INTRODUCTION


Good morning Sirs and Mas


Have been following this agric section for some years and have seen so many posts that could misguide intending farmers. I always felt guilty for not responding or correcting the information but due to my tight schedule and the fact that I need to be a registered member before i comment also did not help.


But after series of thoughts, have decided to be a registered member and open a new thread to avoid insult in the course of trying to correct most of the wrong information displayed by some of the posters which their intent is to exploit the intending farmers.


Have also decided to break it down the costs and returns analysis of some tree crops like Oil palm, Cashew, Cocoa, Citrus, Kolanut etc (may God give me the time)


But this particular thread will be dedicated to OIL PALM farming. I will also try to open a new thread for the rest of the crops i mentioned earlier very soon.


I want it to be an interactive one and let's try to avoid insult that can derail the thread. I'm sure the information I intend to disseminate with your contributions will go a long way in helping a lot of Nigerians that will be viewing this post.


I'm an Agric. Consultant and Agricultural Economist by profession with a Master in Agricultural marketing. Presently a staff of Ogun State Ministry of Agriculture.

You can contact me on 08123916545 for any professional advise on any of cash crops have mentioned earlier.

You are all welcome.

I am really Happy people like you have come out to educate us
I'm also planning on going into oil palm farming, I'm hoping this thread will be of great help.
Thanks and God bless

@ Maximilano, thanks and May God bless u Sir

WHAT U NEED TO KNOW

Please I will quickly like to highlight some facts here base on practical experience and farming in Nigeria. Please don't listen to people that will use Malaysia analysis for you....it won't work!

This is not to discourage you but rather to prepare you for the challenge ahead because farming is not as easy as they do tell you but it needs serious commitment like you do to other business.

- Oil palm is a lucrative and profitable business...... Infact its an asset

- Farming one hectare of oil palm is not economically advisable

- A minimum of 10 hectares is ideal but more will be preferable.

- If you are a first timer don't border yourself to raise the seedlings in the nursery ....to avoid unnecessary headache

- Marketing of oil palm products...... is very easy due to high demand

- Don't let them deceive you......... Tenera is still the hybrid they sell in Nigeria

- As at now, you cant do a meaningfull harvest..... until the 4th year

- If u don't have or ready to spend up to a minimum of a million naira and above to cover the 4years expenses ......... don't go into oil palm farming

- Oil palm farming without interplanting with other crops is not economical.

- Don't go and borrow in bank (over 25% interest rate annually) to start oil palm farming ...you won't like yourself

- During harvest and processing ...you must always be on ground to avoid pilfery.

- You can never see 7,200 litres nor 7,200 tonnes of quality palm oil on an hectare in Nigeria.... Even when the tree is at the peak of production

- 7m by 7m will reduce your yield...don't doubt it

- Planting above 150 seedlings on an hectare....u will regret it

- Going into oil palm farming without a plan to process it ...is a waste of time.

- Profit after 25 years of harvest is not feasible.... diminishing return would have set in.

- Getting an oil palm seedling @ #150 is not feasible...budget more than that

OIL PALM FARMING FINANCIAL ANALYSIS
The financial analysis of the oil palm plantation is necessary to analyze the pay-back period profitability and efficiency of the oilpalm plantation and also know if the project warrants a monetary investment.

COSTS : are expected amount needed to establish the oilpalm plantation, maintain it and process the oilpalm fruits into a desired products such as palm oil and palm kernel oil

RETURNS: refers to the projected amount you should expect to generate annually throughout the economic life of the oilpalm plantation.


PAY BACK PERIOD ANALYSIS: is important to know the number of years required for the oil palm project to produce cash flows equal to the original investment cost.

PROFITABILITY ANALYSIS: This analysis will help us to know the oilpam plantation's ability to generate enough returns based on its relative level of resources and also to know if the oilpalm project is worthwhile or worth investing on...remember a project can have profit but yet not profitable.

EFFICIENCY ANALYSIS: This is also important to measure how well we can utilize our investment capital or assets to generate returns. Efficiency also analysis goes hand in hand with profitability analysis. Most often when farms are efficient with their resources, it will definitely become profitable.

PRESENT VALUE ANALYSIS: This is also vital to know the actual outcome of our choice to invest in oilpalm plantation taking into consideration the interest rate, inflation rate and other time factors.

It is after all this analysis is carried out we can now be confident to say the project will give us profit, viable, profitable and efficient.

