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Palm Oil Production Business Plan: How to Setup for Good Profits

Table of contents, what is palm oil, need for palm oil, why start a palm oil production business, setting up a palm oil plantation, process of palm oil production, harvesting process, how to start a palm oil production business, palm oil production business plan template, marketing and sales strategy, financial plan.

The palm oil production business plan is a comprehensive guide that covers all aspects of starting a palm oil production business. This includes the feasibility study, market research, financial projections, and more. The palm oil production business plan is a valuable resource for entrepreneurs who want to enter the palm oil industry.

It provides important information on the market, competition, and strategies for success. This business plan will help you make informed decisions about starting a palm oil production business. It is essential reading for anyone considering this type of venture.

Palm oil production business plan

It is an edible vegetable oil derived from the fruit of the oil palm tree. It is the world’s most widely produced edible oil and is used in various food products, cosmetics, and biofuels. However, palm oil production is a complex and capital-intensive process requiring significant land, labor, and infrastructure investment. Therefore, a palm oil production business plan must consider these factors to succeed.

The first step in starting a palm oil production business is to acquire the necessary land and infrastructure. This can be done by leasing, purchasing existing plantations, or by developing new plantations. The next step is to hire the labor force to operate the plantation and process the palm fruit into crude palm oil (CPO). Finally, the CPO must be refined into finished products such as cooking oil, biodiesel, or other end uses.

In case you missed it: How to Start a Wholesale Oil Business In India

A successful palm oil production business plan will consider these costs and factor them into a comprehensive financial model. The model should include detailed assumptions about yield, operating costs, capital costs, selling prices, and other relevant factors. With this information, investors can make informed decisions about whether or not to proceed with a particular palm oil production project.

As the population continues to grow across the globe, so does the demand for food. To meet this demand, farmers are increasingly turning to palm oil as a source of vegetable oil. Palm oil is a type of edible (cooking) oil extracted from the fruit of the African oil palm tree. It is high in saturated fats and has several uses, including cooking, cosmetics, and biofuel. The demand for palm oil has grown significantly in recent years as it is seen as a more efficient and sustainable option than other vegetable oils.

It takes less land to produce palm oil than other oils, such as soybean or rapeseed oil, making it more environmentally friendly. In addition, palm oil can be produced with little or no water, making it ideal for countries that experience water shortages. However, palm oil production has come at a cost to the environment. Clearing rainforests for palm plantations has contributed to deforestation and climate change.

In case you missed it: Herbal Oil Project Report, Making Process

In addition, pesticides and fertilizers on these plantations can pollute rivers and groundwater. There are also concerns about the working conditions on some plantations, where workers may be exposed to hazardous chemicals or forced to work long hours for low wages. Despite these concerns, palm oil remains an essential part of the global economy and will likely continue to play a role in meeting the world’s growing demand for food.

There are many reasons to start a palm oil production business. Palm oil is versatile and healthy oil used in various products. It is also a sustainable source of income for smallholder farmers and can help improve rural communities’ livelihoods. Starting a palm oil business can be a viable and profitable venture for entrepreneurs looking to make a difference in the world.

Palm oil production can help create jobs, provide economic opportunities in rural areas, and contribute to developing more sustainable supply chains. In addition, palm oil businesses can promote best practices in palm oil production and sustainability, which can help protect this important natural resource.

A palm oil plantation is a large farm that produces palm oil. This palm oil is a vegetable oil extracted from palm trees’ fruits. It is used in cooking and also as a biofuel. To set up a palm oil plantation, you must acquire land, obtain financing, plant trees, and hire workers. The process can take several years and requires significant investment. But once operational, a palm oil plantation can be a profitable enterprise.

In case you missed it: Oregano Oil Project Report, Business Plan

The process of palm oil production is a long and complicated one. It begins with the harvesting of fruit from palm trees. The fruit is then transported to a mill, where it is crushed, and the oil is extracted. The extracted oil is then transported to a refinery and refined into palm oil. The refined palm oil is then transported to a fractionation plant and fractionated into various oil grades. The different grades of palm oil are then transported to buyers who use them for various purposes. Palm oil is used in different products, including cosmetics, soaps, detergents, and margarine.

The harvesting process of palm oil production is a complex and labor-intensive operation. It involves using large machines to extract the oil from the palm fruits and a great deal of manual labor. The process begins with the collection of ripe palm fruits from the trees. These fruits are then transported to the mill, where they are crushed and pressurized to extract the oil.

After the palm oil has been extracted, it is refined and processed into various products. These products are then shipped to customers around the world. The entire process of palm oil production is quite complex and requires a great deal of planning and coordination.

If you are looking to start a palm oil production business, there are a couple of things you need to know. First, palm oil is a type of vegetable oil derived from the fruit of the oil palm tree. It is used in various products, including food, cosmetics, and biodiesel fuel. The first and foremost thing you need to do when starting a palm oil production business is to create a business plan. This will help determine the costs and benefits of starting your own business.

You will also need to find a suitable location for your business. Living in an area with many palm trees will be easier than living without them. Once you have your business plan and location, you must purchase the necessary equipment. This includes an oil press, extraction machine, and refining machine. You will also need to buy palm fruits from farmers or suppliers. Once you have your equipment and raw materials, you can produce palm oil.

In case you missed it: Cedarwood Oil Project Report, Business Plan

The fruit must first be harvested from the trees to produce palm oil. This is done by hand or with the use of machines. The next step is extracting the fruit oil using an extraction machine. After the oil has been extracted, it has to go through refining process before it can be used in products or sold as fuel. 

If you’re looking to start a palm oil production business, you’ll need a comprehensive business plan. Luckily, we’ve got a template that will help you get started. This palm oil production business plan template includes an executive summary, company overview, market analysis, financial projections, and more.

With this template, you can quickly and easily develop a professional business plan for your new venture. To start your palm oil production business plan, download the template and fill in the necessary information. Once you’re finished, you’ll have a professional document to help secure funding and get your business off the ground.

The marketing and sales strategy for a palm oil production business plan should include a detailed analysis of the target market, the competition, and the company’s strengths and weaknesses. The plan should also include a sales forecast, a marketing budget, and a timeline for implementing the marketing and sales strategy.

A well-written business plan for a palm oil production company should include a detailed financial plan. This financial plan should include a section on the company’s current financial situation and future income and expenses projections. The financial plan should start with a brief overview of the company’s current financial situation.

In case you missed it: Argan Oil Project Report, Business Plan

This overview should include the company’s revenue, expenses, and cash flow. It should also discuss the company’s existing debts and assets. Next, the financial plan should provide projections for the company’s future income and expenses. These projections should be based on realistic assumptions about the future palm oil market and its costs.

The projections should show how much money the company will likely make or lose over the next few years. Finally, the financial plan should include a discussion of the risks that could affect the company’s ability to meet its financial goals. These risks could include changes in palm oil prices, unexpected increases in production costs, or delays in getting new palm oil plantations up and running.

A palm oil production business can be a very lucrative venture. With the right business plan in place, you can reap the benefits of this highly profitable industry. However, it is essential to research and develop a solid plan before getting started. This will help you avoid potential pitfalls and ensure your business is booming.

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How to write a business plan for an oil palms farm?

Putting together a business plan for an oil palms farm can be daunting - especially if you're creating a business for the first time - but with this comprehensive guide, you'll have the necessary tools to do it confidently.

We will explore why writing one is so important in both starting up and growing an existing oil palms farm, as well as what should go into making an effective plan - from its structure to content - and what tools can be used to streamline the process and avoid errors.

Without further ado, let us begin!

In this guide:

Why write a business plan for an oil palms farm?

• What information is needed to create a business plan for an oil palms farm?
• How do I build a financial forecast for an oil palms farm?

The written part of an oil palms farm business plan

• What tool should I use to write my oil palms farm business plan?

Having a clear understanding of why you want to write a business plan for your oil palms farm will make it simpler for you to grasp the rationale behind its structure and content. So before delving into the plan's actual details, let's take a moment to remind ourselves of the primary reasons why you'd want to create an oil palms farm business plan.

To have a clear roadmap to grow the business

It's rarely business as usual for small businesses. The economy follows cycles where years of growth are followed by recessions, and the business environment is always changing with new technologies, new regulations, new competitors, and new consumer behaviours appearing all the time...

In this context, running a business without a clear roadmap is like driving blindfolded: it's dangerous at best. That's why writing a business plan for an oil palms farm is essential to create successful and sustainable businesses.

To write an effective business plan, you will need to take stock of where you are (if you are already in business) and where you want the business to go in the next three to five years.

Once you know where you want your oil palms farm to be, you'll have to identify:

• what resources (human, equipment, and capital) are needed to get there,
• at what pace the business needs to progress to get there in time,
• and what risks you'll face along the way.

Going through this process regularly is beneficial, both for startups and existing companies, as it helps make informed decisions about how best to allocate resources to ensure the long-term success of the business.

To maintain visibility on future cash flows

Businesses can go for years without making a profit, but they go bust as soon as they run out of cash. That's why "cash is king", and maintaining visibility on your oil palms farm's future cash flows is critical.

How do I do that? That's simple: you need an up-to-date financial forecast.

The good news is that your oil palms farm business plan already contains a financial forecast (more on that later in this guide), so all you have to do is to keep it up-to-date.

To do this, you need to regularly compare the actual financial performance of your business to what was planned in your financial forecast, and adjust the forecast based on the current trajectory of your business.

Monitoring your oil palms farm's financial health will enable you to identify potential financial problems (such as an unexpected cash shortfall) early and to put in place corrective measures. It will also allow you to detect and capitalize on potential growth opportunities (higher demand from a given segment of customers for example).

To secure financing

Whether you are a startup or an existing business, writing a detailed oil palms farm business plan is essential when seeking financing from banks or investors.

This makes sense given what we've just seen: financiers want to ensure you have a clear roadmap and visibility on your future cash flows.

Banks will use the information included in the plan to assess your borrowing capacity (how much debt your business can support) and your ability to repay the loan before deciding whether they will extend credit to your business and on what terms.

Similarly, investors will review your plan carefully to assess if their investment can generate an attractive return on investment.

To do so, they will be looking for evidence that your oil palms farm has the potential for healthy growth, profitability, and cash flow generation over time.

Now that you understand why it is important to create a business plan for an oil palms farm, let's take a look at what information is needed to create one.

Information needed to create a business plan for an oil palms farm

You need the right data in order to project sales, investments and costs accurately in the financial forecast of your oil palms farm business plan.

Below, we'll cover three key pieces of information you should gather before drafting your business plan.

Carrying out market research for an oil palms farm

As you consider writing your business plan for an oil palms farm, conducting market research becomes a vital step to ensure accurate and realistic financial projections.

Market research provides valuable insights into your target customer base, competitors, pricing strategies, and other key factors that can significantly impact the commercial success of your business.

Through this research, you may uncover trends that could influence your oil palms farm.

You may discover that the demand for oil palms is increasing in the area, which could lead to increased profits for your farm. Additionally, research could reveal that consumers may be looking for more organic and sustainable oil palm products, which could open up new opportunities for your farm to tap into.

Such market trends play a significant role in forecasting revenue, as they offer valuable data about potential customers' spending habits and preferences.

By incorporating these findings into your financial projections, you can present investors with more accurate information, helping them make informed decisions about investing in your oil palms farm.

Developing the sales and marketing plan for an oil palms farm

As you embark on creating your oil palms farm business plan, it is crucial to budget sales and marketing expenses beforehand.

A well-defined sales and marketing plan should include precise projections of the actions required to acquire and retain customers. It will also outline the necessary workforce to execute these initiatives and the budget required for promotions, advertising, and other marketing efforts.

This approach ensures that the appropriate amount of resources is allocated to these activities, aligning with the sales and growth objectives outlined in your business plan.

The staffing and equipment needs of an oil palms farm

Whether you are at the beginning stages of your oil palms farm or expanding its horizons, having a clear plan for recruitment and capital expenditures (investment in equipment and real estate) is vital to ensure your business's success.

