Palm Oil Processing and Production Business [Comprehensive Guide + Business Plan]

palm oil processing and production

Over the past weeks we have covered in detail a lot of agriculture business ideas; many of you loved it. In this post we will discuss palm oil processing and production. If you want to go one step further, I have a ready-made business plan to make things easier for you.

− Information Resources −

We’ve Got E-Books and Business Plans for You!

They contain even more detailed information to start and run your business. No fluffs, just hardcore information you won’t find anywhere else.

Click Here to Get Them

This business is so vast it would require a whole book to cover its entirety. In any case, I promise to give you the basic knowledge you will need to start your own palm oil processing and production business.

Nigerians are beginning to realize that the most reliable means of sustaining individual and national development at the moment is agriculture.

The businesses opportunities that lie in the agricultural sector are so enormous. For instance, you could chose to go into livestock rearing with a good number of livestock to choose from, or you could engage in crop production with hundreds of possible crops to cultivate.

The other side of agriculture production is processing – converting raw agricultural produce into its finished, consumer-ready form.

Read This: How to start bean flour production (Comprehensive guide + E-book)

In palm business, you can make money from its production (farming), processing (making market-ready red oil) or both. Whichever you choose, I don’t need to tell you that palm oil dealers are dancing serious skelewu to the bank in this recession. Have you checked the price of red oil recently?

Why you should invest in palm oil processing and production

Palm oil is a multipurpose food ingredient used all over the world. During my undergraduate days at the university, i never considered myself fully stocked with foodstuff until I had red oil. With palm oil you can prepare any type food.

As such, the demand for the commodity is always high. I always took money to the woman who sold palm oil, and she always took money to her suppliers who would take money to the producers and, you get the drift.

  • Palm oil is an important export commodity which has a high demand in Africa and even Europe. Africa produces just 5% of the world’s demand for palm oil. Leaving a large portion of production and exportation to Indonesia and Malaysia.
  • 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.
  • Palm oil has a long shelf life. It can be stored for over one year without losing nutrition, taste or quality. You may have observed people buy red oil during one period of the year and sell in another period. This is good business.
  • It has low cholesterol level, improves eyesight, contains vitamin E, and increases the body’s immunity to diseases.
  • Palm kernel oil is also extracted from the palm kernel fruit. Therefore if you want to go into palm oil processing, you will also get a bonus for extracting palm kernel oil from the seeds which is equally important. No part of palm is wasted.
  • The weather condition in Nigeria favors the growth and cultivation of palm trees.

Prospects in the palm oil production and processing business – different ways you can get involved in the palm value chain

The wonderful thing about going into palm oil business is, it embraces all entrepreneurs irrespective of their financial capacity. For instance, if you have limited finance, you could choose buying and reselling of palm oil.

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With a bigger budget you could focus on cultivating the palm fruits, and with an even larger budget you can set up a palm oil processing plant. It’s entirely up to you – you could even combine the three.


This aspect of the business involves buying palm oil from the producers and storing them until the price goes up.

Palm oil is usually produced between March – May. During this period the product is surplus and cheap. You can buy palm oil in any quantity from the millers at this time and store them up till the time when palm oil becomes scarce and the price goes up.

Selling the palm oil around September-December usually yields over a hundred percent interest. You could also buy in large quantities and store for export.

palm oil sale
Kegs of palm oil ready for distribution and sale

Alternatively, you could buy palm oil from the eastern part of the country where it is cheap and sell in the northern part.


This is another aspect of the palm oil business. If you have your eyes on long-term investment, this aspect will be perfect for you.

Starting an oil palm plantation is capital-intensive, but in the long run the returns are massive. Palm oil mills and sellers will depend on you to operate.

The south-eastern part of the country is filled with fertile land suitable for the growth of palm trees. In Nigeria, majority of the oil palm plantations are located in Abia, Anambra, Edo, Cross-River, Ondo, and Enugu.

After acquiring a land, the next step is to plant the palm seed. Look for a good variety of seed to plant; this will ensure fast growth and maximum yield. Some of the best varieties of palm seeds are the Dura and Pisifera variety.

Oil palm trees take about five years to mature but with a good variety, the yield is high and the market is ever-present.


This involves extracting oil from the palm fruits. Extraction of oil can be done locally, however the process is usually time-consuming and very wasteful. A lager amount of oil is left un-extracted when using local methods of extraction. To get the most of the business, you will need to use mechanical method to extract the oil from the palm fruits.

