You can start a palm oil business in Nigeria and make up to or even more than hundred percent returns on investment. Palm oil business is one of the lucrative small scale businesses in Nigeria I have ever seen, and as profitable as it is, the business is has little or no risk at all because you can never run into loss unlike many other businesses that are full of risk. This is one of the businesses I love so much because I have been in the business for more than 8 years and I have never regretted investing in the business even for a second. I decided to write this article because of several phone calls and messages I have been receiving from people who want to start palm oil business for the past two months. As part of my determination to help people and impart lives positively, this article will focus on how to start palm oil business in Nigeria.
Recommended reading: Before you continue, try to read lucrative small scale business in Nigeria to know more about this business.
Red palm oil Benefit and Uses
Red palm oil contains a lot of carotene (essential for vitamin A), vitamin E and mono saturated fatty acids. It has become a must use for
everybody due to health benefit of those essential nutrients present in it.
As we all know, red palm oil is used for cooking, there is no home in Nigeria that does not use palm oil and the rate of consumption is on the increase due to the awareness of health benefit of palm oil and because it prevents blindness.
Palm oil is used by big manufacturing industries for ice cream, margarine, vitamin supplement, cosmetics, personal care, and toilet soap manufacturing etc. So we can see there is a big market for this farm produce and that makes it a business with absolutely no risk because you can never run into loss no matter how terrible the economy may be provided you buy quality product and buy at the right time.
How to start a palm oil Business
There are two seasons for palm oil business which are the peak season when the commodity will be cheap and off-peak season when the price will go up.
You can buy the commodities for as low as N4000 during the peak season, the price does vary every year but that is the average price you can get it and that is how it has been for the past 3 years. The peak season is between the month of February and April and so if you want to do this business, you must have gotten your capital ready before this time, so as to be able to buy immediately the price drops for storage.
The off-peak season start immediately after the peak season but you will have to wait till around July or August before you can sell. The best time to sell the commodities is around November but if you are in need of the money for another business or you cannot wait until that time, then you can sell in July or August.
There is a method we use as experience people in this business and the method is simple. We buy and sell up to two or three times in a year depending on the market study and make over 100 percent on investment at the end of the business year. But I will advise the beginners to follow the first method I explained above, although, the returns on investment may be less than 100% but you will be on the safe side.
The following are the steps you will take to start palm oil business in Nigeria:
Source for capital early: Get your capital ready as early as February so that you can buy palm oil at cheap prices, so that you will be able to maximize your profit.
Get a store room: you will need to get a place where you will keep your commodities after purchase. If you have a spare room in your house that will be ok, if not, you may need to rent a shop to keep your commodities safe.
Buy the commodities: There are several places where you can buy palm oil in Nigeria. The leading palm oil producing states in Nigeria are: Ondo, Edo,Akwa Ibom, Abia, Rivers, Imo, Bayelsa, Cross River and Delta. You can get the commodity in major market in those states.
Ensure you buy quality palm oil so that you will not have problem selling them. You may need to consult the experience people in this business at this stage to guide and help you on how and where to get the best palm oil in your area.
After purchase, just transport you commodities to your store room for storage.
Storage: Palm oil storage is very simple. All you need are 25 litres kegs that you will use to buy them. You can also store in drums, if you prefer that but kegs are ok. Look for planks and put them on the store room floor before packing the commodities inside. This is done to avoid palm oil from solidifying because it does not like a cold environment especially cement or tiled floor. After that you can then pack the kegs inside the store and arrange them on the planks and on top of one another.
Wait for Off peak season and sell: The next thing is to wait for off peak season when the price will rise and then bring out the commodities for sale. Depending on your area, you can just look for a vehicle to pack the commodities to a major market where this can be sold in large quantities and you get paid immediately.
If you’re in major cities like Lagos, Ibadan where we have many food companies, you can contact the companies to supply the commodities, but make sure, you’re paid before you supply.
You can also sell to the people that trade with palm oil (wholesaler) and get your cash, remember not to sell on credit. Palm oil is a highly sort after farm produce and you will always get market for your commodities
What are you still waiting for? You should start planning how you will get enough capital to do this business as we approach another peak season. Try all your best to get enough capital because the higher the investment, the higher the return. You can invest up to N500, 000 or even 1 million naira depending on the amount you’re having.
Why keep your money in bank for people to do business while there are many lucrative businesses in Nigeria you can also invest your money in and get good profit instead of nonsense interest you get from them. I have resolved never to keep my money in banks, but instead, to do business with it. What of you?
Meet me in the comment section for any question and I will be glad to answer as soon as possible.
You can also contact me through the contact page for consultation about palm oil business and I will be glad to help you achieve your goal.
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