Palm oil is an essential commodity found in every home, restaurant, hotel, eateries etc. and even in some manufacturing companies. Just as food is important to every human being, so is palm oil one of the essential nutrients needed in making food edible for consumption. Almost everyone in Sierra Leone consumes palm oil while cooking or frying. This makes it a highly demanded commodity and a big business opportunity for the small, medium or large scale business investor.
Oil palm has been an important cash and export crop in this country. After the civil war (1991-2000), production rebounded to around 195,000 tons despite the fact that Government plantations were badly neglected, comprising mainly of aged, low yielding trees. According to an agric expert, palm oil business is a silent millionaire maker. Since it is a seasonal business, you can do it part time, full time or you can just allow your money to work for you as you supervise the storage. It can be a white collar business or a dirty business, depending on how you want it.
Processing of Palm Oil
Modern processing of oil palm fruit bunches into edible oil is practiced, using various methods which may be grouped into four categories:
Traditional Method: This is a method by which palm is processed in a local way. It is done without the use of machines.
Small Scale Mechanical Unit: Processing units handling up to two tonnes of fresh fruit bunches (FFB) per hour are considered to be small scale.
Medium Scale Mills: Processing of 3 8 tonnes of FFB per hour is considered as medium scale.
Large Industrial Mills: This is a method whereby processing of the palm oil is done in big factories. Large scale refers to mills that process more than 10 tonnes of FFB per hour. Large-scale plants features all stages required to produce palm oil to international standards.
How to Determine the Quality of Palm Oil
It is very important that you get the right quality as palm oil can be differentiated by the levels of its processing.
Type A: SPO
Type B: TPO
Type C: SLUDGE
Type D: ROUGH
Type A: SPO Low Water Content
Best quality used for consumption, food industries, etc. Can also be used for soap making
Type B: TPO High Water
It is used for soap making, especially Black Soap.
Type B, TPO, Type C: SLUDGE and Type D: ROUGH cannot be stored for the purpose of reselling. They are used by companies in the production of certain types of soaps and cosmetic creams etc. These types are not supposed to be stored. If you store them for 3 5 days, it begins to smell. So when buying, you have to be careful so that the suppliers don’t give you type B for type A.
Non Edible Uses of Palm Oil
Palm oil has non edible uses which are of great economic value and are a good money making opportunity for those involved in it.
Soap / detergent
It is used in lubricating machines
It is used in the bakery to grease bread making equipment
Used in drilling mud in the petroleum industry
Used in the plastic industry
Used in the production of bio-diesel
Who should we be involved?
You can start with whatever you have in your hands and before you know it, your investment will have maximized.
Seasons of Palm Oil
Palm oil is a seasonal product and it has two seasons:
First Season is between February to May. During this period palm oil is in excess so its very cheap when buying from the local people and companies processing palm oil. You can buy in bulk and store.
Second season is between September and December. And this is a very good time to sell.
A lot of market women are involved in just the buying and selling of palm oil; they are not involved in the storage of the product. During peak periods, palm oil is sold cheaply. If you buy in large quantities and stock; during the lean periods, you bring out your palm oil and start selling. That same keg of palm oil you bought can be sold at four times the price you bought it. The higher your investment, the higher your profit. You can also start by buying in kegs and reselling in bottles.
We have retailers who always buy in bulk. The retailers don’t stock oil. They just buy and resell immediately for their daily and weekly needs. So, once you are able to locate one, you will have a higher demand than your supply. Retailers are always in abundance during the scarcity periods (when production is low). When you have good oil, you will always have customers.
Good Storage System
i. Plastic kegs and drums must be clean and dried properly.
ii. Store on pellet or wooden platform.
iii. Kegs should not be put on the ground directly.
Management of palm oil Storage
The major threat to Palm Oil storage is the soldier ant. They are ants that move in thousands and group of thousands. In order to avoid these ants from entering your oil, you must
1. Make sure you clear the bushes around your environment.
2. Fumigate if necessary.
3. When you store in kegs, it is better you put the keg in a bowl and fill the bowl with used engine oil.
4. If you store in a drum, put the drum on a tyre.
5. Ensure you seal your drum properly and your keg is well tightened.
Government incentives for investors of palm oil
The current Government administration is actively promoting two export-oriented cash crops for the production of agrofuels: oil palm and sugarcane. For that purpose, the Government created the Sierra Leone Investment and Export Promotion Agency, SLIEPA as the country’s official agency “to assist and inform investors and exporters.” The Sierra Leone Investment and Export Promotion Agency (SLIEPA) is in the process of earmarking and preparing a number of suitable sites for 10,000+ hectare palm plantations”. Additionally, SLIEPA “has a team dedicated to helping agribusiness investors handle land, infrastructure and other issues.
The incentives provided by the government are extremely generous. According to SLIEPA, they include:
– Foreign companies are able to lease land for up to 71 years, and lease terms are being further improved
– Leases on good land range from $5 to $20 per hectare per year
– Basic labour costs of $2-3 per day
– Flexible labour regulation, permitting productivity-linked payment structures
– Attractive tax rates, with 0% taxes and duties for qualified investors
Two additional factors also according to SLIEPA make investments even more attractive:
– President and Cabinet have identified agribusiness as key to development of the country and are ready to work with investors to assist with land leases and other requirements
– International agencies are eager to support rural development and may be able to assist with project financing, small-holder training and outreach, supporting infrastructure.
Introducing M,W & B Questions + Answers
Dear Business Awoko reader at last whether you’re giving praise, have an idea, asking a question etc, this is where you express it. You can either send it by email or sms only to 078973966 or 002348023254577. This service is absolutely free. So what are you waiting for? Start sending your questions or suggestions.
John F Fowler .MCIM, is an International marketing and business consultant, Motivational speaker and Author. He is currently the founder and president of Trinity Empowerment Center a non governmental organization with a vision to empower youths in starting and sustaining small businesses in developing countries. for comments or questions send email to [email protected], or