To achieve this, both the recruitment and investment plans must align coherently with the projected timing and level of growth in your forecast. It is essential to secure appropriate funding for these plans.

A oil palms farm might incur staffing costs such as wages for farm workers, salaries for farm managers, and other staff costs such as benefits and insurance. Equipment costs might include tractors, harvesters, and other machinery, as well as fuel and maintenance costs for the machinery. Additionally, the farm might incur costs for irrigation systems, fertilizer, and other supplies.

To create a financial forecast that accurately represents your business's outlook, remember to factor in other day-to-day operating expenses.

Now that you have all the necessary information, it's time to dive in and start creating your business plan and developing the financial forecast for your oil palms farm.

What goes into your oil palms farm's financial forecast?

The objective of the financial forecast of your oil palms farm's business plan is to show the growth, profitability, funding requirements, and cash generation potential of your business over the next 3 to 5 years.

The four key outputs of a financial forecast for an oil palms farm are:

• The profit and loss (P&L) statement ,
• The projected balance sheet ,
• The cash flow forecast ,
• And the sources and uses table .

Let's look at each of these in a bit more detail.

The projected P&L statement

The projected P&L statement for an oil palms farm shows how much revenue and profits your business is expected to generate in the future.

Ideally, your oil palms farm's P&L statement should show:

• Healthy growth - above inflation level
• Improving or stable profit margins
• Positive net profit

Expectations will vary based on the stage of your business. A startup will be expected to grow faster than an established oil palms farm. And similarly, an established company should showcase a higher level of profitability than a new venture.

The forecasted balance sheet of your oil palms farm

The projected balance sheet of your oil palms farm will enable the reader of your business plan to assess the overall financial health of your business.

It shows three elements: assets, liabilities and equity:

• Assets: are productive resources owned by the business, such as equipment, cash, and accounts receivable (money owed by clients).
• Liabilities: are debts owed to creditors, lenders, and other entities, such as accounts payable (money owed to suppliers).
• Equity: includes the sums invested by the shareholders or business owners and the profits and losses accumulated by the business to date (which are called retained earnings). It is a proxy for the value of the owner's stake in the business.

Analysing your oil palms farm projected balance sheet provides an understanding of your oil palms farm's working capital structure, investment and financing policies.

In particular, the readers of your plan can compare the level of financial debt on the balance sheet to the equity value to measure the level of financial risk (equity doesn't need to be reimbursed, while financial debt must be repaid, making it riskier).

They can also use your balance sheet to assess your oil palms farm's liquidity and solvency:

• A liquidity analysis: focuses on whether or not your business has sufficient cash and short-term assets to cover its liabilities due in the next 12 months.
• A solvency analysis: takes and longer view to assess whether or not your business has the capacity to repay its debts over the medium-term.

The cash flow forecast

As we've seen earlier in this guide, monitoring future cash flows is the key to success and the only way of ensuring that your oil palms farm has enough cash to operate.

As you can expect showing future cash flows is the main role of the cash flow forecast in your oil palms farm business plan.

It is best practice to organise the cash flow statement by nature in order to show the cash impact of the following areas:

• Cash flow generated from operations: the operating cash flow shows how much cash is generated or consumed by the business's commercial activities
• Cash flow from investing activities: the investing cash flow shows how much cash is being invested in capital expenditure (equipment, real estate, etc.) either to maintain the business's equipment or to expand its capabilities
• Cash flow from financing activities: the financing cash flow shows how much cash is raised or distributed to financiers

Looking at the cash flow forecast helps you to make sure that your business has enough cash to keep running, and can help you anticipate potential cash shortfalls.

Your oil palms farm business plan will normally include both yearly and monthly cash flow forecasts so that the readers can view the impact of seasonality on your business cash position and generation.

The initial financing plan

The initial financing plan - also called a sources and uses table - is an important tool when starting an oil palms farm.

It shows where the money needed to set up the business will come from (sources) and how it will be allocated (uses).

Having this table helps understand what costs are involved in setting up the oil palms farm, how the risks are distributed between the shareholders and the lenders, and what will be the starting cash position (which needs to be sufficient to sustain operations until the business breaks even).

Now that the financial forecast of an oil palms farm business plan is understood, let's focus on what goes into the written part of the plan.

The written part of the business plan is where you will explain what your business does and how it operates, what your target market is, whom you compete against, and what strategy you will put in place to seize the commercial opportunity you've identified.

Having this context is key for the reader to form a view on whether or not they believe that your plan is achievable and the numbers in your forecast realistic.

The written part of an oil palms farm business plan is composed of 7 main sections:

• The executive summary
• The presentation of the company
• The products and services
• The market analysis
• The strategy
• The operations
• The financial plan

Let's go through the content of each section in more detail!

1. The executive summary

The first section of your oil palms farm's business plan is the executive summary which provides, as its name suggests, an enticing summary of your plan which should hook the reader and make them want to know more about your business.

When writing the executive summary, it is important to provide an overview of the business, the market, the key financials, and what you are asking from the reader.

Start with a brief introduction of the business, its name, concept, location, how long it has been in operation, and what makes it unique. Mention any services or products you plan to offer and who you sell to.

Then you should follow with an overview of the addressable market for your oil palms farm, current trends, and potential growth opportunities.

You should then include a summary of your key financial figures such as projected revenues, profits, and cash flows.

Finally, you should detail any funding requirements in the ask section.

2. The presentation of the company

The second section in your oil palms farm's business plan should focus on the structure and ownership, location, and management team of the company.

The structure and ownership part provides an overview of the legal structure of the business, who the owners are and how much each has invested and owns. If you are seeking financing it is important that the reader gets a clear picture of which legal entity is receiving the funds, and who controls the business.

The location part should give an overview of the premises from which the company is operating, and why that location is of particular interest (catchment area, accessibility, amenities nearby, etc.).

When describing the location of your oil palms farm to a third party financier, focus on the potential of the surrounding area. You could mention the potential for infrastructure development, access to resources, and a growing local economy, as these could all be attractive to investors. Additionally, you could point out the potential for the farm to benefit from any local government incentives that may be available in the area, or the potential for the farm to gain access to a large customer base. You could also mention the potential for the farm to be located near other successful agricultural businesses, which could help demonstrate the potential profitability of the farm. Finally, you could emphasize the potential for the farm to be located in an area that provides a stable climate, which could help ensure the farm's success.

Finally, you should introduce the management team. Explain each member's role, background, and experience.

It is also important to emphasize any past successes that the members of the management team have achieved, and how long they've been working together, as this will help potential lenders or investors understand why they should trust in their leadership.

3. The products and services section

The products and services section of your business plan should include a detailed description of the offerings that your company provides to its customers. 

For example, your oil palms farm could offer customers fresh, organic palm oil, high-quality palm oil products such as cooking oil and biodiesel, and technical assistance regarding the proper use and upkeep of the oil palms. The fresh, organic palm oil would provide customers with a healthier, tastier cooking oil option, the palm oil products would give customers a range of products to choose from, and the technical assistance would be invaluable in helping customers ensure that their oil palms are properly cared for and producing the best quality oil possible.

When drafting this section, you should be precise about the categories of products or services you sell, the types of customers you are targeting and how customers can buy them.

4. The market analysis

When presenting your market analysis in your oil palms farm business plan, you should detail the customers' demographics and segmentation, target market, competition, barriers to entry, and any regulations that may apply.

The goal of this section is to help the reader understand how big and attractive your market is, and demonstrate that you have a solid understanding of the industry.

You should start with the demographics and segmentation subsection, which gives an overview of the addressable market for your oil palms farm, the main trends in the marketplace, and introduces the different customer segments and their preferences in terms of purchasing habits and budgets.

The target market section should follow and zoom on the customer segments your oil palms farm is targeting, and explain how your products and services meet the specific needs of these customers.

For example, your target market might include small-scale vegetable farmers that are looking for a reliable source of palm oil for their business. These farmers may need to purchase the oil in small quantities and may be looking for a local supplier. Lastly, they may be looking for a reasonable price and quality product.

Then comes the competition subsection, where you should introduce your main competitors and explain what differentiates you from them.

Finally, you should finish your market analysis by giving an overview of the main regulations applicable to your oil palms farm.

5. The strategy section

When you write the strategy section of your oil palms farm business plan, remember to cover key elements such as your competitive edge, pricing strategy, sales & marketing plan, milestones, and risks and mitigants.

In the competitive edge subsection, elaborate on what makes your company stand out from competitors. This becomes especially important if you're a startup, aiming to carve a place for yourself amidst established players in the marketplace.

The pricing strategy subsection should demonstrate how you plan to maintain profitability while offering competitive prices to attract customers.

Outline your sales & marketing plan, detailing how you'll reach out to new customers and retain existing ones through loyalty programs or special offers.

For the milestones subsection, outline your company's achievements to date and your main objectives for the future, complete with specific dates to set clear expectations for progress.

Lastly, the risks and mitigants subsection should address the main risks that could affect your plan's execution. Explain the measures you've put in place to minimize these risks, assuring potential investors or lenders.

Your oil palms farm could face the risk of bad weather. Conditions such as heavy rain or drought might affect the amount of oil palm crops that are produced. Additionally, pests and diseases may occur and cause damage to the plantations. Pests could spread quickly and cause significant damage to the trees if not managed well.

6. The operations section

The operations of your oil palms farm must be presented in detail in your business plan.

Begin by addressing your staff, specifying the main roles and your recruitment plan to support the anticipated growth. Outline the qualifications and experience needed for each role and discuss your recruitment strategies, which may involve using job boards, referrals, or headhunters.

Next, clearly state your oil palms farm's operating hours, allowing the reader to gauge the adequacy of your staffing levels. Additionally, mention any considerations for varying opening times during peak seasons and your approach to handling customer queries outside regular operating hours.

The key assets and intellectual property (IP) required to run your business should also be highlighted. If you rely on licenses, trademarks, physical structures like equipment or property, or lease agreements, ensure they are well-documented in this section.

You may have key assets and IP such as the land itself and the machinery used to process the oil. The land could be a valuable asset for the oil palms farm, as it could provide the means to cultivate the oil palms and make a profit. The machines used to process the oil may also be an important asset as they could help the farm to efficiently produce oil and increase their yield.

Finally, provide a comprehensive list of suppliers you intend to collaborate with, along with a breakdown of their services and main commercial terms, such as price, payment terms, break clauses and contract duration. Investors often seek insight into the reasons behind your supplier choices, which may include a preference for higher-quality products or established relationships from past ventures.

7. The presentation of the financial plan

The financial plan section is where we will include the financial forecast we talked about earlier in this guide.

Now that you have a clear idea of the content of an oil palms farm business plan, let's look at some of the tools you can use to create yours.

What tool should I use to write my oil palms farm's business plan?

In this section, we will be reviewing the two main options for writing an oil palms farm business plan efficiently:

• Using specialized software,
• Outsourcing the drafting to the business plan writer.

Using an online business plan software for your oil palms farm's business plan

Using online business planning software is the most efficient and modern way to create an oil palms farm business plan.

There are several advantages to using specialized software:

• You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
• You are guided through the writing process by detailed instructions and examples for each part of the plan
• You can access a library of dozens of complete business plan samples and templates for inspiration
• You get a professional business plan, formatted and ready to be sent to your bank or investors
• You can easily track your actual financial performance against your financial forecast
• You can create scenarios to stress test your forecast's main assumptions
• You can easily update your forecast as time goes by to maintain visibility on future cash flows
• You have a friendly support team on standby to assist you when you are stuck

If you're interested in using this type of solution, you can try The Business Plan Shop for free by signing up here .

Hiring a business plan writer to write your oil palms farm's business plan

Outsourcing your oil palms farm business plan to a business plan writer can also be a viable option.

These writers possess valuable experience in crafting business plans and creating accurate financial forecasts. Additionally, enlisting their services can save you precious time, enabling you to concentrate on the day-to-day operations of your business.

It's important to be mindful, though, that hiring business plan writers comes with a cost. You'll be paying not just for their time but also for the software they use, and their profit margin.

