What Are The Steps In Nigeria To Start A Palm Oil Farming Business?
Palm Oil Farming:With either modest or huge amounts of investment money, the oil palm industry is one of the best and most lucrative sectors of agriculture. The palm oil growing industry can be quite lucrative if it is well run.
This is due to the fact that we utilize palm oil in every aspect of our lives, regardless of our age (young and old), financial situation (wealthy or poor), or gender (male and female).
You should be aware, given the aforementioned information, that this commodity’s market is flourishing. Due to the high need for palm oil, starting a business with it will not be a mistake. You can use this article as a reference and source of information if you ever decide to launch a palm oil farming enterprise in Nigerian.
Red oil, often known as palm oil, is the native oil used primarily for cooking in Nigeria. If kept for a long time in a cool environment, it can thicken. It can catch fire (when put on the fire to a boiling point and it comes in contact with fire or water)
Steps For Using Palm Oil
How To Launch A Palm Oil Farming Company
What Are The Steps In Nigeria To Start A Palm Oil Farming Business?
The procedures needed to set up a prosperous oil palm farming business in Nigeria are listed below.
The oil palm industry’s initial and most important phase is right now. It necessitates a substantial or significant sum of money. You must buy a sizable parcel of land. The soil is typically evaluated on several acres of land to see whether it is appropriate for palm tree plantations.
The soil’s quality needs to be examined since during the harvesting process, it almost always dictates the quality of the palm oil.
The size of the land and its proximity to manufacturing facilities and a direct route to markets are additional factors to take into account. The production of palm oil is not a hit-and-run operation. It requires effort, patience, and time. The incubation time after planting the palm trees might take several years; some can require up to ten years before harvesting, so you must be very patient.
The good news is that once harvesting gets going, it becomes a routine activity because different palm trees produce mature palm oil seeds at different times and need to be collected. Additionally, you must choose whether to extract the palm oil yourself or sell the parm kernel at a fair price to specialists in the procedure.
Install A Palm Oil Extraction Machine
The next stage will be to set up a palm oil extraction mill if you have chosen to extract the oil yourself. However, this calls for a significant investment in both financial and human capital (workforce).
Installing palm oil milling equipment is the first step in processing the palm oil kernel seeds. Then, you can choose whether to buy the equipment for your own use or to rent it out to customers who wish to process their palm kernels, giving you another source of revenue.
If you happen to be one of the fortunate few who owns the equipment and you chance to be in a situation where it is greatly needed, this is a fantastic opportunity.
Finally, it’s crucial to remember that the palm oil farming industry is seasonal; assuming all other factors are equal, the harvesting and financial rewards for palm oil farming occur between January and mid-June. However, this means that from July to December, you might not make as much money.
Create a dependable business plan
You must create a strong business plan that will periodically direct your palm oil business as soon as you determine whether to carry out the palm oil extraction yourself or sell the seed out. You must conduct extensive study on the business as a whole while creating your business plan, including market research, production research, maintenance research, management research, etc.
Learn about the difficulties you’re likely to face, when they might arise, and how to handle them if they do. Find out about your potential competitors as well as the costs of your products, as well as where and how to buy palm oil and palm kernel at a discount and sell it at a premium.
The executive summary, market analysis, financial analysis, marketing strategy, and competition analysis are all things you should include in your business plan.
Create A Storage Building
You can preserve and maintain your palm oil in a storage facility until the right moment to sell it. This is crucial because after palm oil has been harvested, it cannot just be placed anyplace. When you are about to sell it, it can have an impact on its quality, which will have an impact and lower your earnings. Make sure the area is dry, safe, and cool.
Additionally, since you won’t be selling your oil right away and you can’t just keep it inside the mill, you’ll need to buy kegs or drums to store it. Although the 25-liter yellow keg is the most popular storage container, consumers also frequently utilize the 25-liter black keg.
Find a simple means of transportation.
Finding a way to get your products to their destination is entirely different than planting, managing, and harvesting your palm oil products. You could wind up incurring significant fees that will have an impact on your profit if you don’t know the best mode of transportation to utilize while delivering your items to the required consumer or merchant.
Before choosing a commercial transporter, check prices with a few to avoid the aforementioned issue. Of course, those who have their own cars won’t have to worry about this, but for those who don’t, the simplest course of action is to ask your fellow palm oil farmers to recommend the least expensive, most dependable, and safest mode of transportation to you, especially those that are located in your area.
Present Yourself To Retailers And Customers
Whether the work you put into stages 1 through 5 won’t be in vain will depend on how well you market your company and the caliber of your product to consumers. To thrive in this business in Nigeria, you’ll need a strong marketing strategy, which should be included in your business plan.
This is because there are numerous palm oil growers in our country who are also looking for clients, and clients will buy from someone who presents his company well.
Prior to purchasing or processing your palm oil, it is more wise to source for your potential retailers. As a result, you will always have a ready market. You can find retailers amongst market sellers, traders, and housewives, etc.
Also, using social media platforms such as Facebook, Twitter, and Instagram and leveraging on SEO, Facebook Ads, and Google Ads will increase the visibility of your business. In other words, your business will reach more people, and you will get new customers, thereby helping you grow your customer base. Additionally, traditional means of adverts such as word of mouth, referrals, partnerships are other important methods of getting customers.
Additionally, since palm oil is utilized only in Nigeria and Nigeria is one of the few nations that produces high-quality palm oil, you can export it to another nation.
Alibaba.com, a website known for linking suppliers or manufacturers with buyers, is one of the reliable places to find international buyers if you’re thinking about exportation and gaining customers abroad.
How to Grow Your Customer Base in the Palm Oil Industry
Give samples of palm oil to traders or merchants in the market and the neighboring hamlet by putting a tiny amount of oil in a small container, such as a 100cl bottle. At this point, reaching out to additional clients and bringing your business to their doorstep is more important than turning a profit.
The palm oil marketers will be the ones to bring other customers to you in the same sense that you tested high-quality oil. If you distribute ten samples to ten stores, and each retailer refers two customers to you, that adds up to 20 new clients for your company, and the cycle will continue in that way.
How to choose the price at which to sell your palm oil
The price of oil is first and foremost location-dependent. How accessible you and your company are, as well as how skillful you are in dealing with consumers during negotiations However, avoid overcharging or making your things outrageously expensive because doing so may cause you to lose clients.
It’s a business, therefore keep in mind that competition is waiting to utilize pricing as one of their techniques for retaining customers.
Price your product so that you are happy with your profit margin and the customer won’t feel taken advantage of. This will guarantee that they can do business with you again in the future. Keep in mind that loyal clients are better for business than transient ones.