The yellowish red oil attracts a huge market in Asia and
West African countries. Entrepreneurs interested in palm oil business need to
decide on the business template.
Palm oil business is divided into three major sectors.
The first is growing the palm, processing the palm kernel and trading the
product. The business model you choose depends on your area of interest and
funds.
Owning and processing the kernel are capital intensive in
comparison with trading palm oil.
Understand
the Challenges
To process palm oil you need to understand the production
process. Other things to learn are the different types of machinery used in the
production process.
Learn how to process palm kernels through books, journals
and manuscripts. Hire an expert to train your staff and learn the process.
Other methods include attending seminars or workshops.
You can visit a local processing plant to see what your
competitors are doing. Learn the different sets of skills in the production
process and type of machinery.
Advantages
of Palm Oil
Palm oil business is lucrative because of the huge market
and demand. The oil also has a long shelf life, low cholesterol and lots of
vitamin E. Palm oil is a good substitute
to vegetable oil, attract cheap price, abundant and has lots of industrial
applications. Palm oil is used to produce biscuits, margarine and soap.
How
to Start a Palm Oil Processing Plant
Once you understand the challenges you need to secure
funds. Other things you need are company registration, equipment, labor costs
and location. You need to write a business plan and produce a feasibility
study.
Capital
You need capital to buy equipment and lease factory
space. The amount needed is for fixed and working capital for the startup
enterprise.
Secure loans from commercial banks in your area. Provide
your account manager the business plan and feasibility study.
You need collateral and ¼ of the startup amount. The
constitution of your management team and experience will improve your chances
of getting the loan.
Locate
the Palm Oil Processing Plant
The most ideal location is in remote or rural areas.
Closeness to a palm plantation is also a good advantage.
Easy access to raw material, good road network and
electricity are other parameters. Another ideal location is close to a palm oil
market.
Equipment
for Palm Oil Processing
To run your oil processing plant you need these
equipment's. The machinery needed is boilers, palm fruit strippers and
mechanical screw press. Some more equipment’s are storage barrels, tanks, nut
fiber separator and pound machine.
List of equipment
Pound machine
Nut separator
Storage barrels
Mechanical screw press
Palm fruit stripper
Boiler
Hire
Staff
You need qualified staff to run the equipment. Hire
skilled operators conversant with the mechanism of the machines.
Hire a truck driver to convey your palm filled barrels
and you need administrative staff. You need security, accounting and casual
labor workers.
Challenges
There are a number of challenges you face in the
business. The main difficulty is securing funding and hiring skilled staff.
Others are high transportation costs, fluctuating palm
oil prices and pollution. Power, operational costs, remote location and amenities
are sometimes issues.
How
to Trade Palm Oil
If you don’t have enough money to own a palm oil
processing factory try buying and selling the finished product. The capital
requirements are moderate and easy to achieve.
The major aspects of trading palm oil are a good storage
facility and sourcing the product. Lease a shop in a market and store your palm
oil barrels.
Buy directly from processing plants or major wholesalers.
The
Supply Chain
Palm oil producers sell to wholesalers while wholesalers
sell to retailers. The retailers sell to individuals, boarding houses, hotels,
restaurants and market women.
Promote the enterprise through print media such as
flyers, signboards and business cards.
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