Based on experience, a complete business plan usually requires a budget of at least £1.5k ($2.0k) excluding tax, and more if revisions are needed after initial meetings with lenders or investors - changes often arise following these discussions.

When seeking investment, be cautious about spending too much on consulting fees. Investors prefer their funds to contribute directly to business growth. Thus, the amount you spend on business plan writing services and other consulting services should be negligible compared to the amount you raise.

Another aspect to consider is that while you'll receive the output of the business plan, you usually won't own the actual document. It will be saved in the consultant's business plan software, which will make updating the plan challenging without retaining the consultant on a retainer.

Given these factors, it's essential to carefully weigh the pros and cons of outsourcing your oil palms farm business plan to a business plan writer and decide what best suits your business's unique needs.

Why not create your oil palms farm's business plan using Word or Excel?

Using Microsoft Excel and Word (or their Google, Apple, or open-source equivalents) to write an oil palms farm business plan is a terrible idea.

For starters, creating an accurate and error-free financial forecast on Excel (or any spreadsheet) is very technical and requires both a strong grasp of accounting principles and solid skills in financial modelling.

As a result, it is unlikely anyone will trust your numbers unless - like us at The Business Plan Shop - you hold a degree in finance and accounting and have significant financial modelling experience in your past.

The second reason is that it is inefficient. Building forecasts on spreadsheets was the only option in the 1990s and early 2000s, nowadays technology has advanced and software can do it much faster and much more accurately.

And with the rise of AI, software is also becoming smarter at helping us detect mistakes in our forecasts and helping us analyse the numbers to make better decisions.

Also, using software makes it easy to compare actuals vs. forecasts and maintain our forecasts up to date to maintain visibility on future cash flows - as we discussed earlier in this guide - whereas this is a pain to do with a spreadsheet.

That's for the forecast, but what about the written part of my oil palms farm business plan?

This part is less error-prone, but here also software brings tremendous gains in productivity:

• Word processors don't include instructions and examples for each part of your business plan
• Word processors don't update your numbers automatically when they change in your forecast
• Word processors don't handle the formatting for you

Overall, while Word or Excel may be viable options for creating an oil palms farm business plan for some entrepreneurs, it is by far not the best or most efficient solution.

• A business plan has 2 complementary parts: a financial forecast showcasing the expected growth, profits and cash flows of the business; and a written part which provides the context needed to judge if the forecast is realistic and relevant.
• Having an up-to-date business plan is the only way to keep visibility on your oil palms farm's future cash flows.
• Using business plan software is the modern way of writing and maintaining business plans.

We hope that this practical guide gave you insights on how to write the business plan for your oil palms farm. Do not hesitate to get in touch with our team if you still have questions.

Also on The Business Plan Shop

• In-depth business plan structure
• Key steps to write a business plan?
• Free business plan template

Know someone who owns or wants to start an oil palms farm? Share this article with them!

Founder & CEO at The Business Plan Shop Ltd

Guillaume Le Brouster is a seasoned entrepreneur and financier.

Guillaume has been an entrepreneur for more than a decade and has first-hand experience of starting, running, and growing a successful business.

Prior to being a business owner, Guillaume worked in investment banking and private equity, where he spent most of his time creating complex financial forecasts, writing business plans, and analysing financial statements to make financing and investment decisions.

Guillaume holds a Master's Degree in Finance from ESCP Business School and a Bachelor of Science in Business & Management from Paris Dauphine University.

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How to Start a Palm Oil Production Business?

Explore our guide on starting a palm oil production business. Dive into each step, from extraction to purification, for a clear understanding of Starting a Business in Palm Oil Manufacturing.

Discover essential steps to launch a successful palm oil production business. From understanding market trends to setting up processing units, get insights and tips on starting a lucrative palm oil venture.

Palm oil derived from the fruits of African oil palms that thrives in tropical rainforest areas. They are similar to sunflower or rapeseed oil but more widely used.

These oil palms flourish in the humid tropics, especially 10 degrees north and south of the equator. Originally from West and South-West Africa, they're now cultivated and farmed to increase the production of palm oil. You'll find palm oil in many African and Brazilian dishes, as well as in cookies, margarine, and chocolate.

By the way, do you know why palm oil is good for cooking? It's not excessively saturated, contains no linolenic acid, and is high in natural vitamin E – making it ideal for frying and grilling. Hence, it's a top choice in kitchens.

The oil extracts from the pulp of the oil palm tree's fruit, which is reddish due to beta-carotene. The fruit is similar to the size of a large olive, contains a single seed, used to make palm kernel oil. Each palm fruit contains about 30-35% oil.

Palm oil is the second most produced edible oil globally. Australia imports around 130,000 tons annually. Indonesia and Malaysia lead in exporting, while India, China, the United States, European Union, and Pakistan are major importers.

Besides cooking, palm oil has medicinal uses, like relieving stomach upsets and promoting eye health with its vitamin A. However, be cautious – studies link palm oil to cholesterol.

Now, let's talk business. The palm oil industry is a money-making machine. While many chase white-collar jobs, the wise ones tap into the agricultural sector's potential. If you're seeking a step-by-step guide to palm oil success, keep reading. Your journey into the palm oil business is about to begin.

So let's start with the market research!

Palm Oil Industry Market Research

India palm oil market (2015).

• Overview : Valued at USD 5.16 billion, driven by population growth and economic advancements.
• Growth Factors : Massive potential with 100% FDI, financial aid, and 95% import reliance.
• Consumption Landscape : Palm oil holds a 40% consumption share in India.

Global Palm Oil Market

• Market Size (2021) : USD 63.65 Billion.
• Revenue forecast (2030) : USD 96.95 Billion
• CAGR : 5.0% from 2022 - 2030
• Projections (2024) : Expected to exceed 85 million metric tons, driven by sustainability and global demand.
• Challenges : Environmental concerns and deforestation impact expansion.

Global Consumption Trends

• Global Consumers : India, Indonesia, and China are major consumers.
• Diverse Applications : Rising demand in food, non-food sectors, and a shift to sustainable production.

Business Preparation and Market Investigation

• Preliminary Stage : Early market investigation for turnkey palm oil factory establishment.
• Success Factors : Research, understanding business nature, competitor analysis, and price awareness are vital.
• Influence of Income and Population: Demand rises with income and population growth.
• Competitor Insight : Essential for project reports and business plans.

Ideal site for a palm oil production plant?

Finding the location to start your palm oil production doesn't require a huge space – it depends on how much palm oil production you're planning.

A small scale palm oil mill plant may consist of only a few palm oil milling machines, while a larger scale palm oil processing plant may include a larger number of machines, as well as additional equipment such as conveyor belts and storage tanks .

In some cases, a complete palm oil processing machine may require a separate space to house the machinery and equipment.

Furthermore, To thrive in this business, start by reaching out to various equipment suppliers. Once you've gathered contacts, delve into preliminary discussions with the palm oil milling equipment and machinery manufacturer. Confirm the product prices, grasp the land space required, and understand the specifications for Starting a palm oil processing company.

Palm Oil Extraction Machine

Now, let's talk about picking the right machine to get palm oil. Once you've decided on the location, the next big thing is choosing a palm oil extraction machine. This step is crucial in the palm oil production business plan .

There are different machines out there, so take your time comparing prices and getting feedback from others in the industry before making your final choice. The best palm oil comes from using the right equipment for pressing and refining.

Below we have combined a table presenting machines/equipment used in the palm Oil extraction process.

Investing in high-quality palm oil processing machines is crucial for long-term time and cost savings. Carefully choose machines for each step, and for effective plant operations, hire competent employees with experience in the palm oil processing industry.

Typical Palm Oil Manufacturing Processes

Embarking on the journey of typical palm oil manufacturing involves intricate steps

The crucial first step treats fruit bunches with steam, eliminating bacteria and arresting enzyme activity. This ensures the cessation of fruit degradation.

The steamer softens oil palm fruits, facilitating the release of natural oil. Post-steam treatment, the fruit masses, containing water, oil, fibers, and palm kernel, undergo a meticulous separation process.

Under high pressure, the natural fruit yields a water-oil mixture. Over time, the distinct layer of palm oil forms, allowing extraction from the water. These initial drops result in natural crude palm oil, necessitating further processing at the edible oil refinery.

Utilizing Bunches and Kernel

Remaining empty fruit bunches fuel steam boilers .

These empty bunches are composted, enriching soil fertility with nutrients for oil palm plantations.

The kernel is transported to a seed crushing plant , which crushes the hard kernel to extract the oil oil using palm kernel oil press machines.

Refining Palm Oil

In an edible oil refinery , crude oil undergoes a meticulous water wash to ensure intensive contact for the removal of water-soluble compounds. This process results in an oil-water mixture from which the lighter, refined edible oil distinctly separates and forms a top layer, ready for further purification and processing.

The oil undergoes a crucial bleaching step, employing natural earth to bind and remove impurities.

Volatile components are removed through steam, transforming into gas that exits the oil. The result is a refined and healthy vegetable oil.

Final Manufacturing

Post-refining, the oil undergoes fractionation, separating into distinct fractions based on specific properties, particularly melting points. A dry fractionation plant , also known as a palm oil fractionation plant, further refines palm oil by separating it into two distinct fractions:

• Palm olein oil and
• Palm stearin oil

This precision allows for the creation of palm oil fractions tailored to diverse applications

Each fraction finds application in a variety of products, from margarine and cookies to creams. Palm oil, post-fractionation, becomes a versatile ingredient in an array of manufacturing processes.

Challenges and Solutions in Palm Oil Production Business

Starting a business in palm oil manufacturing brings both challenges and opportunities. Here's a breakdown of key challenges and practical solutions to navigate this dynamic industry

Cost of Palm Oil Production Business

Embarking on the journey of setting up a palm oil production business demands a grasp of the costs involved.

Licenses And Certification For Palm Oil Mill Business

In the context of a sustainable palm oil production line, various certifications ensure adherence to ethical and environmentally friendly practices. Here are some prominent certifications and licenses associated with sustainable palm oil

It's essential for businesses in the palm oil industry to obtain relevant certifications to demonstrate their commitment to sustainable practices. These certifications not only enhance credibility but also contribute to a positive environmental and social impact.

Seizing Success : Path to Effective Palm Oil Production Business

Starting a palm oil production business is a promising opportunity with the potential for significant profits. With the continuous growth in Africa's population, the demand for palm oil is increasing, making it an opportune time to enter this industry.

The relatively low initial investment makes it accessible for a wide range of entrepreneurs. By getting involved in this thriving business, individuals can not only meet the rising demand for palm oil but also position themselves for substantial financial gains.

We are committed to excellence in the field, and stand ready to support you at every step. With a track record of providing top-notch palm oil processing equipment, tailored solutions, and impeccable services, we ensure your venture is set up for success.

Choose Nandt Engitech as your trusted partner, and let's cultivate success together in the flourishing palm oil industry.

Riyaz Tunvar

Riyaz Tunvar is a seasoned Director at N&T Engitech Pvt Ltd, specializing in sales and marketing for industrial plants, refinery, and machinery manufacturers. His deep understanding of the sector, combined with his customer-centric approach, has played a vital role in positioning N&T Engitech as a trusted name in the market.

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Strategies For Palm Oil Production Business Success

Welcome to our Palm Oil Production Business column. Here, we will provide you with a complete guide to starting your own palm oil business, covering all aspects from palm oil industry market overview to investment return, as well as palm oil mill business plan, palm oil production factory and process design, and palm oil processing equipment selection. 

Want to know more about the palm oil production industry? Check out our related articles for more information now!

• Optimize Your Palm Oil Mill Design for Maximum Productivity
• How to Start Business in Top Palm Oil Producing Countries?
• How to Make Project Cost Budget for Palm Oil Processing Business Setup?
• Start Palm Oil Processing Machine Selection for Business Plan
• Techno-economic Analysis for Palm Oil Production Benefits in Business Setup
• How to Make Palm Oil Production Process Design for Starting Business?
• Business Plan Guideline: Palm Oil Mill Plant Factory Layout Design
• What Is the Market Forecast of Palm Oil Extraction Industry?
• How to Start Palm Oil Business with High Profitability?

