Palm oil and Palm Kernel business in South East (3)

Business and Economy Reporting

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Twin oils from Palm trees and rediscovering South-East lost economic glory by Odogwu Emeka Odogwu

Palm kernel cracking machine

The Palm kernel cracking machine which is in two types, according to experts has an efficiency of 90%, to an extent that, if 100 KG of unshelled palm kernel is fed into the machine, 90% of the palm kernel nut would not be broken. There are machines that crack and separate the nuts from the shell and there other machines that do not separate the nuts from the cracked shell. Your money determines the one you go for as they are available both locally manufactured using diesel and abroad manufactured mostly electricity. It can crush one ton per hour with minimal labour and land space. Machines that automatically separates the nuts from the cracked shell the price is about N950, 000 and the other machine which does not separate the nuts from the shell is about N300, 000.

If you have the palm kernel crushing plant, the palm kernel oil expeller whether it is 30 HP expeller machine or the 40 HP expeller machine with a nut roasting machine for extracting more oils from the nuts gives the factory an amazing setting.

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Market for Palm oil and palm kernel oil as well as its bye products abound even only Nigerian market is enough to consume almost everything for production and export sequel to our population of over 200 Million , ranking 7th in world. Nigerian population was 166.2 Million in 2012 according to Nigeria National Bureau of Statistics. So the local and international market is available

So there are three to four machines to make the palm oil business interesting and lucrative which are palm kernel crushing machine, palm oil processing machine, palm kernel cracking machine and palm kernel oil expelling machine.

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Aside retailers and wholesalers moving up and down the creeks searching for palm oil and kernels to buy from mills, companies from across the length and breadth of Nigeria now scout for these products too directly from mills and locals to maximize cost.

Palm nut seedling costs between N250 and N300. You will need at least 1,000 seedlings for a moderate – sized plantation.
The best separation for space during planting is 8-9 meters between two floors. Ensure you eliminate the weeds and apply fertilizers to the plants at intervals and expect your first harvest in about two years after the planting of seedlings.

Health benefits of palm kernel oil

Palm kernel oil which could be used for cooking instead of butter has zero cholesterol for the benefit of those with high cholesterol and heart disease.

Palm kernel oil keeps your skin healthy and youthful because of the presence of antioxidants loaded in the oil. Its anti-aging benefits is amazing as it prevents wrinkles among others.

For healthier skin, bones and joints, palm kernel oil is the answer because it is a source of healthy unsaturated fats and it is rich in vitamin K which is one of the most important fat-soluble vitamins that the body requires to boost bone health and also acts as a blood coagulant. It’s rich too in vitamin A required for proper vision and prevention of different eye disorders.

Aside these benefits, there are a hundred other benefits in the food industry as it can be used in commercial cooking to fry edibles. The oil has long shelf life span as it doesn’t get oxidised under high cooking temperatures and during storage, hence it a better choice compared to vegetable oil.

Palm kernel oil is filled with nutrients essential for maintaining good health like the 16-carbon saturated fatty acid known as palmitic acid.

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Its ability to grow hair is amazing as the palm kernel oil provides thorough conditioning, thickens hair and reduces hair fall by making it stronger. It not only provides a soothing effect but the desired nourishment.

Have you wondered why palm kernel oil is a major ingredient in soap and skin creams production? This is because it makes the skin naturally soft and glossy without it getting a greasy appearance, providing relief to ragged cuticles and itchy skin.

According to Chad Bjorklund, palm kernel oil is primarily composed of fatty triglycerides, with approximately 80 percent saturated fats and 20 percent unsaturated fats. Palm kernel oil can be found in a number of products, including margarine, vegetable oil and shortening, creamers, chocolate and ice cream.

Imo state oil palm experience on the high

Farmers in Umuehihe Village in Okwu Ikeduru Local Government Area of Imo have commended the Federal Government for establishing a palm oil processing factory in their village.
Minister of state, Niger Delta Affairs Prof. Claudius Omoleye, inaugurated the project in Ikeduru, Owerri.

Mr Fidelis Ewurum, a farmer who deals in palm trees said that the project would go a long way in alleviating the suffering of the people most of whom he said were palm oil producers.

He explained that the manual method of producing palm oil would soon be a thing of the past, as oil production would be easier with the sitting of the factory in the area.

