• Wednesday, July 24, 2024
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Establishment of mini vegetable oil refinery


Establishment of vegetable oil refinery can be justified on the following grounds:

The present production level of vegetable oil in Nigeria cannot meet the demand of Nigerians. There is ban placed on importation of vegetable oil into the country in order to encourage local investors to go into its production. This has made the business to be lucrative. Existing producers of vegetable oil in the country are currently enjoying sellers’ market as prospective buyers will have to deposit in advance before they can be supplied with the product.

Vegetable oil is one of the chief sources of vitamins needed for proper functioning of the body tissues. Provision of vegetable oil will contribute to the improvement of our dietary pattern and health came delivery system.

The project is technically feasible and economically viable. Raw materials for vegetable oil refinery are palm kernel oil, red palm oil, crude soya oil, sunflower oil and crude groundnut oil. These are locally available in abundance. The primary materials, that is, the seeds can be successfully grown in abundance in Nigeria. With the establishment of vegetable oil refineries, this will encourage farmers to produce more oil seeds. The resultant effects are rural development and more rural income. The project will help the nation to achieve self reliance. Production of vegetable oil in abundance locally will discourage importation or smuggling. This will conserve foreign exchange and improve the country’s foreign reserve.

More employment opportunities will be generated. In this vein, the project will contribute its quota to the national assignment of solving the unemployment problem in the country. This will greatly reduce the level of social vices in the country.

Technical information

To refine vegetable oil involves the process of de-gumming, de-odorisation, free fatty acids removal and filtration of crude oil such as palm kernel oil. The project establishment involves site procurement, construction of relevant buildings, procurement and installation of plant and machinery, recruitment of appropriate personnel, sourcing of raw materials and commercial take off. Serious minded investors can be assisted to set up the project.

With the newly introduced credit guarantee scheme by the Central Bank of Nigeria (CBN) for the productive sector, investors can access credit to execute this project. Detailed feasibility study is a pre-requisite to access such fund. Genuine investors can be packaged to access this credit scheme.


The plant has an installed capacity of 300 metric tons per annum. Minimum profit margin of N30,000 can be made on a tonne of refined oil. This translates to annual profit of N9 million. This is another viable project than can be successfully established in Nigeria.

Financial implication

Pre-investments : 200,000

Land and building (rental) : 500,000

Plant and machinery : 2,500,000

Utilities : 1,000,000

Working capital : 2,000,000

Total N6,200,000.