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  3. > Refining, Bleaching, Deodorizing, and Packaging of Palm Kernel Oil in Nigeria; The Feasibility Report

Vegetable oil and fat resources are indispensable to mankind as a source of nutrient and industrial raw materials. Crude vegetable oil obtained from various oil milling units is further refined before use for edible purposes. Refined edible oil is a process where free fatty acids are volatized, condensed and recovered simultaneously with vacuum de-colouring operation. Sometimes, refining process is limited to simple physical treatment such as heating and filtering in regard to refining of superior quality of crude oil.
Generally the cake in the oil is separated by centrifuge, decolouring by active clay and steam deodorization at high temperature in vacuum up to 5 mm. Hg.

Palm kernel oil is a white to yellowish oil of vegetable origin which is solid at normal temperatures and is obtained from the milling of palm kernel nuts. It is one of the best oils.

Palm Kernel Oil (PKO) is the major raw material for the production of edible vegetable oil. Ninety percent of what is called groundnut oil in our market today is in fact vegetable oil made from palm kernel oil (PKO).

If the oil is FRESH, it has lesser FFA. But if the crude oil is old and long stored, it will have high FFA rate. If 1 ton of PKO is given as an input to the refinery plant, the final refined obtainable output of RBD vegetable oil from the refinery plant will be 980 Kgs.

The 2% is the loss of soap stock which is collected as the by-product. If the FFA in the oil is more, then the losses will be more.

Generally the palm stearin is not obtained from the palm kernel oil as the quantity portion of stearin in the PKO is very less, almost negligible. So it cannot be separated. Palm stearin is obtained mainly from the Red Crude Palm Oil (CPO).

Other materials like Phosphoric Acid, Caustic Soda Flakes, Activated Bleaching Earth and Activated Carbon Black would be available from the nearby trading centres

To produce refined oil, crude palm kernel oil is processed through three refining stages, namely degumming, bleaching and deodourising.

The market for vegetable oil is national. With a population of over 165 million people and an estimated national population growth rate of 5.7% per annum ,an average economic growth rate of 3.5% per annum in the past five {5} years, Nigeria has a large market for edible oil.
The demand is high but local supply low hence the need for importation in the past. Industry data suggest that Nigerian consumers use more than one million {1,000,000} tones of vegetable oil annually.

In 2005, in order to stimulate local production and attain self sufficiency in vegetable oil production, the government introduced the presidential initiative on the development of edible oil over a period not exceeding three {3} years.

Under this initiative, attention was focused on the promotion of eleven scheduled oil seed crops which are oil palm seed, groundnut seed, Soya beans seed, cotton seed etc and production target was set for each of the crops under the programme as follow

1. Oil Palm: 1 million hectares capacity of producing 15 million fresh fruit bunches
2. Groundnut: 15 million tons annually
3. Soya beans: 670,000 1 million tons per annum
4. Seed Cotton: 1 million tons over the plan period

After about seven {7} years of the initiative, the domestic edible oil demand far exceeds the national production. The short fall in supply is estimated at about 300,000 tons per year.

From the above figures, it is clear that there is a large and sustainable market for vegetable oil in Nigeria.

Table Of Contents

Refining, Bleaching, Deodorizing, and Packaging of Palm Kernel Oil in Nigeria; The Feasibility Report
Table of Contents:


1.0 Business Overview

1.1 Description of the Business
1.2 Vision and Mission Statement
1.3 Value Proposition
1.4 Critical Success Factor of the Business
1.5 Current Status of Business
1.6 Description of the Business Industry
1.7 Contribution to Local and National Economy

2. Marketing Plan

2.1 Description of product
2.2 Product Packaging and delivery
2.3 The Opportunity
2.4 Pricing Strategy
2.5 Target Market
2.6 Distribution and Delivery Strategy
2.7 Promotional Strategy
2.8 Competition

3. Production Plan

3.1 Description of the Location
3.2 Raw Materials
3.3 Production Equipment
3.4 Production Process
3.5 Production Cost
3.6 Stock Control Process
3.7 Pre-Operating activities and expenses
3.7.1 Operating Activities and Expenses
3.8 Project Implementation Schedule

4.0 Organizational and Management Plan

4.1 Ownership of the business
4.2 Profile of the promoters
4.3 Key Management Staff
4.3.2 Management Support Units
4.4 Details of salary schedule

5. Financial Plan

5.1 Financial Assumption
5.2 Start up Capital Estimation
5.3 Source of Capital
5.4 Security of Loan
5.5 Loan Repayment Plan
5.6 Profit and Loss account
5.7 Cash Flow Analysis
5.8 Viability Analysis

6.0 Business Risk and mitigation factor

6.1 Business Risks
6.2 SWOT Analysis

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