Description

The market for vegetable oil and soya bean 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 edible oil.
The demand is high but local supply low hence the need for importation in the past. Industry data suggest that Nigerian consumers use more than one million {1,000,000} tones of vegetable oil annually.

In 2005, in order to stimulate local production and attain self sufficiency in vegetable 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
1. Oil Palm: 1 million hectares capacity of producing 15 million fresh fruit bunches

2. Groundnut: 15 million tons annually
3. Soya beans: 670,000 1 million tons per annum
4. Seed Cotton: 1 million tons over the plan period

After about 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 300,000 tons per year.

From the above figures, it is clear that there is a large and sustainable market for vegetable oil in Nigeria.

One of the first activities when planning an oil processing business is to decide who will be the target customers.

A Market segment is a term that describes an identifiable group of customers. The different types of market segments for vegetable/cooking oils can be described in five main groups

1. Retail Consumers
2. Food service
3. Wholesale
4. Institutional
5. Food businesses

Market sectors/Types of customer

Retail: The retail sector includes the following

Households / Family

Food service businesses: The food service sector include the following

Tourist hotels/lodges
‘Fast food’ outlets
Cafes, restaurants
Street food vendors
Wholesalers

Institutional: The institutional sector include the following

Religious Organization
NGO’S
Schools
Hospitals
Military/police barracks

Food businesses: The institutional sector include the following

Bakeries
Snack food makers
Street food vendors