without the processing procedure.
- Job Creation: Running a processing plant generates employment opportunities, contributing to local economic growth.
You can’t ever manage a processing plant all alone. You need a team.
- Versatile Products: Besides edible oil, palm oil processing can yield by-products like palm kernel oil and palm kernel cake for additional income streams.
Control Over Quality: Operating your processing plant allows you to maintain quality control, ensuring a premium product.
- High Initial Investment: Setting up a processing plant demands substantial capital for machinery, infrastructure, and skilled labour.
- Complex Regulations: The palm oil industry often faces stringent regulations and environmental compliance standards that may require extra effort and costs.
- Market Fluctuations: Palm oil prices can fluctuate due to global factors, impacting your profitability.
- Technological Challenges: Operating the machinery requires technical expertise, which can pose challenges for those new to the industry.
- Environmental Concerns: Sustainability practices are essential to mitigate environmental impacts often associated with palm oil processing.
In summary, entering the palm oil milling and processing industry presents both opportunities and challenges.
However, with dedication and the right strategy, your palm oil processing plant can become a success story in the industry.
3. Become A Palm Oil Bulk Trader
This is the reason for this article and the one I will be talking about in detail. This is the aspect you are going to explore and make money from.
Being a palm oil bulk trader is one of the most lucrative businesses you can start and make a huge impact on your financial life forever.
Becoming a palm oil reseller is easy to start, it requires low capital and you can start anywhere. Let’s get right onto it.
How To Start A Palm Oil Business In Nigeria
Starting a palm oil business in Nigeria as a reseller is pretty simple and easy. The idea is that: you will purchase red palm oil where and when the prices are low. Thereafter, you preserve them in storage and then resell them.
For instance, let’s say in Lagos and some major cities, Palm oil is sold for around #5,500 to #6,000 for 25 litres. There are places and farms where you can get your in bulk for around #3,500 to #4,000 or even less.
If you buy very cheap when palm oil is surplus and then store it in a cool dry place, you will then resell it when the price is high and make 100% profit from it.
It is usually surplus around December to April and sells at the highest around July to September. So if you can buy enough between December to April and resell between July to September, you can do the calculation by yourself.
If you also plan to be selling all around, that is you don’t wait till July or August to start selling, that will even be a good choice.
All you just have to do is locate a place with high production in high quantities and purchase at a convenient price, then transport to your city and start selling. When you finish selling that, you go for another round and keep it on like that.
How much you can make depends on how hard-working and how much you put into it. Read also: Profitable Business Ideas With Low Investment
Things You Need To Start A Palm Oil Business In Nigeria
Now that you know how the process works, here are things you will need to start a Palm oil business in Nigeria.
The palm oil business in Nigeria is just like any other business that requires capital to start. You don’t need to get a loan or borrow a huge amount of money to start.
You can start with the little you have. I am not saying loan and borrowing is bad, am just saying you can start little and expand. The fact still remains that the amount you put in will determine how the profit will be.
2. A Store
You will need a place to store your palm oil. A cool dry place is the best. You could use a room in your house, you could use a shop, you could use anywhere indoors to store your palm oil. One of the best ways people do it is to get many 25-litre kegs to store the palm oil.
3. Get a Location To Buy From
There are a lot of places where you can buy palm oil, mostly from local farmers. It is always cheap and of good quality when you buy from locals.
Here are some examples of States where you can get palm oil in abundance.
- Bayelsa state
- Imo state
- Rivers state
- Delta state
- Abia state
- Edo State;
- Akwa Ibom;
- Ondo State.
Don’t be stingy when buying the palm oil. The quality is crucial and is worth every penny! I will advise you not to for quantity, go for quality.
4. Transport To Your Location
The next move after buying palm oil from local farmers is to transport the palm oil to your own city.
If you have a van or a truck, that will be fantastic and if you don’t have, you can always hire a van that will transport your products for you.