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“We are very happy for this factory, all we need to do now is to harvest our palm fruits, bring them to the factory and produce our oil mechanically with a lot of ease. “Before, if we cut the palms, we used our legs to process and we lost a lot of oil in that process, but with this factory we will make more money because more oil would be saved.

“It will also help all our youths to be busy in the village instead of idling about. “We thank God for our son, Ndubuisi Osuji, who brought this project to us, it shows he has our interest at heart,” Ewurum said.

Mrs Priscillia Onukaogu, a dealer in palm oil, said that a lot of stress had been taken off from the shoulders oil palm producers in terms of processing palm oil. Priscillia, who said she donated part of the land on which the project was situated, was happy with the sitting of the factory in the village.

She said she was willing to pay the cost of getting her palm oil produced in the factory. “I am very happy now, I like the project, with this factory in place, I will just go to my farm bring my palm fruit here and turn it to palm oil. ‘’I sell it without stress and make more gain than before’’ she said.

Mr Ohale Okenze, the Youth Leader of the community, noted that, palm produce was the greatest economic activity of the members of Umuehihe village.

“Palm is a heritage on our community, lately; our people have not been competing economically in the market due to the enormity of work required to process palm produce to finished products. “The whole world has left us behind through technology yet, our women continued to struggle at backyards to produce oil palm for their meals as well as to sell to generate income.

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“A factory of this status will bring so much relief to our women and it will also generate employment for our youths and reduce crime rate in the community,” he said. He, however, called on the Federal Government to construct the 3-kilometer road leading to the factory for easy transportation of finished palm produce to the market.

The factory, Integrated Oil Palm Processing Factory was initiated by Mr Ndubuisi Osuji, Permanent Secretary, Strategy and Policy Services Office, Office of the Head of Civil Service of the Federation.

The project was later executed by the Ministry of Niger Delta Affairs, with all the machines locally fabricated and produced in Nigeria. The machines had the capacity of producing five tonnes of palm fruits per hour. Federal Government has spent more than N90 million on the Integrated Oil Palm Processing Factory, Umuehihe Village in Imo.

Mr Ndubuisi Osuji, Permanent Secretary, Strategy and Policy Services Office, Office of the Head of Civil Service of the Federation, said that the project which was the first of its kind in the state, “is being replicated in all the states in the Niger Delta region to boost agriculture.’’

Osuji said that the project will ease the stress the people of the community in processing palm oil and the value chain of the produce from the factory would turn around the economic fortunes of the community, observing that there was huge economic potential in palm tree farming.

“Cultivating palms and producing oil is the major economic activity of the people in this village and they are very happy with the project. “The women of this community have suffered a lot in terms of manually processing palm oil, it is a very tedious job to do but with this factory, their stress will be eased. “Besides producing high quality palm oil, the machines also cracks the palm kernel and its shell and its fibre are further used as a source of fuel for making fire,’’ Osuji said.

The permanent secretary noted that the factory had four major components such as the factory building, the processing machines, borehole with its overhead tanks and electricity generating machines, among others.

Mr Ademuyiwa Ajiboye, the contractor of the project who also confirmed the amount spent on the project, said that the construction started in July 2017 and was completed without challenges.

Mr Nwabueze Akobundu, the Managing Director, Basicon Engineering Ltd. that fabricated the machines, said that the factory would enable the farmers to make more money. He said the factory was designed to produce one to five tonnes per hour and a storage plant was also designed to help the farmers preserve their oil for, at least, one year. Akobundu also said that the members of staff of the plant were trained on how to maintain the machines for sustainability, adding that the villagers would pay a token sum before processing their palm fruits.

There is another success story in Imo in Palm oil business like Adapalm in Ohaji Egbeme. According to BusinessDay abandoned for years and overrun with weed and snakes due to poor management by Roche Group, which took over the plant from Imo State government. There are Palm oil species like ‘Dura’ which does not produce much oil, and ‘Tenera’, which produces much more oil, though scarce. Benson Umeh, a miller from Imo said that if Dura produces 75 litres , Tenera produces between 125 and 150 litres.

Imo State government later entered into a joint venture (JV) with VTU, a Vietnam investor, which has invested over N300 million into the mills, fed from the 4,300 hectares of oil palm plantations in Ohaji. The mill currently produces 30 tonnes of palm oil per hour.

