OIL PALM PRODUCTION IN NIGERIA (Get a Business Plan & A Feasibility Study)

OIL PALM PRODUCTION IN NIGERIA (Get a Business Plan & A Feasibility Study)
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CHAPTER ONE

INTRODUCTION


Oil palm, botanically known as Elaeis Guineensis, belongs to the family of plants called palmae. It is a group of oil crops cultivated for their valued seeds or fruits which contains oils that are extracted and used by man for both industrial and domestic purposes.
Oil palm is one of the most important economic crops in Nigeria. Between 1906 and 1913, record had it that it accounted for 82.1% of the total Nigerian Domestic Export, Usoro (1974) and up till 1978 where it earned the nation about 22% of her foreign exchange (Modebe;1978).



Oil palm is an erect plant, usually without branches and may reach a height of 10m-30m. It has a trunk and leaves. The trunk sometimes called a stipe is the stem of the palm. At the top of the stem (stipe or trunk) is a bud- only one bud; this is the growing point of the palm, which makes it live and grow. It produces extensive fibrous roots and grows long fronds consisting of a large rachis from which leaflets originate. The fronds are attached to the trunk by a thorny petiole. It is a monoecious plant bearing both male and female flowers per plant. Each flower is grouped in spikes. When the male flowers fertilize the female flowers, clusters consisting of spikelets are formed. The spikelets contain the fruits which when processed, oil is produced.

CHAPTER TWO
ORIGIN OF OIL PALM
Many authors have similar but different opinions about the origin of oil palm.
Anyanwu et al (2009), wrote that oil palm originated in the tropical rainforest region of West Africa, the main belt running through the southern latitude of Cameroun, Cote d’ Ivoire, Ghana, Liberia, Nigeria, Sierra Leone, Togo and into the equatorial region of Angola and the Congo.
Uguru (2007), said that oil palm is native to Africa and it does well on latitudes 15oN and 15o S of the equator.
Cookes (2005), said that oil palm originated from America, adding that it was introduced into the tropics (Africa) by slave dealers.
Dr. Ukwuezeh (2008), shared a similar opinion on the origin of oil palm, as a native to tropical Africa, stating that oil palm fruits were only taken to the Americans during the 14th-17th centuries, and from there to the Far East, which when it was planted appeared to have thrived better in the Far East. Thus, providing the largest commercial production of an economic crop far removed from its centre of origin. He went further to elucidate the areas or countries that produce oil palm such as Dahomey, Angola, Senegal, and Nigeria.


 TRENDS IN OIL PALM PRODUCTION
Before the crude oil boom era, agriculture was the main stay of the Nigerian economy. The agricultural sector, precisely, production of cash crops such as cocoa, rubber, oil palm, contributed two-third of the Gross Domestic Product (GDP) and sixty percent (60%) of her export earnings.
But between 1969 and 1977, these contributions by the sector declined to almost 21%. In 1980, instability in agricultural policies and increased earnings from petroleum (crude oil) affected the agricultural sector adversely. The economy became heavily dependent on crude oil revenue to represent 90% of foreign exchange earnings and about 85% of total export.
Uguru,(2002), added that Nigeria lost her glory because of over-reliance on petroleum, while making agricultural (cash crop production) sector inconsequential.

TYPES OF OIL PALM
There are different varieties of oil palm; they are:
1.     The dura palms: this has thick shell with a thin pericarp and a large kernel. When processed, it gives a relatively low quantity of oil.
2.     The tenera palms: this has a fairly thick pericarp, (up to 60% of the fruit weight), a small kernel and thin shell. It gives high quantity of oil when processed.
3.     The pisifera palms: the fruits of this palm have kernels with no shell. Though the kernels are tiny, surrounded with fibres. Many of this variety are sterile. This still produces large quantity of oil.
          Above all, Tenera palm is the best because it produces large quantity of quality oil and it is non-sterile.