The Booming Palm Oil Production Market Palm oil is a crucial ingredient in many of the products we use daily, from food to cosmetics. The palm oil industry has a bright future, with a projected compound annual growth rate of 5.3% from 2021 to 2026. Investing in a palm oil production business can yield high returns, with an average profit margin of 30%. As the demand for palm oil continues to increase, starting your own palm oil milling business is a lucrative opportunity to tap into this growing market.

Essential Factors Before Palm Oil Business Starting: Making Informed Investments

Investing in a palm oil production business can be a lucrative opportunity, given the global demand for palm oil as a versatile commodity. However, it's important to consider several key factors before making an investment decision. 

By carefully considering these key factors, you can make informed decisions and increase your chances of success when investing in your palm oil mill business.

• Market analysis:  In-depth study of the supply and demand dynamics of palm oil in the target market. Understand factors such as consumption patterns, market trends and potential risks.
• Factory site selection:  Consider factors suc​h as proximity to palm plantations, infrastructure, labor availability and market access.
• Business plan and strategy:  The palm oil business plan should cover areas such as land acquisition, palm oil press machine, palm oil production plant capacity, supply chain management and marketing strategy.
• Licensing and regulations:  Ensure compliance with environmental regulations, health and safety standards and land use regulations.
• Technology and equipment:  Invest in modern and efficient palm oil milling equipment to maximize productivity and minimize waste. 
• Financial Management: Analyze the financi​al aspects of the business, including initial investment costs, operating expenses, revenue streams, profitability and cash flow.

ABC Machinery- Your One-Stop Engineering and Construction Partner

At ABC Machinery , we specialize in providing one-stop engineering and construction services for palm oil production businesses. With over 20 years of experience, we offer customized solutions tailored to your specific needs, from feasibility studies to equipment installation and maintenance.

With ABC Machinery as your partner, you can benefit from our extensive experience, expertise, and high-quality palm oil processing equipment and services to ensure the success of your palm oil mill business. If you are interested in setting up a palm oil processing plant, please do not hesitate to contact us for professional advice and technical support!

• - Small Palm Oil Press
• - 1-10 ton/day Mini Palm Oil Mill
• - 1-20 ton/day Small Palm Oil Mill
• - Small Palm Oil Refining Machine
• - fruit reception system
• - sterilizing system
• - threshing system
• - digesting system
• - pressing system
• - crude palm oil clarification system
• - bulk oil storage system
• - palm kernel recovery plant
• - screw oil pressing plant
• - solvent extraction plant
• - Degumming Process
• - Deacidification Process
• - Bleaching Process
• - Deodorization Process

Palm Oil Business Plan

• Description
• Executive Summary
• Products & Services
• Market Analysis

Marketing Plan

• Management Plan

Financial Plan

What you get with palm oil business plan package, i.- executive summary.

Olive Tree Palm Oil, LLC is founded out of a desire to fill an identified need in the market for sustainable palm oil. Despite the growing demand for palm oil, traditional sources of palm oil are largely unsustainable and can have a serious impact on the environment. Olive Tree Palm Oil, LLC offers an alternative—sustainable and ethically-sourced palm oil from local, family-run farms in Portland and the surrounding areas. Our goal is to provide a safe and sustainable source of palm oil that meets the needs of our customers without compromising the environment.

Olive Tree Palm Oil, LLC is providing an innovative solution to the problem of unsustainable palm oil production. Through our sustainable palm oil products sourced from local, family-owned farms, customers are guaranteed the highest quality of palm oil available. We also provide educational materials to help customers understand the importance of sustainability when it comes to palm oil production. In addition, customers can save money on our discounted rates for sustainable palm oil products.

By working with local, family-owned farms and providing sustainable palm oil products, Olive Tree Palm Oil, LLC is playing a pivotal role in promoting sustainability and helping to protect the environment while also serving its customers. Customers can purchase our sustainable palm oil products with the assurance that they are making an environmentally conscious decision that will benefit future generations.

Target Market

Olive Tree Palm Oil, LLC has crafted a target market of customers who are looking for ethically-sourced, sustainable palm oil products. Our target customers include any individual, business, or organization looking to purchase palm oil products from trustworthy and reputable sources. We are committed to providing them with high-quality products that are sustainably produced from our family-run farms. Additionally, we will target customers looking for educational materials about sustainable palm oil production, as well as those looking for discounted prices for their sustainable palm oil products.

Competition

The competitive landscape in the sustainable palm oil market is intense, with a wide range of products and services vying for customer attention. Olive Tree Palm Oil, LLC will be competing against traditional palm oil products as well as a variety of other sustainable palm oil providers. Many of these competitors offer their customers cheaper, less sustainable options for their palm oil needs. In order to stand out from the competition, Olive Tree Palm Oil will focus on providing quality, sustainable palm oil from family-run farms, as well as offering discount options for our customers. We will also offer educational materials about sustainable palm oil production and help our customers find sustainable palm oil suppliers in the area.

Financial Summary

The financial plan of Olive Tree Palm Oil, LLC is designed to cover all costs associated with the establishment and operation of our sustainable palm oil business. Our plan is divided into key highlights related to our sales, costs, and profitability. These elements are detailed in the below bullet points.

• We anticipate our initial costs to launch the business to be approximately $15,000, including legal fees and necessary equipment.
• We anticipate that our sales will reach $120,000 in year one and grow to $400,000 by year three.
• We forecast that our yearly gross profit will reach $240,000 by year three.
• Our business plan outlines a marketing strategy intended to best position our brand and products within the industry.
• We intend to reinvest our profits back into the company by reinvesting in marketing, product research and development, and diversifying our product offerings.

Funding Requirements

Olive Tree Palm Oil, LLC will require capital investment for the following:

• Startup and operational expenses
• Equipment and infrastructure
• Research and development
• Marketing and promotion
• Supplier and vendor relationships
• Employee salaries

The total amount of capital needed to become operational is estimated to be around $500,000. Funds will be allocated across the aforementioned categories to ensure the company has sufficient capital for startup costs and that our sustainable palm oil business can become profitable in a timely manner.

Milestones & Traction

At Olive Tree Palm Oil, LLC, we understand the importance of setting and achieving tangible goals for our company’s progress. We have outlined our current position in the market, as well as short-term and long-term goals. This roadmap is broken down into several categories, such as product research and development, operational set-up, customer engagement, and outreach initiatives.

In the product research and development category, we are currently in the process of researching and developing sustainable and ethical palm oil production practices. We are aiming to develop a variety of refined and unrefined palm oil products to suit the needs of our customers. By the end of 2021, we plan to have completed research and development of these products, and to have them ready for sale to our customers.

In the operational setup category,we plan to open a production facility in Portland, Oregon by the end of 2021. This facility will allow us to process, refine, and package our sustainable and ethical palm oil products. We also plan to use the facility to provide educational materials and resources about the positive impact of sustainable palm oil production.

In the customer engagement and outreach category, we plan to roll out a comprehensive marketing plan by the end of 2021. This plan will focus on increasing our reach and visibility within the Portland area, and on engaging with new and existing customers. We will also be looking to partner with local organizations, to help spread our message of sustainable palm oil production.

Finally, we plan to review and monitor our progress regularly, in order to ensure that we are achieving our goals and staying on track. This review process will not only help us assess our progress, but also take into consideration any developments that may impact our operations.

II.- Products & Services

The current dilemma facing consumers is that palm oil is associated with negative environmental impacts and unethically sourced from large-scale plantations. The global palm oil industry is dependent on unsustainable harvesting, leading to habitat destruction and displacement of local communities. As a result, an alternative source of palm oil that is socially and environmentally responsible is needed.

Olive Tree Palm Oil, LLC will offer a comprehensive suite of palm oil products and services to address the needs of our customers. Our core offering is sustainably sourced palm oil, which we will acquire from family-run palm oil farms in the local Portland area. We provide both refined and unrefined palm oil products, giving our customers multiple options for their needs. In addition, through Olive Tree Palm Oil, LLC, we will also provide educational materials about sustainable palm oil production methods and help customers locate the best suppliers in the area. We will also offer our customers discounts on sustainable palm oil products, giving them the opportunity to buy quality sustainable palm oil at an affordable price. By providing these comprehensive products and services, our customers will be able to find the best, most sustainable palm oil to meet their needs.

Validation of Problem and Solution

The current market for palm oil is largely dominated by non-sustainable suppliers, and this has led to a lack of environmental and social stewardship in the production of palm oil. Studies have demonstrated that sustainable production of palm oil can reduce environmental pressures and safeguard health and livelihoods of local communities. Olive Tree Palm Oil has conducted research to assess the feasibility and impact of introducing sustainable palm oil to the region. Our findings demonstrate that there is a strong market for sustainable palm oil, and that consumers are willing to pay a premium for ethically sourced products. Furthermore, our extensive on-the-ground research has identified local sources, suppliers, and processors that can provide high-quality sustainable palm oil at a price that is competitive in the market.

Product Overview

Olive Tree Palm Oil, LLC is committed to providing quality, sustainable palm oil sustainably sourced from our family-run farms. We offer a variety of refined and unrefined palm oil products to meet the needs of our customers, from luxurious soaps and aromatic oils to commercial-grade ingredients for food processing. Our products are sustainably sourced from our family-run farms, providing customers with a safe, ethically-sourced alternative to traditional palm oil. We also provide educational materials, discounted pricing, and assistance for customers with finding suppliers. Utilizing our sustainable palm oil products provides our customers with the confidence that they are using a product that is certified safe and sustainable.

The sustainable palm oil market is relatively new, and there is not a great deal of competition in the space. However, there are a few business startups offering products similar to ours. Our product stands out by providing quality, sustainable and locally sourced palm oil at an affordable price. We also provide helpful educational materials about sustainable palm oil production and assistance in finding the best palm oil suppliers in the area. These additional offerings set us apart from our competition, as well as offering more than just traditional palm oil.

As part of our mission to provide our customers with quality and sustainable palm oil, we have already taken key steps to establish our business, from choosing a location to submitting the necessary paperwork. Our roadmap to setting up a sustainable palm oil business is as follows:

• Location scouting and selection
• Visiting local, family run-farms to secure our sources of sustainable palm oil
• Registration and licensing
• Formation of our core team
• Determining the pricing of our products
• Developing a comprehensive educational outreach program
• Creating a safe, integrated sales process
• Identifying reliable suppliers of sustainable palm oil

Our roadmap reflects the continuous commitment and hard work of our team to provide our customers with a unique and sustainable palm oil experience. We look forward to continuing to grow in the years to come.

III.- Market Analysis

Market segmentation.

The potential customers for Olive Tree Palm Oil can be segmented into various groups to identify the clear target market. Segmentation is done based on various characteristics such as geographical area, income, preferences for sustainable oil, financial capabilities etc.

The segmentation table is given below:

Target Market Segment Strategy

Our target market segment for our Palm Oil business will include industries looking for reliable, high-quality palm oil to use in the production of food, cosmetics and industrial products. As the demand for palm oil is increasing due to its popularity for providing alternative sources of fat, we plan to meet the ever-growing demand for palm oil in the international market, as well as in local markets.

Our ideal customer would most likely be volume purchasers who need a reliable supply of palm oil. They should have an established business with a strong track record of producing quality products, with a great reputation in the industry. Our customers must demonstrate commitment to quality and ethical practices and should have an adequate financial strength to support their procurement.

Key Customers

Our ideal customer archetype for our palm oil business is, primarily, food companies looking to source their palm oil from a dependable and high quality provider, as well as small-scale agricultural businesses looking for reliable and cost-effective palm oil sourcing and processing. These customers should be drawn to our commitment to quality, diversity, and sustainability, as well as our affordable prices, customer service, and transparent business practices.

Future Markets

The potential palm oil market is expected to remain strong due to its popularity and versatility as a natural product. Our business strategy is to capitalize on new opportunities arising from consumer preferences, and to establish a global presence to capture a larger share of the market. To achieve this, we are committed to continuing our research and development initiatives to expand our production capacity and maintain quality standards, while also investing in marketing and promotional campaigns. Additionally, by forging strategic partnerships with local buyers, we will be able to increase our market penetration, and ensure the sustainability of our business in the long-term.

