Production & Manufacturing

7 Steps to Produce Vegetable Oil in Nigeria

Here in this post, we are going to show you steps to produce vegetable oil in Nigeria. We hope you find this article educating and informative.

The current production of Vegetable oil, cannot meet the ever-increasing public demand. This is why the country needs Entrepreneurs like yourself, to help guide us to more robust production of vegetable oil in the country.

As you may or may not know, Nigeria used to be one of the largest producers of this commodity, and experts believe this is the right time to return us to glory days. This article, will help guide you on how to start a vegetable oil business in Nigeria.

Read Also: Steps to Produce Vegetable Oil in Nigeria

7 Steps to Produce Vegetable Oil in Nigeria
Steps to Produce Vegetable Oil in Nigeria – Photo Source: http://www.uacnplc.com

Overview of the Business

Vegetable oil business is a diversified one. The cake gotten as a by-product from processing vegetable oil from soya-beans is mainly used for domestic animals, especially for steers, sheep and poultry.

Recently, a ban was issued on the importation of vegetable oil by the federal government. This was done in order to encourage the local production and marketing of vegetable oil in the country. The government has given a push, and it is left for people like you, to start the car and move on to the next level.

Read Also: How to Start Vegetable Oil Business in Nigeria

Profitability/Opportunities

Vegetable oil has been a very profitable business right from time. The reason why people are so scared of it, is probably due to the high cost of set up.

However, I am glad to inform you that even though a vegetable oil business is expensive to set up, your profits in one year can be times twenty of what you initially spent.

Let us run the calculations to confirm, and be on the safer side.

A ton of fresh groundnut seeds can produce= 503 liters of fresh vegetable oil, 40kg groundnut cake and 39 kg groundnut slop.

A ton of vegetable oil costs= 200,000 naira.

Now assuming you want to set up a vegetable oil mill that would be processing 3 tons of vegetable oil a day. My research shows that you can be amassing about 500,000 naira a day.

Now it costs about 2,000,000 to set up a working mill, but in 1 year you can be making about 168,000,000 naira in net income.

However, with the recent ban on importation of Vegetable oil, expect those numbers to increase because you now enjoy monopoly.

Read Also: 12 Health Benefits Of Coconut Oil

Here are the Steps to Produce Vegetable Oil in Nigeria

1. Acquire Capital

Like I said earlier, It is quite expensive to set up a vegetable oil mill. However, it is not impossible if not I wouldn’t bother writing this article. There are a couple of ways you can raise a good 3,000,000 naira to help you start up your own vegetable oil business.

Firstly, getting a loan from the bank is a good option once you understand the risk involved, and know what you are doing. If you manage all things properly, you should be able to pay the bank back even before the deadline reaches.

Investors are everywhere, looking for the right channel to put their money. They know it is wise to invest and save, and they are looking for someone who would take their money with guarantee of future returns. Draw up a worthy business plan, approach them and present your mater piece strategy to them.

Friends and family should be your first run to, if you have any.

2. Get a Good Business Plan

If you took a loan from the bank, collected an agreed sum from an investor, or borrowed money from a friend, then you have to at least know what you are doing.

You need a good business plan to be able to run a business like vegetable oil mills. Write and print out a good business plan, including how you plan on raising enough money to pay the investors, friends or the bank.

3. Get a Location

This is the third most important thing, you need a spacious indoor location, preferably a former warehouse or something like that.

However, I will advise you get a location closest to your market, this will guarantee that you meet customers’ demands promptly and reduce the cost of transportation effectively.

Explain to your property agent, or landlord the kind of space you want, and facilities you expect the location to have. Basic amenities like water, and reliable power supply should be your first demands.

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

4. Purchase Equipment

Now that you must have decided or found a location, it’s time to purchase the machines for your vegetable oil business. The following are some of the equipment and machines you would need to purchase and the process of oil extraction.

This is the standard production process of vegetable oil, so study it and purchase the equipment highlighted in the image, as well as required raw materials e.g. Groundnut seeds.

5. Hire Workers

Now that you must have successfully purchased the required equipment, it is time to hire some extra hands. Honestly, the production of vegetable oil is not an easy task, and definitely not a one man’s job. However, make sure you hire workers with previous experience in vegetable oil extraction.

Ensure that they are responsible and hardworking by conducting job interviews, where you will evaluate their characters and responsibility.  Lazy workers will produce lazy figures at the end of the day, causing your business to remain stagnant.

6. Market Your Product

Many blogs will tell you to market your products after testing the markets, and say a big no to that strategy. You must get word out, before you even begin to make anything at your mill.

You can do this through massive campaigning on social media platforms, distribution of flyers, banners and if possible radio adverts.

Make sure that your brand name, song and color sticks in the heads of the public, due to incessant advertisements. This way, you can be sure that your business will attract an encouraging number of buyers on your first market test.

7. Test the Market

Now that you have conducted a massive campaign for your product, it is time to test the market with your product. Set a release date and produce about 120 gallons of oil, take them into the market and try to sell them to retailers.

Now, because this market women and men have been seeing flyers and hearing radio advertisements, they would be keen to know what you actually have to offer.

If you were able to sell off all your products on the first market test, congratulations your business is on the road to success.

Read Also: How to Start Vegetable Farming in Nigeria

Conclusion

A good and healthy oil is always appreciated in the market. Once your product has good quality, it becomes the new favorite in the market.

So find a way to make the odds work in your favor, try to provide good quality oil at an affordable price to compete in the market.

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Emmanuel Chibuike

Chibuike Emmanuel is a Content Developer at InfoGuideNIgeria.com. 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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