PALM KERNEL NUTS CRACKING BUSINESS

In my last write-up on palm kernel nuts, we looked at it from the buying and selling angle but these time, I am going to look at it from the production side, that’s is, buying and producing palm kernel {unshelled} into palm kernel nut by the use of a cracking machine. It is important at this point to note that in the production of palm kernel nuts, we have the hand and machine cracked. The hand cracked palm kernel nuts are those gotten by the use of hand while the machine cracked is that gotten from the use of machine in the cracking process.

Though buyers usually prefer the hand cracked because the FFA {Free Fatty Acid} content is usually low due to less breakage of the nuts but can not depend only on it due to less output. Machine cracked with the advantage of more output gives high FFA content which can be controlled by reducing the breakage of nuts. The machine in question has an efficiency of 90%,that is ,if 100 KG of palm kernel{unshelled} is feed into the machine,90% of the palm kernel nut would not be broken.

TECHNICAL ANALYSIS OF THE PROJECT:

The machine available for the production of palm kernel nuts is in two types, the ones that can crack and separate the nuts from the shell and the other that does not separate the nuts from the cracked shell .

The machine can be sourced from abroad or locally but the one in question is sourced locally and use a diesel powered engine to address the problem of electricity. The plant has a capacity of one {1} ton per hour and an efficiency of 90%. The plant would occupy a land area of about 15 * 10 feets but for production convenience, storage of raw material and finished products, the project should be accommodated in a land area of about 200 * 100 feets,that is ,two {2} plots of land. The raw material required to run the plant is palm kernel {unshelled} and labour required is between 2-4 persons.

MARKET ANALYSIS OF THE PROJECT:

Like was stated in my previous write-up, the market for palm kernel nuts is large, expanding and sustainable due to the products derivable from the product.

The investor might find it difficult to meet the needs of one buyer but would need different buyers in order to compare prices and increase competition amongst the buyers. The unshelled palm kernel can be sourced from the mainly the rainforest zone states of Nigeria to include Oyo,Anambra,Enugu,Abia,Imo,Ekiti,Osun,Cross River,Akwa Ibom etc.


FINANCIAL ANALYSIS OF THE PROJECT:

For the automatic plant that separates the nuts from the cracked shell the price is about N950, 000 while the other that does not separate the nuts from the shell is about N300, 000.

A small scale investor can invest in the plant that does not separates the nuts from the shell and make money going by the fact the two machines have the same capacity.

Since the efficiency of the machine is 90%, below would be the cost and profit analysis of operating a ton.

Cost of one {1} ton of palm kernel {unshelled} = N30, 000

Transportation to crushing site = N1000

Cost of packaging = N1300

Cost of labour =N1000

Cost of fuel = N1000

Miscellaneous =N2000

Total = N36, 300


If the investor was able to secure the supply at N60, 000, below is the profit

Since 1 ton = 1000 KG and the machine has an efficiency of 90% then
90% efficiency = 900 KG

Profit = 0.9 * 60,000
= N54, 000

Profit = N54, 000 – N36, 000
= N17, 700

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Report Title: CRACKING AND PROCESSING OF PALM KERNEL NUTS
IN NIGERIA
Product Code: FOR A/08/2011/09

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