5. Market And Sell Your Palm Oil
Marketing is very important and is still going to give you some marketing strategies below. All you have to do at this point is to wait for the price to go up and then you will start selling.
Palm Oil Business Marketing Strategy
Marketing is very crucial in every business. You have to market and publicize yourself till you become popular and then allow your brand to speak for you.
Below are a few ways to market your palm oil business for people to know what you do.
1. Word of mouth.
This is one of the most effective means of marketing. You tell people in your house, your friends and family, neighbours, and everyone in your environment that you sell palm oil. Talk to them and they will patronize you.
2. Pitch Restaurants And Local food sellers
These people can be a potential customer if you click a deal with them. You just have to show them how reliable you are and what they stand to benefit from patronizing you.
3. Banners and Handbill
You could paste banners and posters around to create awareness. You could pay some children a token to share and paste the bills around for you. This strategy works very well.
4. Different packages
You can package your palm oil in flexible ways to make it more accessible by everyone.
You can advertise on blogs, TV, radio stations and through every available means around you.
6. Social Media
You have to bombard social media with your palm oil business. You share and notify people on Nairaland, and Facebook, send pictures on Instagram, X, LinkedIn and many more out there.
How To Export Palm Oil From Nigeria – Step By Step Guide
How to export palm oil from Nigeria is the question that you should ask because there are so many benefits attached to the idea of taking your palm oil business beyond Nigeria.
You will definitely make enough money if you sell in Nigeria alone, but taking your palm oil business abroad will make you more money.
This is a very lucrative business and highly profitable because palm oil is widely used all over the world and if you are planning to start exporting palm oil to Countries like US, UK, and others, you have a great idea and I will help you realize it below.
I would like to tell you that the process of exporting palm oil from Nigeria to other countries is not too complicated and am going to just explain everything you need to know to start exporting Palm oil from Nigeria to any country of your choice.
Either you are looking for how to export palm oil from Nigeria to UK, how to start palm oil investment in Nigeria, companies that buy palm oil in Nigeria, how to export palm oil from Nigeria to the USA or buyers of palm oil in Europe. Just continue reading.
You should understand that you are about to leave the border of Nigeria and start selling your palm oil to foreign countries. There are things you should do, there are things you should know. So please pay more attention here.
1. Register Your Palm Oil Business With CAC
If you want to keep selling your palm oil to the locals, you might not need to register your business for now. However, as you expand, it is advisable that you register with the Corporate Affairs Commission.
In this case, if you want to be exporting palm oil from Nigeria, you will need to register your business.
You will need a business name, a brand, a physical address and more to stand out and show that you know what you are doing. You can click here to read more about registering your business.
One thing that is sure is that registering your business will even boost your palm oil exporting business.
2. Nigerian Export Promotion Council Registration(NEPC)
Another firm you will have to register with is the NEPC. The Nigerian Export Promotion Council’s sole purpose is to promote Nigerian export products and ensure proper documentation of export transactions.
That’s why you need to register with them, they help you connect with buyers while also presenting your export products at foreign trade fairs.
You will have to pay a fee to register, but I can tell you it is worth it. Click here to read more about the amazing body.
3. Select The Country Of Your Choice
Am sure you don’t want to start exporting to all the countries in the world at once. You will need a target Country. United States, United Kingdom, and others. Selecting your country will have to come into the plan.
4. Locate Your Buyers
It is easy to locate your local buyers here because they are all around you. However, in the exportation of the palm oil business, you will need to find buyers. The NEPC will be useful at this point but you also have to find buyers on your own.
It’s a technology age we are. You should utilize the Internet to find buyers and locate them wherever they are.
One way is to register as a supplier on sites like Alibaba, and Amazon, and find your potential customers.
You might also locate a restaurant and send them an email.
You will need a lot of money to start exporting palm oil from Nigeria. The exportation business requires enough capital.
Once you register your business and find potential customers, then you contact a shipping company and export your products to your customers.