Jude Oparah , Operations manager , Imo-VTU oil palm was quoted saying: “Many Chinese companies in Nigeria and abroad have already contacted us. The demand is high and it is very difficult to meet it.

“There is a room for expansion here and we intend to go downstream. We want to start crushing kernel to get Palm Kernel Oil (PKO) and process oil to get margarine, detergents and other things”.

There are also palm trees and mills in Umueru village in Umuagwo community, Imo state and almost all the communities in Imo state. There was a company Risonpalm Limited in the community known as Siat, but recently acquired by a big player, Presco. Small scale millers no longer buy fresh palm nuts from Umueru palm plantation.

National Association of Palm Produce

For Henry Olatujoye, national president, National Palm Produce Association of Nigeria (NIPPAN): “Large and established firms are only cultivating 400,000 hectares, which are insufficient. Smallholder farmers are doing above 900,000. However, established enterprises need to cultivate up to two million hectares to plug the gap’’.

For Nigeria to be reckoned in this palm oil and palm kernel business, it needs to plant at least 300,000 ha in the near future, which is an investment of over N700 billion.

He wishes a semi mechanized Mercedes milling machine that costs nothing less than N2.5 million with boiler, conveyor, presser and digester would be provided for clusters of farmers who organized themselves.

Types of palm trees, importance and its oils and usage

Though experts claim there are about nine main types of palm trees depending on the climate of each region, but research shows that there are about 2600 species of palm trees of which majority of them are planted in tropical, subtropical, and warm regions. There are Date Palms, Zombie Palm Trees, Windmill Palm, Foxtail Palm Tree, Caranday Palm, Spindle Palm, King Palm, Alexandra King, King Bangalow Palm Trees, Purple King Palm, Florida Thatch Palm and Triangle Palm Tree.

According to Anaekwe Everistus Nnamdi who is an expert in the business, the Oil Palm tree is one of the greatest economic assets a state or nation has, provided its importance is realized and potentials fully harnessed.

Everything from the palm tree is not only a raw material for another purpose but instructive. The palm tree wood when pressed is used to extract oils for soft drinks, cooking, preservative, syrup and soap. There is the red palm oil and the palm kernel oil as well as the pulp for feeding animals.

And, the wood fibres are used for making hats, parquet flooring, and hammocks, whereas, the wood itself is used to construct wicker furniture. The palm tree chips are used to fuel the factories.

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Without palm tree, there is nothing like palm nuts from where we get the palm red oil, palm kernel oil and other raw materials from the palm tree. We would have focused only on palm kernel oil but let’s too focus on its twin sister, palm red oil in other to drive our points home that South Eastern Nigeria could still go back to Palm Oil business and remain buoyant in comity of states with its attendant export gains. Palm Kernel Olein is RBD Vegetable Oil- fully Refined, Bleached and Deodorized used for Ice cream and Palm Stearin which is the solid whitish crystalline substance got during fractionation of Refined Bleached and Deodorized Palm Oil used by the food industry for mixing flour for making pastries like biscuits, dough for pizza or snacks.

Palm Fatty Acid Distillate (PFAD), high free fatty acid that is mainly used by cosmetics and soap industries. It is a by-product of the refining process. Empty Fruit Bunches (EFB) which is a source of fuel or organic fertilizer for the palm trees.

Palm Fibres and Palm Kernel Shells used as organic fertilizers for melon and pineapples and source of fuel material for blacksmiths for their casts and forges, and as charcoal, and can be used as a light cement substitute material called Pozzolana.

Experts said that 25 metric tons of good palm kernel nut yields about 10 metric tons of Palm Kernel Oil (PKO) and about 13.5 metric tons of Palm Kernel Cake (PKC).

Palm Kernel Cake sales for about N100,000 per tonne. The Palm Kernel Oil itself is sold for about N120,000 Naira per tonne, the Sludge sales for N100,000 Naira per tonne and palm kernel is 80,000 Naira per tonne. You can o he arithmetic to understand that it is an economic viable option to rejuvenate the dwindling economy of Nigeria and south east in particular.

It is unfortunate that three decades ago, Nigeria controlled 45% of the global palm oil market, whereas it ranked fourth now with almost 85% of the global palm oil market controlled between Indonesia and Malaysia.

