Why so many investers want to start a palm oil processing business in Nigeria?

Why so many investers want to start a palm oil processing business in Nigeria? The reasons are: palm oil is widely used, domestic demand is larger; The weather condition in Nigeria favors the growth and cultivation of palm trees, the raw materials is rich. The local palm oil processing technology is outdated, most palm oil can't be extracted efficiently.

Oil palm is the major commercial crop in Nigeria, you can find palm tree in everywhere

The detail reasons are as follows:

1, Palm oil is a multipurpose food ingredient used all over the world. Palm oil has many uses. Apart from cooking, it is used as raw material for industrial products such as; soap, bio-diesels, margarine, cosmetics, pharmaceuticals, lubricants, etc. This is one of reasons why so many people want to start a palm oil processing business in Nigeria.

2. Oil palm is the major commercial crop in Nigeria. The Nigerian oil palm belt covers twenty-four states, including all nine states of the Niger Delta. The Niger Delta’s 9 states account for about 57% of total Nigerian palm oil production.

3, The weather condition in Nigeria favors the growth and cultivation of palm trees.

The harvest season of palm fruit is April-June and September-November, almost most of the months are in harvest.

Oil palm is a typical crop of the rainy tropical lowlands. The tree requires a deep soil, a relatively stable high temperature and continuous moisture throughout the year. Oil palm is planted in the main field in triangular system at spacing of 9 m accommodating 140 palms per ha. Planting is preferably done at the onset of rainfall during May-June. First harvest can be taken 3.5 to 4 years after planting“.

4. Oil palm is also an essential food item. About 90 percent of the palm oil produced ends in food products, while the remaining 10 percent is used for industrial production. As a result of its many uses demand is growing fast as the world’s population increases and standards of living rise. The production of palm oil can't meet the domestic demand.

5. In Nigeria 80% of production comes from dispersed smallholders who harvest semi-wild plants and use manual processing techniques.

Most palm oil can't be extracted efficiently and easy to waste. This is the diredt reason why so many people want to start a palm oil processing business in NIgeria.

6. The World Bank played an important role in the promotion of the oil palm business in Nigeria. According to a recent World Bank document, Nigeria has been “the second largest recipient of World Bank palm oil sector projects, with six projects over the 1975 to 2009 period. One project is still under implementation. Results achieved included the plantation of 42,658 ha of oil palm, as well as road improvement and increased milling capacity. This policy is a great opportunity for most investers to strat a palm oil processing business.

7. In Nigeria, labor cost is low, during palm oil rocessing process, most work cna be replaced by manual labour. If you want to start a palm oil processing business, you only need to buy the key palm oil machine.