Other Important Documents
These are documents you use in reference to the type and number of products you are exporting, including shipping costs. It is usually sent to the buyer and a copy to the relevant exporting agencies i.e. Customs
These documents are issued by the Ministry of Agriculture and NAFDAC for the Buyer, it tells the shipping agency that your goods are okay to be shipped, it tells the buyer the quality of the goods he/she is getting.
These are issued by the shipping company, depending on what means of transportation they use to ship the produce.
Tariffs Concession Documents
These documents are usually issued depending on the export area the country you are sending the produce to is a member of.
Challenges Of Palm Oil Business In Nigeria
Starting a palm oil business in Nigeria is very lucrative but has its own challenges. Most of the questions that people ask on
Challenges of the palm business in Nigeria are good questions. It’s good to know about it all before you even start so as to prepare and avoid it as best as possible.
Below are a few challenges faced in the palm oil business industry.
Although the capital to begin this business is not really much. In fact, you can start with #50,000 or even less. But if you want to start it on a larger scale, you might need more capital.
2. Identifying Good Oil
Somebody might want to ask me that are there bad red palm oil. Yes, there are. A bad oil will keep getting worse as it stays longer.
As a result of that, you may find it difficult to sell and when you eventually do you might not get the quality of your money back.
It is advisable to go along with someone who has experience and as time goes on, you will turn expert and don’t need anyone to go with you.
3. Unplanned Circumstances
It might be difficult to supply your client at the agreed time this could be due to a truck breakdown on the way, which does happen every now and then.
Not being able to source for the oil on time or delay by the palm oil millers etc. In situations like this, you have to calm your clients down because they might be funny during these trying times. Just be the man.
4. Fluctuation In Prices
Palm oil prices are always fluctuating sometimes after agreeing on a certain price with a client, that price will shoot up, it will take wisdom and good explanation to get an understanding.
This is one of the challenges of the palm oil business in Nigeria that affects people who store palm oil.
In 2017 so many people stored oil thinking it would be like 2016. When people were making more than 300% profit. The product became too available forcing the price to remain low as a result of those people who weren’t smart enough to observe the market loss in the business. You are not the only one with this idea remember.
Palm is being smuggled in or allowed into the Nigerian market from Malaysia and other neighbouring countries. They flood the product in and sell it out at a lower price than our local oil.
Customers patronized them because of the price even when the quality can’t be compared to our local oil.
7. Selling on credit
Some of those customers may pressurise you to sell on credit. If you do, getting your money back may be a problem.
Sometimes they pay you in pieces such that you cannot continue with the business anymore.
I know we all have those neighbours and friends that we can’t do without selling and collecting money later. But you should manage it very well. Do not be too harsh and do not be too dull.
No business out there that is really worth it doesn’t have its own stress. You might have to travel to source your palm oil. Packaging, loading, storing and others might be stressful a bit. But am sure you are stronger.
Keep those challenges of palm oil business in Nigeria in Mind and you will never be caught unaware.
Companies That Buy Palm Oil In Nigeria
Below is a list of a few of the companies that buy palm oil:
- Sunny Oil Nigeria LTD at 133, Isolo Road, Mushin, Lagos State
- Planet Oil And Chemical Industries Limited at 4 ,Aba-Enugu Expressway, Aba North, Abia
- Om Oil Industries Limited at 1, ACME Rd Est, Ogba, Ikeja, Lagos
- Phemson Nig Ltd at 176 Abeokuta Exp. Way, Iyana Ipaja, Lagos
- Emily Millionaire Cosmetics at 11 Alapade Street, Balogun, Lagos
- Okomu Oil Palm Company at Okomu-udo Ovia South West Lga, Benin, Edo, Nigeria
Now Your Turn
You now know everything you need to know about the Palm oil business in Nigeria. If you have any questions, just ask me below and I will be glad to attempt an answer.
Please share this article with friends and family on social media. You will be doing a lot of good by sharing this article. Thanks so much for reading my Palm Oild Business In Nigeria article.