Small-Scale Palm Oil Processing Business in Nigeria; A Feasibility Study

Palm oil is a major food and non-food ingredient consumed by virtually everyone in Nigeria through the use of palm oil related products. This study investigates the feasibility of small-scale palm oil processing in Nigeria, using Elele, Rivers State as case study. Information was elicited through interviews and physical observations. Manual processing and screw hand press methods were adopted for palm oil extraction from fresh fruit bunch. Data were analyzed using descriptive statistics (mode, frequencies and corresponding percentages and gross margin model) and profitability techniques (i.e Gross ratio, Expense Structure Ratio, rate of return and Benefit-Cost Ratio). The findings show that the average cost of procuring of equipment and its installations for a small-scale palm oil processing mill were estimated at N623,650.00. The gross margin return from this study was N44,000.00 while net return was N14,000.00. The gross ratio reveales that for every N1.00 return to the mill 68.00 kobo was spent on the production processes. The small-scale palm oil venture is dominated by elderly people from 50 years and above (30%).  About 34% and 32% of the processors have WASC and Primary School Leaving Certificates respectively as the educational qualification. About 50% of the processors have 16-20 years experience in oil palm processing.  The study concludes that small-scale oil palm processing is profitable and can also be a source of employment.