How to Start Vegetable Oil Business in Nigeria

Here in this post, we are going to give you a step-by-step guide on how to start a vegetable oil business in Nigeria. This knowledge will be invaluable if you are considering starting this line of business, which is very lucrative.

Overview Vegetable Oil Business in Nigeria

When cooking, a vital ingredient used is the cooking oil, this can be found in every kitchen as it is unavoidable. Cooking oil may be gotten from animal (butter and lard) or plant (palm oil and olive oil) sources; however, we are encouraged to use oils gotten from plants (vegetable oil) as they are healthier.

Read Also: How To Start Palm Kernel Oil Business In Nigeria

How to Start Vegetable Oil Business in Nigeria
Vegetable Oil Business in Nigeria – Photo Source:

Asides cooking, the uses of vegetable oil vary from the kitchen to other areas, even in the kitchen; its uses are still not limited to cooking; prevent food from sticking on pots and pans, easily remove stickers and labels from jars, separate glasses that are stuck (as lubricants) and industrial needs, palm oil is a raw material for detergents, candles, etc.

Vegetable oils are of different types, gotten from a variety of plants, mostly from the seeds and a few times from the grains, nuts, and fruits.

Examples of some such plants include: palm, corn, soybean, sunflower, avocado, coconut etc. and the vegetable oil is a blend of two or more of these plants.

The business of vegetable oil is one that involves the extraction of oil plants. Like other businesses, this can be run on medium scale or large scale depending on your choice. This article is going to serve as a guide for anyone interested in going into vegetable oil business.

Read Also: 12 Health Benefits Of Coconut Oil


Over the years, the consumption of vegetable oil has greatly increased. As the demand of oil is really high and the population keeps increasing (with over 150 million people), this is a very profitable business to explore especially with the senate urging the Federal Government to ban Vegetable oil from being imported into the country.

A 20 liter gallon of palm oil goes for about five thousand naira and you can store the palm fruits for production all year round. To start small, the starting capital is relatively low.

Notable key players in Vegetable oil business

There are a lot of Nigerians involved in this business; an example is Alhaji Munir Muhammad Sagagi who is the owner of Amshak Oil Mills Company

Target market and opportunities for vegetable oil business

The market segment for this business of vegetable oil is a large one as its uses are vast.

Fast food outlets,

Shops and supermarkets,

Hotels and restaurants,


Bakeries, etc.

The above are the target markets for the business, and possibly, everyone is a target (old and young).

How to start vegetable oil business

There are different varieties of vegetable oil, but for this article, the focus will be on palm oil which is the most consumed vegetable oil around the world. You’ll find below, the vital information you will need to start the business.

Read Also: 9 Ways To Join Oil and Gas Business in Nigeria with minimal capital

Knowledge/Experience needed

There are quite a lot of things to know before starting your vegetable oil business. You need to gain the right amount of knowledge as you cannot just be in a hurry to start.

For the palm oil business, it is good you have knowledge of palm fruits so as to know the ones that yield richly. There are local ways of extracting the oil and this is cheaper because it involves low technology, but my focus will be on the cheaper one, especially as it is for start ups.

One should be familiar with the few types of machinery involved, not necessarily the complex technicalities but the basic operation mode and to know capable maintenance personnel.

Raw materials needed

The main raw material for this business is the palm fruits (gotten in bunches) that can be grown or bought locally. This is where you apply your knowledge as you will be at an advantage when you buy good seeds, your extraction is good (oil of high content).

Water is needed all through the process and especially for boiling the palm fruits.

Fire wood- these are used for lighting up the fire for the boiling process.

Equipment and tools

Storage containers- these are large containers for storing the processed oil.

Basket- this is for separating the nuts from the fibers.

Cooking pot- this is for the boiling process.

Buckets, water hose, mortar and pestle.

Palm oil processing machine

Read Also: How to Start Vegetable Farming in Nigeria


In order to succeed in this business, choice of location matters a lot as it is wise to choose a place that is easily accessible so that your customers won’t have issues locating you and you won’t have difficulties moving your machines.

Some other things to consider are: cost of transporting items there, availability of electricity and closeness to sources of raw materials.

Funding needed

Funding is based on how you want it, whether it is on a large or medium scale. You can start small, if access to funds are limited not forgetting the available Government grants which can be accessed through certain commercial banks, also you can get loans from cooperative societies or microfinance banks.

If funds are not sufficient for the purchase of the machine, it can be rented and if you have already bought that, you can rent yours out.

Business name (Registration, documentation and licensing)

After picking a name for your business, you should enroll it with the Corporate Affairs Commission.

Packaging and distribution/Promotion tips

This is a vital part of the business as consumers are attracted to quality and fine packages. Vegetable oils are usually packaged in plastic bottles, gallons or bottles with attached labels.

As per the distribution and promotion aspect, it is important to have the contact of one’s customers for easy distribution.

Also, location comes to play here as a good location will enable your buyers locate you. For a starter, you can start with a few samples and know how well it is accepted and customer reviews.

Company structure and staffing

As your business picks up, you will need capable hands for your business. For business on a large scale, a high skilled labor is needed.

Read Also: 8 Varieties and Types of Tomatoes Grown In Nigeria


The demand for palm oil (Vegetable oil) is high as the population rises, and this has provided a great opportunity for a lucrative business like the vegetable oil business provided you put in the right amount of dedication and commitment, service machineries regularly and make your business easily accessible.

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Ama Idim

Ama Idim is a Content Developer at InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Ibanga. Page maintained by Ifiokobong Ibanga. If you need a personal assistance on this topic, kindly contact us.

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