I will like you to suggest an acres or hectarage of land you will like me to base the costs and returns analysis on.

Remember its not all about me alone but about us.

Waiting for your response.

skilldammy2:

COSTS, RETURNS AND PROFITABILITY

COSTS : refers to the expected amount you will spend on the farm right from land preparation till the 4th year you will start having meaningful harvest, including the expected cost of processing.


RETURNS: refers to the expected yield in quantity and amount throughout the productive years of the oil palm tree

PROFITABILITY: this does not mean profit but refers to various indices (BCR, IER, PM, MM, NPV, ROI, IRR) to determine if a project is worthwhile or worth investing on...remember a project can have profit but yet not profitable.

I will like you to suggest an acres or hectarage of land you will like me to base the costs, returns and profitability on.

Remember its not all about me alone but about us.

Waiting for your response.

Please, help discuss the ones for about 10 acres

Will really appreciate 10 hectares Sir.

pls lets have 10 or 20 hectares costs and returns

Following...

Base on the comments so far, seems you prefer 10 hectares and this will be used for analysis.

Sit back, relax and enjoy the cost analysis for 10 hectares of Oil palm farming

OILPALM PLANTATION COSTS

Like have posted earlier, these are costs that will be needed to establish the plantation, maintain it and process our oil palm fruits.

NOTE: All costs are average costs, there may be a little increase or decrease in the price depending on so many factors.

The oilpalm establishment costs will be divided into Land preparation costs and planting costs

LAND PREPARATION COSTS

The land preparation involve various operations needed to prepare the land before the planting operation will commence and this include;
Land clearing,
Felling,
Cutting,
Removal of trees,
Opening of path,
Fire tracing,
Ploughing,
Harrowing and
Perimeter survey

This will cost you a minimum of #1,200,000

Note: this is subjected to your bargaining power but if the land is a ploughable land then the cost will definitely reduce but for the analysis we assumed its a land with trees (virgin land).

Thanks for the information. We are listening.

Hello,
This is rather informative and interesting....

I am interested in establishing a palm oil processing plant. Kindly assist with all it will take for me to establish one. Cost of equipment and nitty gritty of the business

God bless you op, Our company have interest in palm oil mill and we are really considering a backward integrative strategy where we will be our own supplier of raw materials. ..Following with keen interest!

ogene70:
God bless you op, Our company have interest in palm oil mill and we are really considering a backward integrative strategy where we will be our own supplier of raw materials. ..Following with keen interest!

@Ogene70, How is the business going? Like I stated I am interested in establishing a palm oil mill, please can you advise me on the cost of setting one, where to source equipment and general information about the business.

farmingnewbie:


@Ogene70, How is the business going? Like I stated I am interested in establishing a palm oil mill, please can you advise me on the cost of setting one, where to source equipment and general information about the business.

Business is doing well.
We are still working on all that ,will share once we are done.
Have a nice day.

Hello ogene70,

Please I need your assistance on how to get a land to start a oil palm plantation. .....say 30hectres. Due to the volume involved, we're considering where hectare isn't more than 50k.
Will really appreciate it if you can help out. Give me your details for further contact .

Regards.

Chairman how much for everything, total less land

@ acason: thanks for your attention Sir.

@ rex0105: thank u Sir

@ farmingnewbie: I will not want to give you inaccurate data bcoz there are some question I need to ask you before I can give u any estimate but nevertheless, all u need for the oil palm processing is
1. SSPE (NIFOR MINI)
2. STORAGE TANK
3. DIESEL ENGINE
4. PROCESSING SHED
5. WORKERS
In order not to divert the thread we will talk better on it when we get to the processing stage

@ Ogene70: you are highly welcome......I will be happy if my posts will be of help Sir

rex0105(m): if you wish to establish it in Ogun state let me know... if I can connect u with those who can assist.

mikolo80: please kindly be patient Sir....


@ All, I'm sorry for the late response....that was why I took apology from the beginning...its my schedule pls.

skilldammy2:
@ acason: thanks for your attention Sir.