These two countries came to Nigeria for training on the red gold when we abandoned it to pursue the black fossil fuel. Today they have consolidated and control the largest chunk of the over $88billion and over $11.3billion Global Palm oil and palm kernel oil markets.

Most people in the smallholder oil palm business are responsible for about 80% of the industry output. And always busy and were not in the mood to be interviewed and as well not ready to give their names. They boil and pound the palm themselves with traditional wooden pounders. They want milling machines but had no money for that which costs between a N100,000 and N500,000.

According to Peter Kilby, a United Kingdom-based researcher, Nigeria earned £40 million in foreign exchange from export of palm oil and palm kernels in 1965. Nigeria controls a little over 1.7 percent today in the world. Nigeria produces between 930,000 metric tons (MT) of palm oil and 1.3 million (MT) annually, behind Indonesia’s 36 million MT output; Malaysia with 21 million MT; Thailand with 2.2 million MT, and Colombia with 1.3 million MT.

It is strange to learn the statistics from National Bureau of Statistics (NBS) reported in the second quarter of 2017 that Nigeria imported N7 billion worth of Crude Palm Oil (CPO) which is red palm oil within the three-month period, with Indonesia accounting for 76 percent of that total import.

Solidaridad Networt, an international organisation data last year showed that Nigeria imported 552,000 metric tons of CPO in 2016. Kilby’s research showed that the country had 67 oil palm mills in 1964 across the country, with fruit capacity estimated of 201, 000 tons. These oil mills have been abandoned to say the least and several oil palm trees died because of Dutch disease.

Processing of oil palm nuts in the mill to extract red oil from fresh fruit bunches from the fleshy outer mesocarp is the first stage of processing, then the crude palm oil, CPO and the vegetable oil.

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Palm oil and palm kernel oil as export commodity

Most times we don’t talk about the apricot palm kernel oil when we speak about palm trees. But the palm kernel oil is the most important feedstock used in the production of detergents and some consumables. It is non-greasy, and enriching emollient. If applied directly to the body, it can prevent acne, inflammation, dry body and removes dark circles below the eye, because of its revitalizing nature.

Palm Oil, Palm Kernel Oil and Palm Kernel Shells are all export commodities. Nigeria is 4th largest exporter of palm oil produce. It exports about 1, 000,000 metric tons of Palm Oil estimated to over $2 Billion depending on exchange rate. Can’t we do better than this? Malaysia and Indonesia who came to borrow how to cultivate and process palm trees from Nigeria are today’s world’s largest exporters of Oil Palm Produce.

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It does not include other palm tree products like Palm Kernels Shells (PKS), Palm Kernel Oil (PKO), Palm Wine (PW) and Refined Bleached and Deodorised Palm Oil and Palm Kernel Oil, RBD-PO and RBD-PKO. Who and who knows about these and how to get these oils from the palm tree? And, how many are aware of the necessary documentations for exporting palm oil related produce.

Most people are not aware of the processes needed for exporting oil palm produce, and other cash crops even with a foreign buyer for their produce. Fraudsters are everywhere seeking who to dupe.

But, once your business is registered with the Corporate Affairs Commission (CAC) and Nigerian Export Promotion Council Registration (NEPC) to help display your products in foreign trade fairs and connect you with buyers.

There are other documents that you require like the commercial documents detailing type and number of produce as well as shipping cost; quality documents from regulating agencies like ministry of Agriculture and NAFDAC to alert the shipping agency that the produce is ok and the buyer that the quality of the produce. There are other documents like the shipping and some tariffs as well as other preliminary and post incorporation matters.

With China topping the list of importers of Palm Kernel Oil (PKO) in the world, business opportunities for export of PKO abound after sealing agreements with the buyers, getting issued an Irrevocable Corporate Purchase Order, and signing a Sales and Purchasing agreement.

The shipment could be done on either Free On Board (FOB) or Cost, Insurance and Freight (CIF) basis. Where FOB means you cover the cost of the goods and every other thing till its arrival at the shipping point, and CIF means that you cover the cost of everything including insurance and transporting the goods to the buyer’s port of destination. Europe imports palm oil for food, personal care and biofuel industries.

……to be continued.