The palm oil business is a very profitable enterprise if you are thinking of becoming an entrepreneur in the agricultural sector.
It is possible for new and experience farmers to achieve success. Did you know you can get more than 100% ROI (Return on Investment) in this business?
It is very easy to start and manage your own palm oil industry. Here, we share the things you will need to get started.
Is there a demand in Africa? Where is palm oil used?
Palm oil is used in different parts of the world, including Africa. Palm oil can look different, depending on where and how it was produced. We have the groundnut palm oil, palm kernel oil, red palm oil, white palm oil and more.
Today, palm oil is in high demand in Ghana and all over the world.
What makes palm oil so special?
It is a storehouse of vitamins! The kernel oil, for example, is high in saturated fat which is a great alternative to trans fats. The red palm oil has lycopene and beta-carotene, an excellent natural antioxidant.
Here are some common areas where palm oil is being used:
2. Manufacturing ice cream, margarine, etc
3. Personal care (soaps, lubricants, lotions, etc.)
5. Production of drilling fluids
7. As an alternative to mineral oils
8.Production of water treatment products.
In order to create a business plan, you should consider these industries and choose the one on which you want to focus.
The Palm Oil Business Plan
There are many ways to get a lot of money out of the palm oil business in Ghana.
1. PURCHASE AND RESALE PALM OIL
If you focus on this area, it means you purchase oil products where the prices are low. Thereafter, you preserve them in storage then resell them. Sounds easy, right? Here are a few details you need to know:
First, you need to have enough capital. The amount depends on the scale of business you want to run.
It is very important to have enough money before buying the oil products.
The second step is to find a mode of storage. You will have to preserve the oil for a while before selling so it is important to have your storage space ready before you begin.
It has to be stored in a cool, dry and safe place. You can rent a space or even use a room in your house. You also need kegs to store your oil beforehand. Most people make use of 25-litre kegs.
Buying The Palm Oil:
So, when you have enough capital, storage and already have an adequate number of kegs to keep your oil safe and clean.
The next step is buying the oil. Before starting your business, you should consider different aspects that may or may not work for you.
When you are dealing with agriculture, it is important to observe the season. The best time to buy palm oil is at the peak of the harvest season when there is enough of the oil around. The peak is between March and May and during this time oil is very cheap.
Don’t be stingy when buying the palm oil. The quality is crucial and is worth every penny!
Selling The Palm Oil:
Now you have been waiting patiently for the off-peak season and have stored your oil so you are ready to sell.
The price of oil begins to rise and you are ready to make some profit. You can sell.
You can sell your product to food companies, try your luck in the states mentioned above or sell to wholesalers.
You will get returns on your investments, and with the right prices, you might get more that 100% of profit.
But remember, that will not always be the case. If you don’t want to sell the palm oil only in your city, region or country, you may export it to other countries such as Singapore or China.
2. GROWING A PALM OIL PLANTATION
Another model of the palm oil business is palm oil plantation. It is an excellent choice for people who have a long-term vision.
Also, there are fewer competitors in this field.
READ ALSO: How To Start A Vegetable Farming In Ghana
However, it will take a lot of resources – investment, fertile farmland and patience. The point is to grow a plantation and then use all the products – fruits to get the oil and trees if needed.
But remember, it is all about patience- it will take about two years to have your first harvest!
All business plans start with capital. You will need enough money to buy or rent a plantation, hire workers (if you don’t want to work on the plantation on your own), money to maintain the farm and buy seeds
You Will Need A Plot Of Land:
West Africa is the best choice for a palm oil plantation because of the abundance of rain, the right amount of sunlight and fertile soil.
It is better to buy the land in your state and you do not need to purchase an extremely costly land First, you should think how much land you need.
You will need enough space, yes, but be sure you can handle it. Consider the money you will spend on buying and maintaining it and know how much you need.
If everything is okay and you are sure about the size then start looking for land that matches your desire.
Secondly, you should check the soil of the chosen land. It’s better to have it examined by experts. The quality of your palm oil depends on the quality of the soil.
Thirdly, the land has to be easily accessible. It has to be motorable, so your future buyers will be able to get there on vehicles.
You have acquired the land and now it’s time to get it ready for the plantation. You should pulverize it, loosen the soil and remove hard roots.
Planting The Palms:
First, you will have to buy seedlings.
Then you will have to plant the seedling on the prepared land. Make sure there is enough space between two plants – at least 8-9 meters.
Workers for Your Plantation:
You will definitely need labourers: No doubt about that. You will need people that will help you to clear the land and plant the trees. Also you will need to hire workers when it is time to harvest.
Harvesting, Making Oil And Selling The Product:
After working hard and waiting for two years, you now have the opportunity to sell your product.
You need to harvest the fruits of the palm, get the inner kernel inside the seed and crush it to produce the oil. In order to get the oil, you can either buy palm oil mills (modern machinery that processes the palm fruits into palm oil) rent them from farmers.
After harvesting the palm oil, you can store it at your storage and then sell it during the off-peak season.
Processing, Renting, Selling:
The last but not least is palm oil processing. As previously mentioned, in order to get the palm oil, you will need a mill (several mills).
The model for this one is easy. All you need to do is buy a dozen of mills, process your own oil and sell it or rent the mill to other farmers.
Mills are in high demand among farmers. They are used in factories and even some households.
They make the job a lot faster and with less effort.
In order to get more money, you can rent out your mills. You can also use them yourself and process the oil so you can sell (or store) it.
In general, all business plans are similar.
It is very important to have a plan and enough capital to make it happen.
Keep all these tips in mind before creating your business plan!