Investing in a Palm Oil Plantation Business

Palm oil is native to West Africa. Nigeria was once the world’s largest producer of oil palm ahead of the oil boom era, but Malaysia has now taken the leading position. Oil palm plantation and allied industries has become the key stay of the Malaysian economy. The palm tree may be used in various ways: the leaves are used in making brooms and for roofing materials (in the rural areas). The bark of the fond can be peeled and woven into baskets, the key trunk can be split like sawn timbers and used within building materials, while palm wine can also be obtained from the palm tree, as well as red palm oil, that will be readily obtainable from the fruit bunches. Pertanian

When the fruit is processed, however, the residue obtained may be used as fuel (for cooking and fertilizer to boost soil nutrient).

Red palm oil is used in cooking, making soap, candle and margarine. Palm kernel oil can be extracted from the nut, while the residue obtainable in the act of palm kernel oil extraction, otherwise called palm kernel cake, is employed as livestock feed.

Palm kernel oil is used in vegetable oil and soap making, and the shells are useful as energy source. The uses to which oil palm can be made seem non-exhaustive. This clearly suggests that investment produced in the establishment of oil palm plantation is nothing but a clever one.

The marketplace is guaranteed for all the products of oil palm plantation in this era of global food crisis.

Technical Information

To determine palm oil plantation, involves obtaining a good site where rich, well-drained acidic soils are abundant. The soil must have adequate quantities of potassium, magnesium and nitrogen. Soil tests should therefore be carried out to find out the nutrient status of the land. It is usually easier to utilize the early maturing variety called’tenera,’ which bears fruits as from the fourth year.

Other requirements include seedlings procurement, which can be obtained from reputable nurseries. Prospective investors must engage the services of agricultural experts in the course of establishing this project.

Other cultural practices are planting, regular weeding, pruning and fertilizer application.

Financial Aspect

We’re recommending 50 hectares for a start. 20 hectares oil palm plantation can conveniently service a palm oil mill that’ll be established by the master when the plantation starts to create fruit. To determine 50 hectares of plantation, the amount of N10, 500,000 is going to be required and this is broken down as follows:

Income Analysis

An adult plantation will start to give an investor five tons of red palm oil annually from the fourth year per hectare. 100 metric tons of oil can be obtained annually from 20 hectares of plantation.

A lot of red palm oil is no less than N150, 000, while gross revenue of N15 million is obtained from red palm oil.

We can also get three metric tons of palm kernels per hectare, which gives us 60 tons from 20 hectares. This translates to annual income of N4.2 million. Total income realisable is approximately N19.2 million, while the annual operating expense is put at N5.8 million.

This leaves us with net income of N13.4 million annually for the investor for the remainder of his/her life. Serious-minded investors can be assisted in realising this worthwhile investment.

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