Olive Tree Palm Oil, LLC’s major competitors are current palm oil producers and suppliers. As an up-and-coming sustainable palm oil provider, the company is smaller and less experienced compared to its competition. Below is a table of potential competitors:

As Olive Tree Palm Oil, LLC is based in the same city and state as its competition, the scale of competition is significantly higher than normal. In order to gain a strong foothold in the market, Olive Tree Palm Oil, LLC must differentiate itself from other palm oil suppliers.

IV.- Marketing and Sales Plan

At Olive Tree Palm Oil, LLC, our primary goal is to create a marketing and sales plan that maximizes our reach while remaining cost efficient. To this end, we plan to implement a mix of traditional and digital marketing strategies, to ensure a wide range of customers have access to our sustainable palm oil. We will target local, ethical consumers as well as corporate customers who are interested in reducing their environmental impact. Our cost-effective strategies will include the following:

• Printed advertisements in local newspapers, magazines and online publications.
• Social media campaigns on relevant social media platforms, such as Twitter and Instagram.
• Word of mouth marketing efforts such as sponsoring community events and developing partnerships with local businesses.
• Educational materials and seminars, to promote sustainable palm oil practices and usage.

In addition to the strategies outlined above, we also have plans to increase customer engagement and loyalty by offering discounts and other incentives. Our goal is to ensure customer satisfaction with our products and services, while still remaining cost-effective in our marketing and sales plan.

We anticipate making a sizable number of sales from our palm oil business given the current market conditions, our capacity and our pricing strategy. Considering the current demand for palm oil, our efficient production capabilities and our competitive prices, we expect to generate impressive sales volumes. Our sales volumes will be further increased by a comprehensive marketing and advertising campaign conducted by our team.

Our current market research suggests that our sales numbers could rise steadily to reach a yearly maximum of XXX units. We base these estimates on our current production setup, the retail and wholesale channels we intend to use and our competitive pricing strategy.

Location and Facilities

Olive Tree Palm Oil, LLC is located in Portland, Oregon, where we have family-owned farms with direct access to the local palm oil we use in our products. Our physical presence in Portland provides us with a cost-effective operation, while our farms provide us with access to high-quality local oil. We have established our facility and are ready to provide our customers with the highest quality sustainable palm oil products.

Our facility includes state-of-the-art equipment for refining and packaging our products. We are also able to offer educational materials and assistance in finding the best sustainable palm oil suppliers in the area. Our space is conveniently located and allows us to serve our customers quickly and effectively.

Our palm oil business plan takes advantage of the latest technological advances to make sure that our clients' investments are well-protected, optimally managed and profitable. With proprietary software specifically designed for the palm oil industry, we are able to track the entire process from planting to harvesting and even distribution and sale. This allows us to create an efficient and accurate supply chain system, ensuring each individual output is maximized for maximum returns. Additionally, our monitoring systems enable predictive analytics to give a better understanding of how market changes may affect our margins, allowing customization of products and strategies when needed.

Equipment and Tools

To successfully operate a palm oil business, we will need to be equipped with the proper tools and equipment. Our required equipment and tools consists of an extraction machine, refining machine, storage tanks for finished product, containers for raw material, and other necessary machinery. We will need to purchase or rent the necessary equipment and consider the associated costs.

The following table outlines the cost associated with purchasing or renting the equipment:

V.- Management and Organization

Organizational structure.

Our organization will be comprised of a CEO, CFO, and Operations Director who together will report to the Board of Directors. Below is an overview of the structure including roles and responsibilites.

The flow of information between the different levels of the organization will be established through frequent communication, regular reporting and performance review sessions. This will help ensure that all members of the organization have access to the same information and can make decisions in order to move the business forward.

Management Team

In order to succeed, PalmOil Business will require experienced professionals in every level of our organizational hierarchy, from top to bottom. We anticipate need to recruit a skilled management team consisting of leadership, sales, operations and finance professionals. The following table outlines the potential candidates we are considering for high-level roles within the company:

Management Team Gaps

At this point in time, our palm oil business plan does not have individuals or candidates ready to fill certain positions or areas of expertise. We recognize the need to dedicate resources towards identifying and training team members who will take over these roles in the future.

We are currently lacking in specific skills related to the marketing and financial aspects of our business. Additionally, we need to identify personnel that possess expertise in the relevant areas of procurement and product management.

Personnel Plan

To run a successful palm oil business, a specific personnel plan must be implemented to ensure the most efficient use of resources. To that end, a table of potential positions required in order to effectively manage and operate the business can be found below:

Company History and Ownership

Olive Tree Palm Oil, LLC was founded in 2021 by Michael and Jessica Johnson, two Portland-area entrepreneurs with a strong background in sustainability and business. The Johnson family saw the need for an alternative palm oil source for customers, as most major brands use unsustainable palm oil sources. The mission of Olive Tree Palm Oil is to provide a safe, quality, and sustainable alternative to traditional palm oil.

The company is owned by Michael and Jessica Johnson and their two adult children, Emily and Jake. They each have equal ownership of the company and maintain a collaborative approach to business decision-making. They are committed to promoting sustainability from both an environmental and an ethical perspective, and are interested in educating their customers about sustainable palm oil practices.

A detailed roadmap of specific goals and objectives can help us manage and steer our palm oil business. We have created a table below outlining our major milestones and targets for the next 12 months.

Key Metrics

Key performance indicators (KPIs) are metrics used to measure and track the performance of various aspects of a palm oil business. These metrics help businesses to assess their overall performance and health, as well as to identify areas of opportunity. Examples of KPIs to measure the performance and health of a palm oil business include gross profit margin, customer satisfaction, production efficiency and effectiveness, inventory turns, and market share. By tracking these and other KPIs, businesses can better understand the functioning of their operations and the impact of their decisions on their overall performance.

VI.- Financial Plan and Metrics

Sales forecast.

A sales forecast is a crucial element of any business plan. It serves to document expected sales performance and provide guidance on necessary budget allocations. Our palm oil business plan includes a three-year sales forecast. Our projected sales are provided in the table below.

Palm Oil Financial Plan Key Inputs

Starting or running any business requires the investement of money. The palm oil business is no different. Additionally, a well formulated business plan should include information on not just income and profits but also expenses. These expenses are bound to fall into two categories: startup costs and operational expenses.

Startup Costs

Operational expenses.

This part of the business plan is where you present the three main financial documents of any startup: the income statement, the cash flow statement, and the balance sheet. These documents provide an overview of the financial activity of the business by providing detailed information on revenue and expenses, cash flow management and asset and liability balances. With these documents, investors can get a comprehensive view of your business plan.

Palm Oil Financial Plan Profit & Loss Statement

Palm Oil Financial Plan Cash Flow Statement

Palm Oil Financial Plan Balance Sheet Statement

The personnel plan for our palm oil business outlines who and how we intend to hire and what the respective remunerations and roles will be in the business operations. We will be hiring experienced and capable personnel who are knowledgeable about the palm oil business. Our hiring efforts will involve recruiting personnel through job postings, networking, and local outreach programs. Additionally, we plan to cultivate relationships with educational institutions to strengthen our recruiting efforts.

The payment structure for our personnel will depend on the hiring role and experience level. While the exact remuneration packages will be based on individual negotiation, they will all remain within the market rate. Furthermore, all personnel will have access to medical and retirement benefits. In terms of roles, our personnel will take on various responsibilities such as managing operations and production, maintaining proper safety and quality standards, developing strategies, and creating promotional material.

Finally, all personnel hired will fit into each of our business operations by having a comprehensive understanding of the palm oil industry and being willing to work together with other personnel in the business. The integration of personnel into the business will be done in a streamlined and efficient manner, with attention to detail and a commitment to delivering excellence in our products and services.

Capital Requirements and Use of Funds

The capital requirements for our palm oil business plan should reflect our estimated costs for startup and ongoing operations. Crucially, the plan should also contain an outline of how the funds raised will be allocated. We intend to allocate our capital in a way that will ensure maximum return on investment for our investors or lenders.

Our capital will be allocated to the following areas:

• Operational expenses, including personnel, materials and equipment, building and facility expenses;
• Marketing and promotional campaigns;
• Administrative costs;
• Research and development; and
• General capital expenditures.

We believe that ensuring adequate capital allocation across these five categories is essential to the success of our business. We also intend to allocate a portion of our capital to promote sustainable palm oil farming practices and to support the communities surrounding our production facilities.

Exit Strategy

The exit strategy for our palm oil business plan is focused on finding potential buyers or partners who will be interested in our product and the mission behind our business. We intend to bring in buyers or partners who could help accelerate the growth of the business. Depending on the buyer, our plan may include selling the business, merging with a corporate partner or a private investor, or passing the business along to a family member or an employee.

Our exit strategy also includes establishing a solid network we can rely on for advice and guidance. The exit strategy should also be revisited over time to ensure it remains in line with changes in the industry and the goals of the business.

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Oil Palm Cultivation (Palm Oil) Guide

Table of contents, oil palm cultivation guide:.

Introduction of Oil Palms: – Oil palm crop is one of the highest oil (palm oil) yielding crops among the all perennial crops. Oil palm tree produces edible palm-oil as well as palm kernel-oil. This oil palm is considered as golden palm due to its high yielding capacity. The Oil palm tree belongs to the family of “Arecaceae” and genus of “Elaeis”. In India, oil palm crop provides the excellent substitute of importing the oil. In India, oil palm is cultivated in more than 15 states by covering about 50,000 hectares under irrigated conditions and this crop also cultivated under rain fed conditions.

Advantages of Oil Palm Cultivation :- The following are the advantages and benefits of the oil palm cultivation.

• Oil palm yields highest edible oil among the other oil crops. The yield of 4 to 5 tonnes/ha can be expected.
• Oil palm crop is a hardy crop and low pest and disease incidence.
• Farmers can get extra income by intercropping in pre-bearing period of oil palms.
• There is no risk of theft and provides local employment.
• This crop assures monthly income and good market price throughout the year.
• Farmers can expect high returns which results in uplift of economic status.
• Palm oil substitutes import of edible oil by saving valuable foreign exchange.

Major Oil Palm Production States in India:-  Andhra Pradesh, Karnataka, Assam, Kerala, Gujarat, Goa, TamilNadu, Maharashtra, Tripura, West Bengal and some areas of Andaman.

Varieties of Oil Palm in India:- There are 3 major varieties of oil palms available.

• Tenera: This variety is ruling hybrid type and basically it is a cross of shell-less Pisifera (female) and thick-shelled Dura (male). This variety is thin shelled and cultivated across the globe.
• Dura: This variety is not commercially cultivated and it has thick shell of 2 to 8 mm.
• Pisifera: This is a shell less fruit bearing variety.

Climate Requirement for Oil Palm Cultivation:- Oil palm is a humid tropical crop and thrives best in the areas where temperature ranges from 22°C to 24°C (minimum) and 20°C to 33°C (maximum). Oil palms require at least 5 to 6 hours of bright sunshine per day and 80% of humidity for optimum growth. This crop requires annual evenly distributed rainfall of 2500 to 4000 mm or 150 to 150 mm monthly. As Indian climate is not suitable for evenly distribution of the rain, farmers are advised to go for assured irrigated conditions for oil palm cultivation.

Soil Requirement for Oil Palm Cultivation:-  Generally, oil palms can be grown on wide range of soils. However, they thrive best in well- drained deep loamy moist and alluvial soils rich in organic matter. These trees require at least 1 meter soil depth. Farmers should avoid highly saline, highly alkaline, coastal sandy and water stagnation soils.

Propagation in Oil Palm Cultivation:- The Propagation in oil palm cultivation is mainly  by seeds and seeds are extracted from fruits using depericarper. Pre-heating of seeds is required for 75 days at 40°C temperature due to their high dormancy. Thereafter, seeds should be soaked in running water and make them to cool down for 4 to 5 days. The seeds start germinating if 10 to 12 days and once germinated, sprouts should be transplanted to poly bags.

