Abstract
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 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.
Highlights
Palm oil has been an important ingredient in the diet of many Nigerians
The cost of lister engine is significantly higher than the price the responded stated. This is attributed to other uses of the engine in Nigeria including electricity generation when connected to alternator, garri production among others in Nigeria presently
This study revealed that small-scale palm oil processing is a profitable venture while factors such as land and building, cost of Fresh Fruit Bunch (FFB), educational background and mechanization level were the most critical factors influencing profitability of the venture
Summary
Palm oil has been an important ingredient in the diet of many Nigerians. Palm oil is the world’s largest source of edible oil, accounting for 38.5 million tonnes or 25% of the global edible oil and fat production (MPOC, 2007). The global demand for palm oil is growing the crop cultivation serves as a means of livelihood for many rural families, and it is in the farming culture of millions of people in the country. Oil palm is often referred to as a crop of multiple values, which underscores its economic importance (Akangbe et al, 2011). The demand for domestic and industrial application of palm oil have continued to increase (Omereji, 2005). Palm oil is used in the manufacturing of margarine, soap candle, base for lipstick, waxes and polish bases in a condense form, confectionary (Embrandiri et al, 2011; Aghalino, 2000; Armstrong, 1998), pharmaceuticals (Helleiner, 1966), tin plating, lubricant, biodiesel (Pleanjai et al, 2007; Armstrong, 1998), fat spread, ice cream, coffee whiteners, whipping creams, fatty acids free formulation, palm based cheese, micro-encapsulated, filled milk, mayonnaise and sealed dressings, red oil/olefin (Basiron and Weng, 2004)
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