Description

Extensive market research has revealed that palm kernel oil {PKO} is an everyday goods used by individuals as well as Industries. Thus, the market is ongoing and is not dependent on economic cycles and can be described as a FMCG (fast-moving consumer goods) commodity market, hence the need for the palm kernel nuts which is the main raw materials used in the production of palm kernel oil and cake.

This report seeks to examine the financial viability or otherwise of establishing a palm kernel nut processing plant in Nigeria which involves the sourcing of un-cracked palm nuts and processing same to yield palm oil and palm kernel nuts.

The market for palm kernel oil and cake is national. With a population of over 165 million people and an estimated national population growth rate of 5.7% per annum ,an average economic growth rate of 3.5% per annum in the past five {5} years, Nigeria has a large market for palm kernel oil and cake. The demand for palm kernel oil and cake is high but due to a short fall in the supply of raw material production is low.

In 2005, in order to stimulate local production and attain self sufficiency in edible oil production, the government introduced the presidential initiative on the development of edible oil over a period not exceeding three {3} years.

Under this initiative, attention was focused on the promotion of eleven scheduled oil seed crops which are oil palm seed, groundnut seed, Soya beans seed, cotton seed etc and production target was set for each of the crops under the programme as follow

Oil Palm: 1 million hectares capacity of producing 15 million fresh fruit bunches
Groundnut: 15 million tons annually
Soya beans: 670,000 1 million tons per annum
Seed Cotton: 1 million tons over the plan period

After seven {7} years of the initiative, the domestic edible oil demand far exceeds the national production. The short fall in supply is estimated at about 50,000 tons per year.

From the above figures, it is clear that there is a large and sustainable market for palm kernel nuts in Nigeria, the basic raw materials used in the production of palm kernel oil and cake.