In nursery raising, the single stage poly bag system is a very popular propagation method and in this process, a poly bag size 40 35 should be filled with top soil, sand and well rotten manure. Then sprouts should be placed at a depth of 2.5 cm in the center of the poly bag. Regular watering and mulching should be carried for proper growth of seedlings. Use recommended NPK in nursery until they are transferred to the main filed.

Land Preparation, Spacing and Planting in Oil Palm Cultivation:-  Land should be made weed free and couple of ploughings should be given to get the soil fine tilth stage. Supplement the field with good organic matter to make the soil rich field. The best season for oil palm planting is from June to December. However, crops grown during summer should be provided with sufficient irrigation, mulching and growing cover crops in the tree basin is preferred to avoid hot winds in summer season. Healthy Seedling of 12 to 15 months age old with at least 1 meter height and 12 to 13 functional leaves are recommended in the oil palm tree cultivation. In triangular planting method, with a spacing of 9 meter x 9 meter x 9 meters, 143 to 145 oil palm plants can be accommodated in 1 hectare land. Planting should be done in the pits with size of 60 cm x 60 cm x 60 cm.

Mix the soil with 400 grams of single super phosphate and 50 grams of  phorate and apply at base of the pit as soon as planting is done. Do not forget giving irrigation immediately after the fertilizers applied at the base of the pit.

Intercropping in Oil Palm Cultivation:- Oil palms are a wide spaced perennial trees and inter space can be utilized for intercropping during initial 3 year period. Thereafter, shade loving crops can be grown. The care should be taken with inter-crops so that it will not compete with oil palms in terms of water, light and nutrients. The most suitable inter-crops during initial 3 year period are any vegetables, flowers, chillies, banana, tobacco, ginger, turmeric, pineapple. As part of the inter-crop process, should not cut the oil palm fronds or tie oil palm fronds close to the stem. Ploughing close to palm base should be avoided as it may cut the palm roots. For better yield maximum number of green leaves should be retained.

Irrigation in Oil Palm Cultivation:-  Oil palm crop requires sufficient irrigation as its growth rate is faster and produces high yield and biomass. Farmers are advised not to grow this crop in the regions where assured and sufficient irrigation is not available. Each growing plant requires about 200 liters of water per day. Older plants require little bit more in hot summer season.

• Drip irrigation or Micro sprinklers: This system can be adopted in the undulated terrain land,if the water is a main constraint. In case of drip irrigation method, each palm requires 4 dippers at the base. With 4 dippers ejecting 32 liters of water for five hours per day is enough to cover the 160 liter requirement per day/palm. In case of micro sprinklers (180° or 360 °), each on either side of the palm can be installed. In case of adopting these irrigation methods, check the drippers or sprinklers regularly for proper discharge. Practice mulching to retain the moisture at the base.
• Basin Method of Irrigation: This can be practiced when there is a abundant irrigation water is available. In this case, irrigation channels should be prepared to connect the individual palms separately by sub-channel .Usually required water should be given at 4 to 5 days interval. In case of heavy soils, irrigation interval would be longer and in the lighter soils, frequent irrigation with less water quality should be provided.

Mulching in Oil Palm Cultivation:- Mulching can be carried out to conserve the soil moisture and control the weed growth. Mulching can be done with dried leaves, coconut husk, male flowers and empty bunches.

Pollination in Oil Palm Cultivation:- The oil palm is a highly cross-pollinated crop in which the insects and wind assist pollination. However, wind pollination is not sufficient and the insects like “Elaeidobius kamerunicus” assists in good fruit set and effective pollination. This weevil should be released after two and half year of planting and in case of low vigour and girth plantation, releasing the weevils after three years is advisable.

Weed Control in Oil Palm Cultivation:- Regular manual weeding or chemical weeding can be carried out in oil palm cultivation. However, chemical weeding should be done only with recommended herbicides. For effective control of weeds, Glyphosate of 700-750 ml/ha/year or 17 ml/basin should be applied. By spraying herbicide mixtures of Paraquat with Atrazine, Diuron and Monuron on ground can effectively control the weeds and this operation should be carried out twice a year.

Flowering and Ablation in Oil Palm Cultivation:- Oil palm trees start flowering in 14 to 18 months after planting the crop. Oil palm tree produces both male and female flowers separately on the same palm tree.

The process of removing male and female flowers in early stages of oil palm plantation is called “ablation”. Ablation is required in oil palm cultivation for development of stem girth, vigour and string root system. Flowers should be removed manually or with recommended tool as soon as inflorescences appear on the oil palm tree. This process can be extended up to 2 to 3 years depending on the tree vigour and growth.

Basin Management in Oil Palm Cultivation:- As part of the basin management practice in the oil palm cultivation, basins of 1 meter radius, second year 2 meter radius, and the third year 3 meter radius should be made by removing the soil inside so that soil accumulation can be prevented in the collar region of the palm. For healthy roots, basins should be weed free and clean.

Manures and Fertilizers in Oil Palm Cultivation:-  Oil palms require a balanced and sufficient supply of micro, macro and secondary nutrients for high production of palm oil. In oil palm cultivation, fertilizers should be applied at every 3 months interval. Starting from the June or July, 4 equal split doses of fertilizer should be applied at 3 months interval. In case of newly planted trees, first dose of fertilizers should be applied after 3 months of planting. Farm yard manure (FMY) of 75 to 100 kg or 90 to 100 kg of green manure and 5 kg neem cake should be added per each oil palm tree along with 2nd dose of fertilizers. These fertilizers should be applied in the soil with the help of field fork at least 40 to 50 cm away from the palm base. Do not forget watering the palm trees after fertilization.

The annual fertilization chart in the oil palm cultivation is given below.

Pests and Diseases in Oil Palm Cultivation:- The following are the common pests and diseases are found in oil palm cultivation: Pestalotiopsis leaf spot, Ganoderma butt rot, Bacterial bud rot, Oil palm wilt, Rhinoceros beetle, Mealy bugs. Appropriate control measures should be taken care for these pests and diseases by contacting nearest agriculture department.

Harvesting in Oil Palm Cultivation:- The oil palms will be ready for harvesting in 2.5 to 3 years after the plantation in the main field. Determining harvesting time is very important in oil palm cultivation as it greatly impacts the quality and quantity of oil. Harvesting can be done when the fruits on palm turn into yellowish – orange colour and 5 to 8 fruits drop on their own. The final check would be when pressing the fruits hard with finger, orange coloured oil should extrude from the palm fruits.

Harvesting takes place throughout the year and generally done in 10 to 14 days interval with the help of sharp knife or sickle. A stalk length of 5 cm should be left while harvesting the fruit bunches.

Yield in Oil Palm Cultivation:- Any crop yield depends mainly on the soil type, variety, climatic conditions and farm management practices.

• During initial period from 4 to 8 years : 10 to 12 tonnes/ha.
• After 8 th year: 18 to 20 tonnes/ha.

For Sheep or Goat Farming Information : Read Here.

33 COMMENTS

Very great job. Useful. Thanks

Thanks for your comment. Let us all help the farming sector and make a farmer as king.

Hi sir this is charles from Loyola college from Chennai I want oil palm seed varieties for my PhD work please can u help me

Dear Sir, I have 3 hectares (7.5 Acres) well drained field, out of which I am interested to cultivate 1 hectares (2.6 Acres) Palm Trees. The field has no irrigation facilities. Please guide me.

Thank you for the very useful information on oil palm farming.

I am from agra, uttar pradesh. I have 5 acre irrigated land located on highway. Can I grow plam oil on this land.temperature in winter go upto 5 and summer it is upto 46. What is the challenge for growing palm oil trees.

Hi Jagadish Reddy garu, i have some land in Andhra pradesh and would like to discuss with you if its suitable for pam oil cultivation. could you please provide your contact info if you like to help us and guide us on this?

I am chandrakant from karnataka I have 22 acers dry land with black soil Could you please provide your contact information..

I am Destiny Abraham from Nigeria, I really want to start up a palm oil production. I need a guide on how to cultivate the palm seedlings. Thanks

Dear sir, I am Emmanuel from Nigeria. I have oil palm farm of about 3 hacre of land. The farm is about 18years old, but the yield is very low. What should I do to improve it’s yeild?

Apply recommended fertiliser to the trees every year.

hii sir i want to start up palm oil business , please suggest us …..

Hii Emmanuel onyeose ,I want purchase palm in tonnes can you provide us .

Dear sir I have 5.15 acres of land of red sandy soil with Irrigation facilities. Can I plant oil palm plants?

Sir I have nine acrs of dry land with fence around and bore pump with 2.5 inch water delivery . Can I take up oil Pom cultivation. I need giudence including cost and suggestions

Hi I have palm oil plantation in 10 hectares of land . My trees are 15 years old. I need to know if I can till my soil .

You cannot till the soil at this stage of the palm as to avoid damaging the feeder root of the oilpalm

Hii feroz i want raw palm can you provide us ,.

Hello @Destiny Abraham, I’m also a Nigerian who has always been interested in oil palm farming too. I’m new to this and I’m looking up to link with someone locally who can put me through or if we can share ideas from different articles read to attain a maximum yield. Best regards, Adeniyi.

Visit JB Farms in Odogbolu. They have 2000ha of oilpalm plantation. I visited them when I wanted to start mine

I want palm oil seeds for plantig

Please I need information on setting up an oil oak plantation in Nigeria.

Can u plz tell me the costing from germenating oil seed to ready to planting plants. (Including all the labour charge, soil , polythene, etc)

Good Morning Sir,l want to start this oil business,and l don’t know anything about it,what do l do sir?

Hai sir these is rajendar from hnk iwant to do oil farming how want to buy plants plz give me suggutations how to form

hello sir iiI WANT TO START BUSSINESS IN PALM OIL , IDONT HAVE ANY EXPERIENCE IN NIGERIA, I HAVE TEN ACRES OF LAND IN NIGERIA CAN YOU DIRECT ME TO WHERE I CAN BE EDUCATED AND GUIDE.

Hi, Sir, can oil palms grows around 1200 feet elevation? I am in the Caribbean, Haiti to be precise. Not much water. Thanks

Hello experts I am Barnabas from Tanzania. I have 35 hectares of land and I am preparing to cultivate oil palm trees. I need knowledge/training on this palm tree farming. Please help me

Message me to guide you on the Palm tree production.

How can I order palm plants?

What’s your location pls?

I have 20 bighas land please provide me some plants

Thank you sir, we owe you for ever

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How To Write a Business Plan for Palm Oil Processing in 9 Steps: Checklist

By henry sheykin, resources on palm oil processing.

• Financial Model
• Business Plan
• Value Proposition
• One-Page Business Plan
• SWOT Analysis
• Business Model
• Marketing Plan

Are you considering starting a business in the palm oil processing industry? With the increasing demand for palm oil in various industries, it's no surprise that this sector is experiencing rapid growth. According to industry reports, the global palm oil market was valued at $65.73 billion in 2020 and is projected to reach $92.84 billion by 2028, growing at a CAGR of 4.3% . To ensure the success of your venture, it's crucial to have a well-thought-out business plan in place. In this blog post, we'll walk you through the essential steps to create a comprehensive business plan for your palm oil processing business.

Conduct market research: Before diving into the palm oil processing industry, it's essential to understand the market dynamics, including trends, demand, and potential growth opportunities. Analyze consumer preferences, market size, and geographical considerations to identify the right target market for your business.

Identify target customers: Determine the specific industries or target segments that you will cater to with your palm oil products. This could include food, cosmetic, or biofuel companies. Understanding your target customers' needs and preferences will help you tailor your products and marketing strategies accordingly.

Analyze competitors: Research and analyze existing palm oil processing companies in the market to identify their strengths, weaknesses, and market positioning. This will enable you to differentiate your business and identify opportunities to gain a competitive edge.

Define unique selling proposition: Determine your unique selling proposition (USP) or what sets your palm oil processing business apart from competitors. It could be your commitment to sustainability, environmentally friendly practices, or superior product quality. Highlighting your USP will help attract customers who prioritize ethical sourcing and high-quality products.