But to get a lot of oil however, each fruit must contain a lot of pulp (epicarp and mesocarp), a shell that is not very thick and a big kernel.
The research stations (NIFOR) have developed varieties of oil palms which produce many large clusters with fruits that have a lot of pulp, a thin shell and big kernel. This is achieved by crossing as follows:
       i.            Dura           x        Dura           =       100% Dura
     ii.            Dura           x        Tenera        =       50% Dura, 50% Tenera
  iii.            Dura           x        Pisifera       =       100% Tenera
  iv.            Tenera        x        Pisifera       =       25% Dura, 50% Tenera, 25%
                                                Pisifera (sterile)
     v.            Ternera       x        Tenera (Tenera selfed)   =       50% Tenera,
                                                50% Pisifera (sterile)

METHODS OF PROPAGATION

Oil palm is propagated by seed; there is high degree of difficulty in getting the palm seeds that will germinate. This is due to the difficulty with which moisture penetrates the seed coat S. A. Omoruyi et al, 1999. According to him, if water does not enter the seed, then nutrient mobilization for the embryo will not take place, and germination will not occur. In view to this, the oil palm seed is given special treatment before it can germinate. There are two methods of doing this.

       I.            The nut (seed) to be germinated are kept in a room where it is always very hot, or arranged on trays filled with charcoal and kept in an incubator, maintained at a constant temperature of 35oCwhile moistening the nuts in the trays at regular intervals. The nuts are examined once a week. Germinated seeds (nuts) are removed to be planted in the nursery A. A. Akerobo, 1999.

    II.            The second method involves soaking palm fruits in water to depulp them. Thereafter, they are removed, washed clean and shade-dried. The dried nuts are then placed in polythene bags and dry-heated in a germination room for 80 – 90 days at temperature between 37oC to 40oC. After this, the seeds are removed and soaked again for seven days, with daily change of water. The nuts are then returned to the polythene bags and kept in cool places. Water is sprinkled on the nuts and is examined about twice a week. Germination is achieved in about the third week.

LAND PREPARATION AND PLANTING OPERATION

These operations are;


  • Planting in the nursery
  • Planting in the field

Planting in the nursery: After germination, seedlings are first planted in a pre-nursery where they remain for about four and half months (41/2 months), before planting in nursery. Seedlings can however be raised more economically by the use of 400 – 500 guage black polythene bags measuring 30cm wide and 40cm deep, filled with fertile soil. Seedlings in nursery are allowed to grow for a further 6 – 12 months before they are transplanted into the field, usually at the beginning of rainy season which is around March. Seedlings in nursery are place at 45cm spacing, Asherio, 2002.


Planting in field: The bushes should be cleared, distance an d hole measured and marked out. This is called field demarcation and pegging. The holes arte then dug. Poly bag seedlings are best transplanted with all the soil (earth) in the bag intact. In situation where the seedlings are planted in nursery beds, it is best to lift them with a ball of earth which has been cut some 6cm around the plant to protect the root from damage and shock, and soil added and pressed down.
Note: When seedlings are to be transplanted to far distances, the ball of earth method may make them too bulky to carry. The naked root method can be used. By this method, the soil is shaken off the roots. To prevent dry-out however, the roots are then dipped in clay suny and tied with moist grasses or dried banana leaves. The planting distance is usually 9m triangular, giving about 150 palms per hectare. Field planting is best done from March to early May, C. I. Aghimien; 1999.
     Young palms should be protected from rodents, such as grass cutters by a collar of wire netting, which has to be removed when the palms have fully established.

CLIMATIC AND SOIL REQUIREMENT


Oil palm is mostly adapted to the regions between latitudes 15oN and 12oS. It requires a temperature range between 24oC to 34oC, with a constant sunshine for the development for the female flower. A rainfall range of 2, 000mm to 4, 000mm a year and well distributed is adequate for good production. Oil palm requires rich well drained soils with PH on acid side of neutrality (4.5 – 6), Ascherio A., (2002), Baily C. C., 2003.

 Fertilizer requirements and applications.  

In nursery, a mixture of N.P.K. Mg fertilizer in the ratio of 1:1:1:2, using ammonium sulphate, muriate of potash, single super phosphate and magnesium sulphate is applied twice at the rate 55g per seedling, when the seedlings are 2 and 8 months old. In field, yields will fall rapidly if the soil nutrient extracted by the plant as well as through the bunch are not replaced. Spread in broad bonds, for older palms.


Potassium is the most important and the most limiting nutrient for oil palm production, potassium is an important constituent of the bunch, Usoro (1974), the Nigerian Institute for Oil Palm Research (NIFOR), Uguru (2007). Excess potassium induces magnesium deficiency in the soil. Thus potassium should be controllably applied. Spread it in a ring form at 7.5cm away from the seedling to avoid scorching the seedlings.

