Palm oil is native to West Africa. Nigeria used to be the world's
largest producer of oil palm before the oil boom era, but Malaysia has
now taken the leading position. Oil palm plantation and allied
industries is now the main stay of the Malaysian economy. The palm tree
can 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 main trunk can be split like sawn
timbers and used as part of building materials, while palm wine can also
be obtained from the palm tree, as well as red palm oil, which is
readily obtainable from the fresh fruit bunches.
Other cultural practices are planting, regular weeding, pruning and fertilizer application.
When
the fruit is processed, however, the residue obtained can be used as
fuel (for cooking and fertilizer to improve 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 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 can be made seem non-exhaustive. This
clearly indicates that investment made in the establishment of oil palm
plantation is nothing but a wise one.
The market 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 getting a good site where rich,
well-drained acidic soils are abundant. The soil should 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 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
are recommending 50 hectares for a start. 20 hectares oil palm
plantation can conveniently service a palm oil mill that will be
established by the owner when the plantation starts to bring fruit. To
establish 50 hectares of plantation, the sum of N10, 500,000 will be
required and this is broken down as follows:
Pre-investments: N300, 000
Land acquisition: N4, 000,000
Land clearing/preparation: N3, 000,000
Seedlings procurement: 120/ha(2400 @ N500): N1, 200,000
Other cultural practices @N100, 000/ha: N2, 000,000
Total N10, 500,000
Land acquisition: N4, 000,000
Land clearing/preparation: N3, 000,000
Seedlings procurement: 120/ha(2400 @ N500): N1, 200,000
Other cultural practices @N100, 000/ha: N2, 000,000
Total N10, 500,000
Income Analysis
A mature 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 ton of red palm oil is a minimum of 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 about 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 rest
of his/her life. Serious-minded investors can be assisted in realising
this worthwhile investment.
