Feasibility Report on Establishment of a Palm Kernel Oil Expelling Factory

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.