@ rex0105: thank u Sir

@ farmingnewbie: I will not want to give you inaccurate data bcoz there are some question I need to ask you before I can give u any estimate but nevertheless, all u need for the oil palm processing is
1. SSPE (NIFOR MINI)
2. STORAGE TANK
3. DIESEL ENGINE
4. PROCESSING SHED
5. WORKERS
In order not to divert the thread we will talk better on it when we get to the processing stage

@ Ogene70: you are highly welcome......I will be happy if my posts will be of help Sir

rex0105(m): if you wish to establish it in Ogun state let me know... if I can connect u with those who can assist.

mikolo80: please kindly be patient Sir....


@ All, I'm sorry for the late response....that was why I took apology from the beginning...its my schedule pls.

no wahala

skilldammy2:
@ acason: thanks for your attention Sir.

@ rex0105: thank u Sir

@ farmingnewbie: I will not want to give you inaccurate data bcoz there are some question I need to ask you before I can give u any estimate but nevertheless, all u need for the oil palm processing is
1. SSPE (NIFOR MINI)
2. STORAGE TANK
3. DIESEL ENGINE
4. PROCESSING SHED
5. WORKERS
In order not to divert the thread we will talk better on it when we get to the processing stage

@ Ogene70: you are highly welcome......I will be happy if my posts will be of help Sir

rex0105(m): if you wish to establish it in Ogun state let me know... if I can connect u with those who can assist.

mikolo80: please kindly be patient Sir....


@ All, I'm sorry for the late response....that was why I took apology from the beginning...its my schedule pls.

I am seriously following your inspiring trend with keen interest. Please can i contact you on the phone. thanks

nice thread op. keep it up!

pls i need the prices and machines that will be need for a palm oil.i have goten over a thousand ripe palm trees.i ve read a lot of write up that it process ur own oil to get more gain. pls i need quick response/

@ Megaik, Yes you can...my mobile contact is 08123916545

@ Lolly2, I will need to know the quantity of oilpalm fruits you want to process so I can recommend the most appropriate machine for you.
They all have different capacities but irrespective of the capacities. You will need;
- processing shed
- diesel generator
- oilpalm sterilizers,
- oil palm fruit screen,
- oilpalm digester
- oilpalm pressing machine,
- palm oil clarifier
- storage thank

We have different fabrication of all these machines by different manufactures but their capacities and durability are different.

The complete package of this machines range from 500,000 to 3,000,000

you can as well contact me to get a Comprehensive Business plan on Palm Oil and Palm Kernel Oil Processing in Nigeria



Back to the main discussion. To save time I will like to jump various operations needed for the oilpalm plantation since our focus is on the costs an returns analysis

You will need a total amount of 1,200,000 to cover both the planting materials and labour cost for the 10 Hectares

A total amount of 1,100,0000 will be needed to maintain the oilpalm plantation yearly until the 5th year when the leaves will have form enough canopy to reduce the weed growth.

Approximately 850,000 will be needed after the fourth year to maintain the farm


The harvesting cost for the 10 Hectares varies since the oil palm production also varies till the tree will reach full maturity but it range from 15,000 @ first oilpalm fruiting in the 3rd year to as much as 100,000 at maturity. This be properly properly highlighted in a table.

Since our target is just to process palm oil alone...Our oilpalm processing cost also varies annually since our yield is expected to varies. The oilpalm processing costs covers all the materials and manpower needed to process the oilpalm. It ranges from 240,000 in the 3rd year to about 1,600,000 at oilpalm maturity year. This is can also be properly highlighted in a table.

The total capital investment needed for the 10hectares of oilpalm plantation and processing equipments will cost us 2,500,000. The list of equipments, quantity, costs, and depreciation costs will be more proper to be highlighted on a table.

To cut the whole story short......it will costs us a minimum of 3.5million naira in the first year, 2.2million naira in the second year and 2.4million naira in the third year i.e a total amount of 8.1million naira for the 3 years before the project returns can now be sufficient to maintain and process the yield from the farm.

If you have any observation, addition or subtraction to the cost analysis. You are all welcome

Next will be on the RETURN ANALYSIS from the 10 hectares oilpalm plantation. coming soon!!!

Hmmm! Getting really blessed by this! Can't wait for the other analysis.

skilldammy2:
Next will be on the RETURN ANALYSIS from the 10 hectares oilpalm plantation. coming soon!!!

Are you on whatsapp?

thanks for the other day @op I really appreciate.

Hi, we patiently await your returns analysis

I am awaiting your returns analysis. Thanks Sir

where are you sir?we are waiting for you sir.

@ Skilldammy please where at thou? We need you to finish the good work your started