Palm kernel oil extracting business can be carried out on a large scale, medium , small and micro scale. At every level or scale of operation, the business is lucrative and profitable. It is not in doubt that the process of converting the raw materials which is palm kernel nuts (PKN) into the finished products which are palm kernel oil (PKO), palm kernel cake(PKC), and palm kernel sludge(PKSL); is a process of value addition. This value creation is a premium on the raw material. That raw material has increased in value. This added premium and value creation is the reward which the investor or the entrepreneur must claim as his profits.
That an investor or an entrepreneur has failed to succeed in the business does not make it unprofitable or not lucrative. Most of the time it is the short comings of the investor or the entrepreneur that is the cause and to be blamed for the failure. Many jump into the business without adequate preparation and as in every business and this will lead to failure. Some others lack experience and knowledge of the industry. Others fail to invest in quality machines or they choose to patronize inexperienced and cheap professionals and consultants. Many buy poorly built machines and equipment offered to them at a very cheap rate and when they fail, they will turn around and blame it on the industry by saying that the business in not profitable. We are here to correct all these abnormalities because the industry is actually a gold mine waiting to be tapped.Let us look at scales and levels of operations. There is the very large scale where the extraction process involves the use of a chemical solvent to dissolve the palm kernel nuts and by a distillation process, the PKO is extracted leaving a powdery PKC with almost no oil content ( less than 3%). This process is called solvent extraction method where a chemical called Hexane is used to dissolve the raw materials. This method is most efficient in terms of achieving the highest rate of extraction of the PKO from the PKN. However, it is very expensive to set up and could run into hundreds of millions of Naira. Maur Ban Lee, a company from Malaysia, which we have a link with, is in the forefront of oil palm related industry and almost the best in the world. The company builds one of the most modern solvent extraction plants. Investors and entrepreneurs who are interested should contact us for professional advice.
Then there is another fairly large scale or level of operation. This one is a mechanical process where a machine called Expeller is used to extract the PKO and PKC. In this mechanical process, the palm kernel nuts are fed into the expeller through its hopper and a large shaft, ringed with iron worms would propel the nuts through an iron cage lined with iron bars and knives and in the process the kernel nuts are crushed and the PKO squeezed out while the PKC is forced out from the front end of the expeller. Malaysian expellers are the world’s best. In short about 95% of successful Nigerian factories using foreign machine make use of these Malaysian machines as a result their spare parts are easily available and the technician that maintain them are also easily available. Note that it is not just every Malaysian machine but those made by Muar Ban Lee and its cousin company Khung Heng. We have links with these companies and interested investors and entrepreneurs can contact us for professional advice. Granted that you maintain the average extraction rate of a minimum of 40% ( we say minimum because in some cases one could extract up to 45% depending on the quality of kernel nuts and expelling efficiency of the machine): your yield would be one ton of palm kernel oil (PKO) 1.25 tons of palm kernel cake (PKC) and about 0.35 tons of palm kernel sludge (PKSL) all these from 2.5 tons of raw materials, palm kernel nuts (PKN) you processed. This is standard practice. Anything less is not efficient operation and should be investigated and the problem solved.
One ton of PKO is 5 drums. Each of these drums is the 200 liters capacity. So one ton of PKO is 1000 liters..
Good morning folks. As we mentioned earlier, there are levels and scales of operation starting from the multi million solvent extraction plant to brand new multiple heavy duty Malaysian (Muar Ban Lee or Khun Heng) machines to a pair (i.e two) of these Malaysian machines to fairly- used – ones of these Malaysian machines. All these levels and scales have different levels and scales of start up capital involvements. These could range from say twenty million to several hundreds of million. Investors and entrepreneurs should seek professional and expert advice depending on their budget and what they want. However, it is very important to note that any foreign expeller outside these two mentioned Malaysian machines is not advisable as the investor could run into problems and get his fingers burnt. Example, there was the case of this my friend who thought he knew it all and after browsing the internet contracted one Chinese company and sank $50,000 into a deal for this Chinese company to supply and install a palm kernel oil extracting factory somewhere in Osun state. This my friend is now regretting and asking us to help him source two fairly used Muar Ban Lee as those Chinese expellers are not performing well and no technicians within the country to maintain them. Ultimately he will scrap them and install Malaysian machines; at least fairly used Muar Ban Lee or Khung Heng.
Another level and scale of operation involves the use of locally assembled machines and equipment. Over the years Nigerians have researched and developed very effective and efficient palm kernel oil extracting machines and equipment that could be set up with less than one tenth of the cost of these Malaysian machines. Some of these Nigerian machines perform better than the so called foreign machines. You must note that we said some of these Nigerian machines. This is because a lot of charlatans and roadside welders claim they can build these machines and they end up putting some unsuspecting and not very careful investors into problems. Again at times, I blame some of these investors because they easily fall for the antics of these charlatan and roadside welders which is ‘cheap price’. Since there are no standards organization (SON) or (NAFDAC) to put a stamp of quality on these contraptions called locally made machines, the unsuspecting investor is wholly at the mercy of the unscrupulous roadside welder. We must advise that investors make use of consultants and professionals before making investment decisions so that they do not fall prey. Good Nigerian made machines are very effective and efficient. Professional and experienced fabricators always also offer their consultancy services and by so doing they will ensure that investors would not have any problems with their machines and equipment. They will also ensure that the investor succeeds in the venture provided the investor is not mismanaging the business.