Maintenance and weed control: Weed round each tree (ring weeding). Leguminous plants like pueraria and centrosema can be planted to suppress weed in the plantation. The use of herbicides proves very effective in oil palm plantation, Onuoghia; 2005.
          

Old and infected leaves should be pruned and burnt on routine basis. Fresh or green leaves should never be trimmed as the number of leaves on the palm tree has a direct relationship with the yield of the plant, he added.

HARVESTING OF OIL PALM:
         
Oil palm begins to mature and fruit as from 3 – 4 years after planting. According to Stephen and Osagie, 2007, oil palm fruits are harvested when they begin to ripe (that is, when the bunch begins to lose its fruits).
          

It is done by cutting down the bunch using cutlass, a chisel or a special harvesting knife (sickle attached to a long pole). For older palms, the bunch could be reached by using ladder or climbing ropes/wires. Highest harvest occurs early in the beginning of rainy season (March to April) while smaller harvest occur at the end of rainy season (September to October).


PROCESSING OF OIL PALM FRUITS


According to Onuohia (2005), the immediate processing of the oil palm fruits is very important as it leads to the production of good quality oil with reduced free fatty acid (FFA) content. This is because the oil palm fruit is very rich in latent enzymes, important among which is lipase. These enzymes are activated as soon as the bunch is harvested and they work rapidly on the pericarp triglycerides of the fruit, hydrolyzing the fatty acid from the glycerol. This leads to a rapid increase in the amount of free fatty acid (FFA) in the fruits. A high content of FFA leads to deterioration of the oil quality. This is why traditional method of processing gives low quality oil as well as very low percentage extraction achieved, Onuohia (2005).
The oil mills however, give the best result in terms of oil quality and percentage extraction, Onuohia (2005).
Nyanwu  et, al (2009) classified palm oil into three (3) types, this was based on the method s of extraction. It includes:
Hard oil      -   containing high free fatty acid (HFFA)
Soft oil                 -   containing low free fatty acid (LFFA)
Special oil   -   containing very low free fatty acid (VLFFA)



Methods of palm oil processing

i. Local (traditional) method
ii. Modern method


i. Local method: in small-scale palm oil production, the use of local (traditional) method is common to present farmers. Nigeria Institute for oil palm Research, (NIFOR), estimated that about 250 tons of palm oil is lost annually due to traditional processing method employed by majority oil palm producers, Oluwasanmi (2007). According to him, these procedures are as follows: Cut the bunch into pieces and cover with materials for some days to allow it loosen its fruits, then mesh to extract the fruit. The fruits are then boiled and pounded in a mortar, the fibre and nuts are removed and the oil is separated from the residue by floatation after mixing with water. The crude liquid is then re-boiled and oil carefully separated (skimmed). The oil is later reheated to remove any traces of water.


ii. Modern method: According to Uguru (2007), modern method (the oil mill method), involves different stages. 
These are:

- Sterilization: This helps to soften the fruits for stripping from the bunch, and for milling, to kill any disease pathogens and stops the action of the lipolytic enzymes which increases the FFA content.


- Stripping: this is the removal of the fruits from the Bunche; thereafter the fruits are heated or boiled for about 30 – 45 minutes.


- Milling (pounding): This involves pounding the fruits to separate the mesocarp from the nut. This is done by the use of horizontal digester or the macerator. It is called depulping


- Pressing: This is the pressing out of the liquid from the macerated mass. Pressing can be done using:


    - The screw hand press
    - Hydraulic press or,
    - The centrifugal press. The nuts are removed from the fibrous-mass while the liquid is sent to the next stage


- Clarification: This is the separation of the pure oil from the water and sludge (impurities). The process involves boiling and skimming. He added that clarification is more effective when hand or hydraulic press is used.


- Storage: Oil palm can be stored in drums, tins or plastic cans.
The extracted nuts are dried in the sun. The kernel, extracted by cracking the nuts (either manually or mechanically) are then dried and stored in bags or silos.

