Crude Palm Kernel oil Processing Business

palm kernel
By Yemisi Ogbe CC BY-SA 4.0, via Wikimedia Commons
Palm kernel is the raw material used in producing palm kernel oil. The machinery used in the production process is manual or fully mechanized equipment.
Traditional manual extraction accounts for 45% of kernel oil extracted in West Africa. For large scale commercial processing plants they use fully mechanized oil palm mills.
The equipment is capable of producing edible cooking oil for homes and commercial applications. To convert crude kernel oil it goes through a process of crushing, extruding, cooking and filtration.
Oil palm trees are predominantly cultivated in West Africa. This provides a valuable cash crop for entrepreneurs in that region interested in starting a palm kernel oil processing business.
Crude Palm kernel Oil Processing Business
The Product
The raw material you need in your processing plant is palm kernel. Palm kernel grows in bunches on oil palm trees.
The edible oil is extracted from the kernel is different from palm oil extracted from the pulp of the palm fruit. The kernel oil has high lauric acid, cholesterol and lots of saturated fat. The oil has a longer shelf life than groundnut oil and used to manufacture soap.
Kernel oil Supply and Location
You need a steady supply of palm kernel to start a processing plant. Since the tree is native to West Africa your factory is best located close to the source. Secure trade contracts with farmers and major suppliers of the kernel.
Financing the Palm kernel Processing Company
Processing crude palm kernel oil is capital intensive. The funds are needed for purchase of raw material, labor and leasehold agreement.
Oil processing machinery are expensive so adequate funding is essential. Seek loans from financial institutions in the host country.
West African governments provide tax rebates and subventions to encourage local industries. There are many cooperatives and farmers union eager to finance small agriculture businesses.
Palm kernel oil Processing
The factory receives the palm kernels and washes them. The cleaning and sorting process removes impurities such as sand, stones and dirt.
The kernel is the fed into the crusher and broken down. The kernels are then separated through either the wet or dry process.
From the extruder it goes to the cooking section of production. Once cooked the kernel are pressed and filtered to get the palm kernel oil.
The flow chart for the production of crude kernel oil
Palm kernel supplied – washed –crushed –extruding –cooking – pressing – crude palm kernel oil
Hire Staff
Hire experienced machine operators for your kernel oil factory. You need cleaners, a receptionist, security, driver and plant manager. Hire casual workers as loaders and auxiliary staff from host community.
Pal Kernel Oil Plant Equipment
Your kernel processing factory needs a crusher, extruder, cooker and pressure press. There are many fabricated and branded machinery in the market. Top grade equipment will produce better quality kernel oil than fabricated machinery.
Marketing the Kernel Oil
Sell you crude oil to wholesalers and retailers in your industry. Network with manufacturing companies that use crude to make products.
Use traditional advertisement to increase product visibility and develop an effective marketing strategy.  Build a website for the production company to attract international customers.
Write a Business Plan
Write a business plan and carry out a feasibility study. Locate your industry close to the source of raw materials.
Make sure the factory has all the essential utilities such as water and electricity. Understand the manufacturing process and hire an expert consultant.
Register the plant as a limited liability company. Get a trade permit and manufacturers license before starting the enterprise.
You need company insurance and value added tax. Exporters need export license and letter of credit.


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