GENERAL CONSIDERATION
This feasibility report makes a case for the establishment of small scale oil palm processing oil (the Mill) in Edo State along Benin Ekpoma Road. The Millwill 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
1.Excellent Demand Prospects for CPO, PKO, and PKC; there is supply shortage for these products, and domestic demand is currently augmented by imports.
2.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.
3.Oil palm milling open opportunities to establishing plantations, and producing further refined produce in the near future.
4.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.
5.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.
CAPITAL INVESTMENT
Information was elicited through interviews and physical using descriptive statistics (mode, frequencies and corresponding percentages and gross margin model). Profitability analysis indicate a payback period of 3 years, given a venture capital of N65,000,000 to be committed ot establishing the mill in the just year.Financial proposal
The crude input-output margin of the kernel oil processing unit is summarized in table A below. The kernel oil mill has an installed capacity of 500kg kernel/hr, which amounts to 5000kg per 10hours working day.
As for the palm oil milling, an average milling rate of 2500kg/day (and 750, 000kg/year) is assumed kernel is currently valued at N62 per kg which amounts to about N160,000 worth of kernel milled per working day and N41.29 million worth of kernel milled per year.
Financial and Economic Analysis
The financial and economic analysis is summarized in table A below:
The daily output rates for PKO and PKC are 1,000 liters and 1,500kg respectively. This is based on the assumed ratio of 40 percent PKO and 60 percent PKC. PKC is currently sold for N225 per liter and PKC N25 per kg. The value of daily outputs of PKO and PKC are about N230,000 and N38,000 respectively. The yearly value of outputs of PKO and PKC are N67.5million and N11.25million respectively. Thus, palm kernel procured for N41.29million in a year yields N78.75million worth of PKO and PKC