ECONOMIC IMPORTANCE AND USES OF OIL PALM PRODUCTS

Oil palm tree is so unique that virtually all the parts are useful. The trunk (stem) serves as a valuable source of timber, for use as pillars and beams, or can be sawed into planks and used for construction and building. According to Ajakaire, (1997), the leaves (fronds) are used for roofing and thatching, the fibre, used in rope and basket production. The leaflets are used in broom making for domestic purposes. The whole fronds, however is used for fencing and staking.

The palm oil with high FFA, referred to as industrial oil is used for making soap, candle, while those with low FFA are used for cooking, manufacture of margarine and vegetable oils. The palm kernel oil is used in making local pomade and palm kernel cake for feeding livestock,   Oluwasanmi,  ( 2007). The shells which result from cracking of the nuts are used in concrete making, as source of fuel, and to check or control erosion,   Onuohia, ( 2008).


The palm wine is a refreshing drink, rich in yeast and Vitamin B. Palm wine can be distilled to produce local gin.


The bunches, after removing the fruits can be burnt and used in making native soap, Oluwasanmi, (2007). They are good source of manure to the palms, being very rich in potassium content. The fibrous pulp inside the bunch is used in making foot mats. The fibrous residues obtained after pressing out the oil (mesocarp) are good source of fuel.
Generally, oil palm production had being a good source of food, income, industrial raw materials and employment to the jobless, Onuohia, (2005).



PROBLEMS AND PROSPECT OF OIL PALM PRODUCTION

          The following are the problems militating against oil palm production in Nigeria. These are:

1. Problem of finance: Majority of our local farmers are poor. Credits are not easily made available to them, aas well as some private sectors because they cannot provide the collateral security which commercial banks or credit institutions demand. There is also a problem of high interest rate which   rural farmers cannot cope with. Hence, they are discouraged, S. A. Omorayi, (1990).

2. Lack of interest and education: Many individual farmers and government sectors don’t seem to be keen in investing in long-term projects, like oil palm plantation and production. But in projects that attracts immediate financial benefits, such as trading on agricultural products. This is because of poor formal education and orientation.


3. Climatic problem: High yields are rarely achieved in practice. This is because erratic rainfall pattern, sunshine and temperature regime in central and West African regions (Nigeria). Oil Palm trees suffer water-related stresses.
Some times the effect of weather, such as thunder, and lightening could be an impediment to already existing palm tree, causing their premature death or delay in yield for years.


4. Pest and diseases: Prospective farmers (oil palm investors) are being discouraged because of pest and diseases prevalence in Nigeria. Diseases and pests cause reduction in productivity and yield of oil palm. Many palms show symptoms of collar rot diseases (NIFOR).
5. Land tenure system: Individual and commercial system of land acquisition had hampered oil palm production in Nigeria. As population increases, land fragmentation creeps in, such that land becomes unavailable.
6. Poor processing and storage facilities: and over dependence on petroleum (crude oil) are other factors militating against oil palm production.


POSSIBLE SOLUTIONS TO THE PROBLEMS OF OIL PALM PRODUCTION

          Formal   education   on the  needs  and importance of oil palm production should be conveyed to farmers. In this light, government should grant loans and credits to prospective oil palm investors and  subsidize the price of input (such as fertilizers, machines, herbicides, irrigation and drainage facilities). Government should engage in   Land use Act and Land use Decree, provide good and affordable processing and storage equipment's, as well as providing high strain and disease resistance varieties.


CONCLUSION  

          Having seen the economic importance and uses of oil palm, I wish to recommend that government should see oil palm production as a lucrative business, an investment forum that would alleviate the masses from poverty line to a higher standard of living.

          Private   investors however should be encouraged and assisted by the government to carry on oil palm production.


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  • NAME OF BUSINESS / COMPANY
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SECTION 2(Feasibility study section)

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  • CASH FLOW
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  • GENERAL ASSUMPTIONS (BREAK EVEN ANALYSIS)
  • BUSINESS RATIOS - PROFITABILITY ANALYSIS
  • CONCLUSION
  • SECTION 3 – APPENDIX

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Esemdiary village is a community in Okpe Local Government Area of Delta State with coordinates 05°26’N 5°57’E, which also plays the host community to the Warri Airport, which is actually located at Osubi. 

Okpe Local Government is a territory that used to be part of the original Okpe Kingdom, its headquarters is at Orerokpe, with a population of 128,398 people whose primary occupations include commercial farming, fishing, hunting, trading and gas exploration. 

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