Determine start-up costs and financial requirements: Evaluate the financial aspects of your business, including start-up costs, operating expenses, and potential revenue streams. This will help you determine the feasibility of your venture, secure funding, and set realistic financial goals for your business.

Create a detailed business strategy: Develop a comprehensive business strategy that outlines your business goals, target market, marketing and sales strategies, operational plans, and key performance indicators. A well-defined business strategy will serve as a roadmap for your palm oil processing business and guide your decision-making processes.

Develop a marketing plan: Create a marketing plan to promote your palm oil products to your target customers. Identify the most effective marketing channels, such as online platforms, trade shows, or partnerships, to reach and engage your audience. Consider leveraging digital marketing strategies to expand your business's reach and visibility.

Identify potential suppliers or sources for raw materials: Establish relationships with reliable suppliers or sources for raw materials, such as palm oil plantations. Ensure that they meet your sustainability and quality criteria to maintain a steady supply of raw materials for production.

Evaluate potential risks and challenges: Identify potential risks and challenges specific to the palm oil processing industry, such as fluctuating prices, environmental regulations, or market volatility. Develop contingency plans and risk mitigation strategies to protect your business interests and ensure continuity.

By following these nine essential steps, you'll be well on your way to creating a comprehensive business plan for your palm oil processing business. With the growing demand for palm oil and consumers' increasing focus on ethical sourcing, now is the perfect time to embark on this profitable venture. Best of luck!

Conduct Market Research

To ensure the success of your palm oil processing business, it is essential to conduct thorough market research . This step involves gathering information about the palm oil industry, consumer demand, and key trends in the market.

Market research is crucial for several reasons. Firstly, it helps you gain a comprehensive understanding of the palm oil industry, including its current state and projected growth. By analyzing industry reports, trade journals, and government publications, you can stay updated on industry regulations, market trends, and emerging opportunities.

Secondly, market research allows you to identify potential customers and their specific needs. By studying consumer preferences, purchasing behavior, and market segments, you can tailor your palm oil products to meet customer demands and gain a competitive edge in the market.

Additionally, conducting market research helps you analyze your competitors and identify their strengths, weaknesses, and market positioning. This information enables you to develop effective strategies to differentiate your palm oil processing business and offer unique value to your customers.

Tips for Conducting Market Research:

• Utilize online market research tools and databases to access industry reports and data.
• Attend trade shows, conferences, and industry events to network with industry experts and gain insights.
• Collect feedback from potential customers through surveys, interviews, or focus groups to understand their needs and preferences.
• Stay updated on environmental regulations and sustainability initiatives to align your business with evolving consumer values.

By conducting thorough market research, you can gain valuable insights that will inform your business strategy and help you make informed decisions throughout the palm oil processing journey.

Identify Target Customers

Identifying your target customers is a crucial step in creating a successful business plan for palm oil processing. Understanding who your potential customers are will help you tailor your products and marketing strategies to meet their needs and preferences. Here are some important considerations to keep in mind:

• Industry Segmentation: Determine which industries will be your primary customers for palm oil, such as food, cosmetic, or biofuel companies. Each industry may have different requirements and preferences, so it is important to understand their specific demands.
• Geographic Focus: Consider whether your target customers will be located locally, nationally, or globally. This will help you identify the scale of your operations and distribution channels needed to reach your target market.
• Consumer Preferences: Research and understand the preferences of consumers within your industry segments. Are they looking for sustainable and environmentally friendly products? Do they prioritize ethically sourced ingredients? Tailor your offerings to align with these preferences to attract and retain customers.
• Market Size and Growth: Evaluate the potential size and growth rate of your target customer base. This information will help you estimate the demand for palm oil and plan your production and sales volumes accordingly.
• Conduct surveys and interviews with potential customers to gather insights into their needs and preferences.
• Stay updated on industry trends and developments to anticipate changes in customer demands.
• Consider partnering with industry experts or consultants who have knowledge and experience in your target market.

By identifying your target customers and gaining a deep understanding of their needs, preferences, and market dynamics, you will be better equipped to develop a successful business plan and effectively position your palm oil processing venture in the industry.

Analyze Competitors

Analyzing competitors is a crucial step in developing a successful business plan for palm oil processing. Understanding the market landscape and identifying your direct and indirect competitors will provide valuable insights into the industry, help you differentiate your business, and ultimately attract customers.

When conducting competitor analysis, it is important to gather relevant information about each competitor's:

• Product offerings and quality: Assess the range of palm oil products offered by competitors and determine their quality. This will help you identify any gaps in the market that your business can fill with unique offerings.
• Pricing strategy: Examine the pricing strategies of your competitors to determine how your pricing structure compares. This will help you position your products competitively in the market.
• Production capacity: Analyze the production capacity and efficiency of competitors' processing facilities. Understanding their capabilities will enable you to identify potential areas for improvement in your own operations.
• Distribution channels: Identify the distribution channels utilized by your competitors to reach their customers. This will give you an idea of how to effectively distribute your palm oil products to target markets.
• Market share and customer base: Determine the market share held by your competitors and identify their primary target customers. This information will help you tailor your marketing efforts to attract and retain customers within your niche.
• Regularly monitor your competitors' activities, such as new product launches or marketing campaigns, to stay updated on industry trends and adapt your strategies accordingly.
• Attend industry trade shows and events to network with competitors and gain firsthand knowledge about their operations.
• Consider conducting a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis to further evaluate your competitors and highlight areas where your business can excel.

Define Unique Selling Proposition

Defining your unique selling proposition (USP) is crucial for establishing your business's competitive advantage in the palm oil processing industry. Your USP is what sets you apart from your competitors and gives customers a compelling reason to choose your products or services. Here are some important steps to help you define your USP:

• Identify your strengths: Start by identifying the unique strengths and capabilities of your business. This could be your advanced production technology, eco-friendly practices, or expertise in the palm oil industry.
• Understand customer needs: Research and analyze the needs and preferences of your target customers. Determine what factors are important to them when selecting palm oil products. This will help you align your USP with their requirements.
• Highlight your differentiators: Determine what sets your business apart from competitors. This could be your commitment to sustainability, superior quality control processes, or partnerships with local communities. Focus on your strengths that resonate with your target customers.
• Communicate your USP: Once you have defined your USP, ensure that it is clearly communicated in your marketing messages, brand identity, and overall business strategy. Consistently highlight your unique qualities to establish a strong positioning in the market.
• Conduct surveys or interviews with potential customers to gather feedback on what factors they consider important when choosing palm oil products.
• Stay updated on industry trends and consumer preferences to identify areas where you can differentiate your business.
• Showcase your USP through testimonials, certifications, or awards to build trust and credibility with customers.
• Regularly evaluate and refine your USP to stay ahead of competitors and adapt to changing market dynamics.

Determine Start-Up Costs And Financial Requirements

Before starting a palm oil processing business, it is crucial to determine the start-up costs and financial requirements involved. This step is vital in ensuring that you have a clear understanding of the initial investment needed to launch and sustain your business. By accurately assessing the financial aspects of your venture, you can make informed decisions and avoid financial hurdles in the future.

To determine the start-up costs, make a comprehensive list of all the necessary expenses associated with setting up the palm oil processing business . This may include the cost of acquiring and leasing land for the plantations and processing facilities, purchasing machinery and equipment, acquiring necessary permits and licenses, and hiring skilled labor. Consider getting quotes from suppliers and contractors to estimate the exact costs involved.

Additionally, do not overlook the recurring expenses that will be incurred on a regular basis after the set-up phase. These may include overhead costs such as utility bills, employee salaries, maintenance expenses, and marketing expenses. By considering these ongoing costs, you can accurately gauge the financial requirements of your business in the long run.

When determining the financial requirements for your palm oil processing business, it is also important to assess the potential revenue streams . Research the market demand for palm oil and analyze the pricing models followed by competitors. Estimate the revenue you can generate by selling palm oil to various industries such as food, cosmetic, and biofuel companies.

• Consult with industry experts or financial advisors to get a better understanding of the start-up costs and financial requirements specific to the palm oil processing industry.
• Create a detailed financial projection by forecasting both the expenses and potential revenue for at least the first year of operation.
• Consider exploring funding options such as loans, investors, or government grants to secure the necessary capital for your business.

By thoroughly determining the start-up costs and financial requirements, you can develop a realistic and well-structured business plan for your palm oil processing venture. This will not only provide you with a solid foundation but also demonstrate your preparedness and professionalism to potential stakeholders and investors.

Create A Detailed Business Strategy

Creating a detailed business strategy is crucial for the success of your palm oil processing business. This strategic plan will serve as a roadmap, outlining your goals and the steps you need to take to achieve them. It will help you make informed decisions, allocate resources effectively, and stay focused on your objectives.

To create a comprehensive business strategy, consider the following key components:

• Market analysis: Conduct a thorough analysis of the palm oil industry and its potential for growth. Identify trends, market size, and any factors that may impact the demand for palm oil.
• Business goals: Clearly define your short-term and long-term goals. These could include objectives such as increasing production capacity, expanding your customer base, or improving sustainability practices.
• Operational plan: Outline the day-to-day operations of your palm oil processing business. This includes factors such as production processes, quality control measures, supply chain management, and hiring and training employees.
• Financial plan: Develop a detailed financial plan, including projected revenue, expenses, and profitability. Consider factors such as start-up costs, ongoing expenses, pricing strategies, and potential sources of investment or financing.
• Marketing plan: Lay out your marketing strategies to promote your palm oil products to target customers. This may include online marketing, partnerships with distributors, trade shows, and advertising campaigns.
• Risk assessment: Identify potential risks and challenges that may arise in the palm oil processing industry. Assess their potential impact on your business and develop contingency plans to mitigate these risks.
• Timeline: Create a timeline that outlines the key milestones and deadlines for your business. This will help you track progress and stay on schedule.
• Be realistic in setting your goals and align them with your available resources.
• Regularly review and update your business strategy to adapt to changing market conditions.
• Seek input and feedback from industry experts or experienced professionals.
• Consider potential challenges such as government regulations or fluctuations in palm oil prices.

A detailed business strategy will provide a clear roadmap for your palm oil processing business, helping you make informed decisions and navigate the challenges of the industry. Take the time to carefully develop this strategy to set yourself up for success.

Develop A Marketing Plan

Developing a solid marketing plan is essential for the success of your palm oil processing business. It will help you identify your target market, craft effective promotional strategies, and ultimately drive sales. Here are some important steps to consider when developing your marketing plan:

• Identify your target market: Understanding your target customers is crucial for creating effective marketing strategies. Determine the industries and companies that would be interested in purchasing palm oil, such as food, cosmetic, and biofuel companies. Additionally, consider consumer preferences and trends to tailor your marketing efforts.
• Analyze market trends: Stay updated on the latest market trends and consumer preferences in the palm oil industry. This will help you identify opportunities for growth and adapt your marketing strategies accordingly.
• Define your unique selling proposition: Differentiate your palm oil processing business from competitors by identifying your unique selling proposition. This could be your commitment to sustainability, environmentally friendly practices, or high-quality products. Highlight these unique aspects in your marketing materials to attract customers who prioritize ethical sourcing.
• Choose the right marketing channels: Determine the most effective marketing channels to reach your target customers. This could include online platforms, industry exhibitions, trade publications, or direct sales efforts. Utilize a mix of channels to maximize your reach and generate leads.
• Create compelling marketing materials: Develop marketing materials, such as brochures, product catalogs, and a professional website, that highlight the benefits of your palm oil products and services. Ensure that your messaging is clear, concise, and visually appealing to capture the attention of potential customers.
• Implement advertising and promotional strategies: Consider utilizing advertising and promotional tactics to raise awareness and generate interest in your palm oil products. This could involve online advertisements, targeted email campaigns, social media marketing, or industry events.
• Collaborate with influencers or industry experts to endorse your palm oil products and increase brand visibility.
• Offer samples or trials to potential customers to showcase the quality of your palm oil and encourage them to make a purchase.
• Use customer feedback and testimonials to build trust and credibility in your marketing materials.
• Monitor and analyze the results of your marketing efforts to identify areas for improvement and refine your strategies accordingly.

