FEASIBILITY REPORT FOR ESTABLISHING A SMALL SCALE OIL PALM MILL IN ITU LOCAL GOVERNMENT AREA, AKWA IBOM STATE, NIGERIA
By Uwem Essia
This feasibility report makes a case for the establishment of small scale oil palm processing oil (the Mill) in Akwa Ibom State along Calabar-Itu road, and in-between Mbak Atai and the Head Bridge. The Mill will use palm fruits and palm kernel nuts to produce crude palm oil (CPO), palm kernel oil (PKO), and palm kernel cake (PKC). The case for feasibility of the Mill is founded on the following findings:
- Excellent Demand Prospects for CPO, PKO, and PKC; there is supply shortage for these products, and domestic demand is currently augmented by imports.
- Availability of inputs; oil palm produce are generally available, the technology for fabricating oil palm processing mills are available locally, labour is generally cheap, and locating the Mill in the area identified will ease access to raw materials.
- Oil palm milling open opportunities to establishing plantations, and producing further refined produce in the near future.
- Profitability analyses indicate a payback period of three years. Given a venture capital of N65,070,000 to be committed to establishing the Mill in the first year, the net cash flow from the third to the seventh year of operation are N3,459,000, N22,857,000, N46,755,000, N70,653,000, and N94,551,000 respectively.
- Environmental impact assessment indicated very minimal negative impact of the factories operation as all solid wastes generated from oil palm milling are recyclable. The positive impact of the Mill on the immediate operational environment and the economy include high quality finished products, job creation, poverty alleviation, and development of the oil palm processing technology.
The following key operational requirements were indentified for success and sustainability of the Mill:
- Satisfying the registration/certification requirements of NAFDAC and SON, and obtaining relevant permits and approvals of various Federal and State (MDAs) and the Local Government Council.
- Achieving value-for-money in procurement of oil palm fruits and palm kernel nuts, and effective liaison with PHCN to optimize the utilization of public power supply for milling.
- Ability to adjust hours of production to march availability of public power supply will be enhanced if the workers are quartered within or close to the Mill. Equally a working meal for the staff will promote their effectiveness and render them more responsive to flexible working hours.
- An effective and proactive maintenance/fabrication unit is necessary for reducing downtimes, continuing process innovation, and extending the machinery capacity to meet growing demand. A service contract with the machine suppliers during the first year of operation is recommended to enhance capacity building for staff of the unit.