Let us assume to crush 10 metric tonnes palm kernel nuts per day,
And let use Prices at Enugu, our base, which we 100% sure of as at 30th day of January 2018,
Palm Kernel Nuts (PKN) = N125,000 per tonne
Palm Kernel Oil (PKO) = N350,000 per tonne
Palm kernel Cake (PKC)= N42,000 per tonne
Palm kernel Sludge(PKSl)=N80,000 per tonne
At normal yield of 40%
When you input 2.5 tons of PKN (kernel nuts) into our expeller you will get one ton of oil (PKO), 1.25 tons Cake (PKC) and about 0.35 tons of Sludge (PKSL)
10 tonnes of PKN costing 125,000 x 10= 1,250,000 would yield thus;
4 tonnes of PKO =350,000 x 4 = 1,400,000
5 tonnes of PKC=42,000 x 5 = 210,000
1.4 tonnes of PKSL=80,000 x 1.4 = 112,000
Total Sales Revenue = N1,722,000
Gross Margin 1,722,000 less 1,250,000 = N472,000 per day
To be conservative assume 50% charge as operation and other expenses
472,000 divide by 2 = N236,000
In six working days 236,000 x 6 =N1,416,000
In four weeks 1,416,000 x 4 = N5,664,000
All things being equal and you work consistently daily without break and you manage well, you could take home a net profit of N5,664, 000 per month
NOTE:The factory can be operated on 24 hrs bases using electric generating plant that uses converted condesate or (black-oil) fuel which costs less instead of 180 naira per litre of pure diesel using the system called ‘decarbonizing plant system’ thereby cutting costs by half and increasing profits. We can supply the client with the technology.
Again our new design expeller can be operated with a diesel engine instead of electric motor or fitted with a combination of electric motor and diesel engine at a slightly extra cost. We can also attach an electric Alternator to the expeller diesel engine and from there tap electricity to power both the filter press and the toaster. In this way you operate your factory without NEPA electricity thereby operating all round the clock.
Also for investors with enough capital fund in their budget, we can set up a factory with Malaysian expellers. However our expellers are affordable and we can guarantee an excellent performance.
We are a firm engineers and business consultants with more than 20 years experience in the industry. We can prepare a customized and bankable business plan for interested investors. We can secure/fabricate machines and equipment, install the factory, train you and/or your workers, link you up with suppliers of raw materials, and buyers of finished products and generally stand in as your consultant on a continuing basis if you desire. Call 08181926534 or whatsapp 08037788438 for more details and discussions.
cost of expeller
cost of malaysian expeller
whats the difference
Cromagnon, if I understand what you mean by the question you asked, you are asking of the difference between Nigerian assembled expellers and the Malaysian Expellers and their costs. The two machines are different in that the cost of one Malaysian expeller can is about ten times that of the Nigerian assembled expeller. Again for smooth operation, you must start with two Malaysian expellers as they use the double press system while with Nigerian assembled expellers, you only need one expeller to start as these Nigerian expellers are single press machines. Example for brand new machines, you will need about $30,000 multiplied by two, that is $60,000 to acquire Malaysian expellers and start while you can buy a single good and reliable Nigerian expeller with guarantee for about N1,000,000 which is less than $2,800. The only issue is that Nigerian assembled machines do not have standards. So a Nigerian assembled expeller built by one Mr XYZ, a roadside welder is not the same as that built by an experienced professional. So most of these charlatans who call themselves expeller fabricators destroy confidence in Nigerian assembled expellers. Good Nigerian assembled expellers achieve more than 40% extraction rate with good quality kernel nuts just like the Malaysian expeller double press system. The only issue with Nigerian assembled machines is that operators must adopt a good machine management technique which will ensure that the crushing chamber (the basket, worm and shaft) is always in top condition. It must be pointed out also that the Malaysian expellers cannot achieve good performance if the crushing chamber is not in top condition.
An Overview of the Palm kernel oil Production Business
The oil palm tree bears the fresh red oil fruit which is one of the most important fruit crops globally because the benefits that is gotten from all parts of the tree, from the palm fronds, to the red palm oil extracted from the fruits and the palm kernel oil extracted from the palm nuts. There are three forms of palm kernel oil extraction; chemical, mechanical and traditional. The chemical extraction involves the use a chemical solvent such as Haxane, the mechanical is easier but requires screw press machines, while the traditional method is more labor consuming but requires fewer machines.
The demand for palm kernel oil has increased globally as more than 54 million tons were produced in 2011. The demand is due to the cheap nature of the oil for those who use it to cook, as it is used to produce vegetable oil, and has higher saturated fat that is close to the amount contained in coconut oil.
The demand is also spiked by those who manufacture cosmetics, candles, detergents, as well as food products due to its properties which make it very versatile in the industry, especially as it has a high melting point.
Globally, Malaysia is the highest producer of palm kernel oil and is responsible for 44% of world exports. Malaysia started refining its crude palm oil in the early 70s which came about as a resolve of the country’s government to increase industrialization. Oil palm trees mainly grow in countries that have rain forests such as Asian countries and African countries.
As at 2013, 55 million metric tons of palm kernel oil was consumed globally, this was nearly four times of what was consumed two decades back. Asides Malaysia, Indonesia is the second highest producer of palm kernel oil. The two countries meet 85% of global demand.
There however have been setbacks for this business as more health-conscious organizations are advocating for the boycott of palm oil and its by-products and advocating instead for the use of organic palm oil in products especially consumable products.
This is due to the fact that palm oil producers in a bid to make profit are not transparent, do not observe strict environmental standards and practice unfair labor policies. Also, oil palm plantations are said to be gradually destroying the rain forest and the different species found there.
There are some consequences to producing oil palms which are deforestation and habitat destruction, but this has however not made the few replaceable alternatives attractive enough for most of the food and industrial manufacturers, as even the alternatives will lead to more destruction to the forests and climates. Also, the alternatives do not have a sustainable nature like the palm kernel oil and might not be able to meet the growing global demand.