Investing in a Palm Oil Plantation Business

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

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

Red palm oil is used in cooking, making soap, candle and margarine. Palm kernel oil could be extracted from the nut, whilst the residue obtainable in the process of palm kernel oil extraction, otherwise called palm kernel cake, is used 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 could be made seem non-exhaustive. This clearly shows that investment made 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 establish 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 determine the nutrient status of the land. It is usually better to use the early maturing variety called’tenera,’ which bears fruits as from the fourth year.

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

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

Financial Aspect

We are recommending 50 hectares for a start. 20 hectares oil palm plantation can conveniently service a hand oil mill which will be established by the master when the plantation starts to create fruit. To establish 50 hectares of plantation, the sum of N10, 500,000 will undoubtedly be required and that is broken down as follows:

Income Analysis

An adult plantation will quickly give an investor five a lot of red palm oil annually from the fourth year per hectare. 100 metric a lot of oil could be obtained annually from 20 hectares of plantation.

A ton of red palm oil is at the least N150, 000, while gross revenue of N15 million is obtained from red palm oil.

We can also get three metric a lot of palm kernels per hectare, which gives us 60 tons from 20 hectares. This means annual income of N4.2 million. Total income realisable is about N19.2 million, whilst 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 others of his/her life. Serious-minded investors could be assisted in realising this worthwhile investment.

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