Business opportunities in oil palm - THE NATION
Demand for palm oil and other derivatives from oil palm tree is growing rapidly. Local producers are not able to satisfy requirements of the food industry and households.The deficit in supply has created business opportunities for young entrepreneurs to explore and make a living, DANIEL ESSIET reports.
Palm oil business is a money spinner the world over. This is because of increased demand for it in key consumer markets.
Palm oil and its derivatives are found in about 50 per cent of all packaged foods, according to analysts.
Generally, it is used for producing foods, such as noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals and baked products.
It is also processed into edible oils and speciality fats in chocolate, confectionary, cosmetics and other products.
The rapidly-growing population will continue to be a major driver of palm oil.
Globally, experts said the market for palm oil is projected to exceed 85 million metric tonnes by 2024, driven by ubiquitous applications in a broad range of everyday products.
In Nigeria, the market size is huge and growing. This means business opportunities for aspiring entrepreneurs and investors.
One of the beneficiaries is the President, National Palm Produce Association of Nigeria (NPPAN), Alphonsus Inyang, who has made huge returns doing business across the value chain.
He said the real deal is in oil palm and that the market is very promising for stakeholders, thanks to increasing demand and its various revenue streams provided across the value chain.
Inyang said it presents massive potential for growth, adding that it should be a motivation for more people to come into it.
Right now, he said demand has outstriped domestic supply.
The primary market opportunity for investors, according him, is local. However, demand has been growing for exports.
He urged entrepreneurs to invest in domestic cultivation as profit margins and opportunities are encouraging.
Inyang explained that palm oil production involves a wide range of actors.
He said there are farmers and others in refining, processing and trading aspects of the chain.
All these areas, he noted, are profitable for investors.
He said with minimal capital, one could start a small scale palm oil processing industry.
What is involved is investment in the machine and raw material – crude palm oil.
He said youths and others could establish palm kernel oil processing businesses. They would process oil and palm kernel cake for use in producing soaps, body creams, butter, cheese, vegetable oil, among others.
Besides, he said they could use said palm kernel cake to produce animal feeds.
According to him, it is really a profitable business to start.
He said N1 million is enough for the machine and all that. His words: “Yes, for a 10-tonne per day machine with generator.”
In many farming locations, aged farmers deploy mini-old palm oil processing plants which are not fast to cope with increasing volume of business. For him, that is an opportunity for young entrepreneur to move in establish a small scale palm oil processing plant.
Another profitable area, he mentioned, was nurseries.
He said: ”We need people to undertake palm nursery development near a farming cluster.”
One plants oil palm seeds in nurseries.When the seedlings are grown, the big farmer come to purchase them to plant in the plantation.
With N500,000, one could stand a nursery and sell to farmers.
There are buyers who purchase Aprocessed palm oil directly from the processing plants in drums and kegs and sell in the cities.
Inyang believes that there are windows for entrepreneurs with little capital to make money as retailers.
He urged interested young people to contact NPPAN because they have various programmes and funding windows for entrepreneurs.
While Nigerians are not take advantage of opportunities in the sector, Inyang said oil palm has become big business in Asia, attracting investment due to its increasing demand.
According to him, the global oil palm export market has continued to experience healthy growth, driven by Asian producers in particular.
For Nigeria to become the leading producer of oil palm, Inyang said the sector will need to plant at least 1.2million hectares of the produce yearly over the next 10 years.
He said Indonesia, which is the world’s leader in the industry, has the largest farmland of oil palm plantation in the world sitting on 12 million hectares.
“Nigeria’s total number of hectares is 360,000, both estates and small holder farms across 24 states. To meet up with the position of Indonesia, we have to plant at least 1.2million hectares per year over the next 10 years,” he said.
He said young entrepreneurs need to come into the industry to boost production due to local demand.
He said more Nigerians should invest in the country’s plantations to reduce reliance on imports and allow farmers to export.
Inyang said the association is determined to revive the industry and support youths that want to make living producing or trading palm oil.
Another stakeholder preaching the gospel of wealth through oil palm and its derivatives is the Executive Director Nigerian Institute for Oil Palm Research (NIFOR) Dr. Celestine Ikuenobe.
Ikuenobe said there is potential for people to make money in oil palm through farming, if they apply good agricultural practices (GAP) and technology to increase value throughout the value chain.
Apart from that, he said there were opportunities in processing, kernel cracking and marketing across the country.
The other opportunities, he mentioned, were in input supply, such as fertiliser agrochemicals and services in land preparation.
According to Ikuenobe, the climate and geographical location of all states in the South make them ideal for oil palm cultivation.
He said investors could also take advantage of the ecologies in Kogi, Benue, Nigeria, Nasarawa, Kaduna and Taraba states to cultivate oil palm.
The institute’s expertise in palm oil production has contributed to the emergence of a thriving industry.
For would-be-investors,NIFOR supplies sprouted seeds/seedlings.
Its seed production unit has the capacity to produce between five and 10 million sprouted seeds yearly.