Setting up a palm oil processing plant

a palm oil processing plant
A palm oil processing plant | Image:


The first thing you will need to do is to get a good location to set up your processing plant. It is best to locate your plant close to oil palm plantations, doing this will drastically reduce the cost of transporting the palm fruits from the farm to the processing plant.


Setting up a processing plant is fairly expensive, but equally profitable. There are a lot of equipment/machineries that are used to extract the oil from the palm fruits.

To reduce cost of setting up the plant, I suggest you approach local fabricators who construct these machines at a relatively low price.

A detailed list of the machines you will need, what they cost and where to get them from is included in the business plan I prepared for this business.

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These machines are used to crush and squeeze the palm fruit, extracting all the oil it contains. The palm kernel seeds are also processed to extract palm kernel oil. After extracting the palm oil, you will need storage tanks to store them in.

Palm oil processing is a very labor intensive business. You would need to employ the services of professionals to install and operate the various machinery.


To take on the palm oil processing business, you will need a business plan. A business plan will show you know what you are talking about, it is required if you must apply for grants/loans and it will provide a cost breakdown for starting the business.

Not to worry, I come prepared. I have a ready-made business plan for those who are serious about starting the palm oil processing business.

The palm oil processing business plan will walk you through every step of starting this business. It comes with a fully prepared financial analysis, plus it makes it very easy for you to enter your figures and recalculate the whole thing without stress.

To get the contents of this business plan and learn how to get it for yourself, click here.


  • It is capital-intensive. Especially if you plan to go into oil palm plantation or palm oil processing business.
  • Investing in an oil palm plantation takes time before the profits start coming in. A palm tree requires at least five years before it matures and starts producing. After it matures it produces palm fruits yearly.
  • Adequate storage facilities need to be provided for the palm oil. This can be sometimes challenging especially when you have limited funds.


Your options to raise capital for this business will vary depending on which way you want to go.

To start palm oil dealership, you can basically start with any amount you have. The way I see it, you may not want to borrow money to buy kegs of palm oil and sell. You can raise this money yourself if you put in a little work.

To start a plantation or a processing plant, it also helps to have your own but due to the cost intensive nature of the business, you may want to apply for grants and loans. You can also seek and possibly attract investment from individuals.


There are many lucrative agricultural businesses to invest in. in my opinion, palm oil processing and production sits at the top for profitability. You can get involved no matter the level of capital at your disposal. There is always something you can make out of it.

− Information Resources −

We’ve Got E-Books and Business Plans for You!

They contain even more detailed information to start and run your business. No fluffs, just hardcore information you won’t find anywhere else.

Click Here to Get Them

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Share this article with anyone you know who might need the information, and send in your comments to let me know your thoughts about palm oil processing and production.

Click here to get the business plan


  1. Good business Idea, but,you didn’t include the prices of mechanical equipments, I would so love to go into it, just d financial constraints.

    • Finance is a challenge for most beginner entrepreneurs. We have several articles on different ways to raise capital for your business.

      We try not to include specific things because prices vary with time and place. I encourage to visit your nearest market and find out the current prices or do a simple Google search for some manufacturers. You can get better updated information that way.

      Thanks for stopping by.

  2. Hi Sam.
    Thanks for your mails.Please I am into Livestock that is agric birds,I sell at 7weeks for N1,200 to marketers,please which methods can one use to make more profit.I have also decided to go into buying Turkey that cost N2000 for eight weeks old and train to sell.Is it the purchasing price OK for the Turkey?
    Kindly advice me on how to make more profit and a how to prepare a business plan on livestock please.

  3. Comment:
    thanks for the ideas i wish to go into plantain farming and as well rearing snail there how can do it for not loose most of the snaill

  4. Thank you so much on this am planing to go into palm oil processing, production and distribution which I think would bring in profit fast before going into the plantation but I don’t know if one have about N2m would it be enough to start it up

  5. I like this business, and i am interested in the processing of the nuts seconded by the oil. How do i go about it since my constraint is fund?

  6. hello brother i was the person that sent you text in the morning regarding your palm oil production business plan, i am still intersted on it, but i want to ask question, can i start the business with 2 to 3 million since i have upto 200 inherited palm trees that produces 200 liters of oil annually. please this is the re
    son why i need that your business plan to be able to inculcate your own ideas towards establishing -the business in a big way. this reply .

  7. thank for the tips on palm oil business i am interested in buying and selling but where do i get at cheaper rate that is where in south south

  8. Thanks Sam, how much do I need to start the palm oil business, I want to be buying n selling to retailers, then where do I get good one with good price, live in Lagos


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