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Palm Oil Mill in Oyo State - page 3 / 10

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1.2 Opportunity

The economic opportunity comes from three main areas: the demand for palm oil, the availability of palm nut trees and suitable climate, and the availability of labor. Each will be discussed briefly.

The local demand for palm oil is substantial. It is estimated that for every five people in Nigeria, perhaps two liters of palm oil or more are consumed each month for cooking. There are probably probably between 5 and 10 million people living in or near Ibadan, so that possibly 50 million liters of oil or more are needed to supply this market per year. It is not known how much of this demand is supplied by local palm oil producers, but it seems likely that much of this oil must be brought in from outside Oyo state. It has been reported that, although once a significant exporter of palm oil, Nigeria is now an importer, and it is possible the some of this demand may be currently supplied by foreign imports. In any case, it does not seem likely that the introduction of two million liters per year or less into the local market will have significant adverse e ects on either the existing local producers or the local wholesale price.

Although only a fraction of the local demand would seem to be met by locally produced palm oil, there is clearly the potential to produce much more. Palm nut trees are grown in a number of tropical areas around the world, but they are native only to the tropical ares of West Africa. In the vicinity of Ibadan are large numbers of palm nut trees, although it seems that the fruit is harvested from only a relatively small number of them. Clearly the local soil and climate is well suited to the palm nut tree, and there seems to be enough land that is not currently productive that would be suitable for establishing a plantation.

In addition to a good potential supply of palm fruit and a ready market for the oil, it is important that there be a good supply of a ordable labor. This clearly is present, as the only requirements are a general education and a willingness to be trained in the specifics of the plantation care and harvest- ing or machine operation. There will also be a need for a few management level people, with advanced skills and background in areas such as agron- omy, industrial engineering, and perhaps chemical engineering. We expect to identify Americans supportive of the project who would be interested in filling some of these positions. Some Nigerians would also be needed fill the management needs.

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