By developing a comprehensive marketing plan, you can effectively promote your palm oil processing business, attract the right customers, and drive sales. Remember to continuously assess and adapt your marketing strategies to stay ahead in this competitive industry.

Identify Potential Suppliers Or Sources For Raw Materials

When starting a palm oil processing business, one crucial step is to identify potential suppliers or sources for raw materials. In the case of a vertically integrated supply chain, where the company owns the plantations, the primary source of raw materials would be the palm oil harvested from these plantations.

However, it is essential to consider alternative suppliers or sources to ensure a steady supply of raw materials. This is especially important in cases of unexpected events such as crop failures or natural disasters that may affect the company's plantations.

• Consider establishing partnerships or contracts with other palm oil plantations in different geographical locations. This diversification can help mitigate potential risks and ensure a consistent supply of raw materials.
• Explore the option of purchasing palm oil from local farmers or cooperatives. This not only supports the local community but also provides an additional source of raw materials.
• Research international palm oil suppliers to evaluate the feasibility of importing raw materials. This can be a cost-effective solution if local suppliers are unable to meet the business's demand.

Tips for Identifying Potential Suppliers or Sources for Raw Materials:

• Attend industry conferences, trade shows, or exhibitions to connect with potential suppliers.
• Utilize online platforms and directories specific to the palm oil industry to find a wide range of suppliers.
• Consider the sustainability and ethical practices of potential suppliers to align with the business's focus on sustainability.
• Request samples and conduct thorough quality testing before entering into long-term contracts with suppliers.
• Establish clear communication channels and build strong relationships with suppliers to ensure effective and reliable collaboration.

By identifying potential suppliers or sources for raw materials, a palm oil processing business can ensure a consistent and reliable supply chain. This step is crucial for maintaining production efficiency, meeting customer demand, and ultimately, achieving long-term success.

Evaluate Potential Risks And Challenges

While creating a business plan for a palm oil processing venture, it is crucial to assess the potential risks and challenges that may arise. By identifying these factors in advance, you can develop effective strategies to minimize their impact and ensure the smooth operation of your business.

1. Market Volatility: The price of palm oil can be volatile due to factors such as changes in demand, supply disruptions, or fluctuations in global commodity markets. To mitigate this risk, stay updated on market trends, diversify your customer base, and consider hedging strategies.

2. Regulatory Compliance: The palm oil industry is subject to various regulations and standards related to environmental sustainability, labor practices, and quality control. Familiarize yourself with the legal requirements and ensure that your operations adhere to them. Non-compliance can result in penalties and reputational damage.

• Stay informed about changes in regulations and adapt your practices accordingly.
• Consider obtaining certifications or accreditations to demonstrate compliance with sustainability and quality standards.
• Invest in employee training to ensure they are aware of and follow proper procedures.

3. Weather and Climate Risks: Palm oil production can be affected by weather events such as droughts, floods, or diseases. These factors can impact crop yields and lead to interruptions in the supply chain. Implementing effective risk management strategies, such as crop insurance or diversifying plantation locations, can help mitigate these risks.

4. Price Fluctuations for Raw Materials: As a vertically integrated business, fluctuations in the price of raw materials, such as palm fruits, can directly impact your profitability. Explore long-term supply contracts, engage in hedging strategies, or consider alternative sources to manage this risk.

5. Market Competition: The palm oil industry is competitive, with numerous players in the market. Analyze your competitors' strengths and weaknesses to identify opportunities for differentiation. Develop a unique selling proposition (USP) and focus on customer satisfaction to gain a competitive edge.

6. Environmental and Social Activism: Palm oil production has faced criticism due to concerns related to deforestation, biodiversity loss, and human rights issues. Embracing sustainable practices, engaging in responsible sourcing, and being transparent about your efforts can help mitigate the impact of such activism.

7. Technological Advancements: Keeping pace with technological advancements is essential for efficient and cost-effective palm oil processing. Fully embrace automation, digitalization, and innovative technologies to enhance productivity and remain competitive in the industry.

• Regularly invest in research and development to stay informed about industry innovations.
• Monitor technological trends and implement relevant tools or systems that can streamline your operations.

Evaluating and addressing potential risks and challenges in your business plan demonstrates your preparedness and commitment to success. By proactively managing these factors, you can position your palm oil processing venture for sustainable growth and profitability.

Conclusion:

In conclusion, writing a business plan for palm oil processing requires careful consideration and thorough research. By following the nine steps outlined in this checklist, entrepreneurs can effectively analyze the market, define a unique selling proposition, and develop a detailed strategy for success. It is important to identify target customers, analyze competitors, and establish a solid financial plan to ensure the profitability of the venture. Additionally, focusing on sustainability and ethical sourcing practices can differentiate the business and attract environmentally conscious consumers. With a well-planned business plan, entrepreneurs can enter the palm oil processing industry with confidence and maximize their chances of success.

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Oil palm in the 2020s and beyond: challenges and solutions

• Denis J. Murphy 1 ,
• Kirstie Goggin 1 , 2 &
• R. Russell M. Paterson 3 , 4  

CABI Agriculture and Bioscience volume  2 , Article number:  39 ( 2021 ) Cite this article

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Oil palm,  Elaeis guineensis , is by far the most important global oil crop, supplying about 40% of all traded vegetable oil. Palm oils are key dietary components consumed daily by over three billion people, mostly in Asia, and also have a wide range of important non-food uses including in cleansing and sanitizing products.

Oil palm is a perennial crop with a > 25-year life cycle and an exceptionally low land footprint compared to annual oilseed crops. Oil palm crops globally produce an annual 81 million tonnes (Mt) of oil from about 19 million hectares (Mha). In contrast, the second and third largest vegetable oil crops, soybean and rapeseed, yield a combined 84 Mt oil but occupy over 163 Mha of increasingly scarce arable land. The oil palm crop system faces many challenges in the 2020s. These include increasing incidence of new and existing pests/diseases and a general lack of climatic resilience, especially relating to elevated temperatures and increasingly erratic rainfall patterns, plus downstream issues relating to supply chains and consumer sentiment. This review surveys the oil palm sector in the 2020s and beyond, its major challenges and options for future progress.

Conclusions

Oil palm crop production faces many future challenges, including emerging threats from climate change and pests and diseases. The inevitability of climate change requires more effective international collaboration for its reduction. New breeding and management approaches are providing the promise of improvements, such as much higher yielding varieties, improved oil profiles, enhanced disease resistance, and greater climatic resilience.

Introduction

The palms, or Arecaceae, are a family of stem-less, tree-like monocot plants that are highly significant to humans and wider biodiversity, especially in the tropics (Cosiaux et al. 2018 ). The African oil palm, Elaeis guineensis , is native to West Africa and in terms of agriculture, it is perhaps the world’s most important palm species. Oil palm fruits are available year-round and have served as semi-wild food resources in traditional societies for > 7000 years. In its regions of origin the oil palm plant has great significance to local people and for wider biodiversity (Cosiaux et al. 2018 ; Reddy et al. 2019 ; Okolo et al. 2019 ). Cultivation of oil palm as a crop was originally an informal process mainly confined to the West/Central African coastal belt between Guinea/Liberia and Northern Angola (Corley and Tinker 2015 ). Globally, the best production levels are achieved in high rainfall areas in equatorial regions between 7° N and 7° S. During the nineteenth century, oil palm seeds were transported to the Dutch East Indies (modern Indonesia), and to the Malay States (modern Malaysia), as part of colonial ventures to grow newly introduced cash crops in the region. During the twentieth century, more systematic oil palm cultivation on plantations gradually became established in the Malay States. In terms of large-scale commercial production, however, oil palm is a relatively recent crop that only emerged into global prominence later in the twentieth century, with an almost linear rise from 1990 to the early 2000s, followed by a plateau after 2007 (Malaysian Palm Oil Production by Year 2020 ). This was largely due to government initiatives in the 1970s and 80 s aimed at improving the agriculture and economy of the newly independent nation of Malaysia (Corley and Tinker 2015 ; Murphy 2014 ). The later rise of the oil palm industry in Indonesia occurred during the twenty-first century when there was a > 5-fold increase in oil production from 8.3 Mt in 2000 to 43.5 Mt in 2020.

Today, oil palm is crucial to the economies of many countries, especially Indonesia and Malaysia, from which large quantities of its products are exported in the form of oil, meal and other derivatives (Murphy 2019 ). More widely, oil palm is now cultivated in plantations across the humid tropics of Asia, Africa and the Americas, from where its products are exported to global markets. However, despite its increasing cultivation on three widely separated continents, the vast majority of oil palm is still grown in the two adjacent South East (SE) Asian countries of Indonesia and Malaysia (Table 1 ) that generate about 85% of the entire global production (Murphy 2014 , 2015 , 2019 ; Statista 2020 ; Goggin and Murphy 2018 ). The major importing regions, collectively responsible for about 60% of total palm oil imports, are the Indian subcontinent (India, Pakistan, Bangladesh) with about 17 Mt, the EU-27 with 6.5 Mt, and China with 5 Mt (Statisa 2020 ).

There are two contrasting types of oil found in the two principal tissues of palm fruits, namely ‘palm oil’ and ‘palm kernel oil’ (Murphy 2019 ). Palm oil, extracted from the fleshy mesocarp tissue, is a deep orange-red, semi-solid fluid, whilst palm kernel oil is a white-yellow oil that is extracted mainly from the endosperm tissue of the kernel (seed). These two oils have very different fatty acid compositions (Table 2 ), which means they are used for different downstream applications in a range of industrial sectors (Goggin and Murphy 2018 ). In general, the relatively high saturated fat content of palm oil makes it particularly suitable for edible use as a solid vegetable fat (melting point ca. 35 °C). In contrast, palm kernel oil is a less dense product (melting point ca. 24 °C) that is mostly used for non-edible applications (Statisa 2020 ). A major use of palm kernel oil is as the key functional ingredient in many soaps, detergents and cosmetics. E. guineensis plants bear prolific numbers of oil-rich fruit bunches year-round, each containing between 1000–3000 individual fruits (Corley and Tinker 2015 ). Mesocarp-derived palm oil makes up about 89% the total fruit oil with the remaining 11% being derived from the seed or kernel. Because palm oil and palm kernel oil are extracted from fruits by different mechanical processes and have very different downstream uses, they enter separate supply chains immediately after extraction in mills.

In terms of annual production, the global oil palm industry is worth about US$ 60 billion, employing 6 million people directly plus an additional 11 million indirectly (Kadandale et al. 2019 ). Over 81.1 Mt of palm oils were produced globally in 2019–20, of which 72.3 Mt was mesocarp oil (hereafter referred to as ‘palm oil’) while 8.8 Mt was palm kernel oil (Statisa 2020 ). It is estimated that palm oil or palm kernel oil are present as ingredients in at least half of the products found in a typical supermarket. At least three billion people rely directly on palm oil as a regular part of their diet, and it is a staple cooking oil commonly used in African and Asian food preparation. As global populations increase, the demand for palm oil is likely to continue to rise. Estimates from various industry sources predict that between 93 and 156 Mt palm oil might be required by 2050 (Frost and Sullivan 2017 ; Harris et al. 2013 ; Pirker et al. 2016 ). However, these estimates do not consider the effect of climate change on production, which is likely to reduce the ability of the sector to meet these demands (Paterson 2020a , b , 2021a , b ) as discussed later.

In addition to its edible applications, the oil palm crop provides a wide range of non-food products that also include animal feeds. These feeds are derived from the seeds or kernels, which contain a protein-rich meal residue following oil extraction. Palm kernel meal is an often overlooked product of the crop, but is a useful livestock feedstuff that is exported globally. In 2019, about 7.6 Mt palm kernel meal was exported, almost exclusively (98%) from Indonesia and Malaysia (Indexmundi 2021 ). In order of importance, the major importing countries (75% of total 2019 imports) are the EU, New Zealand and Japan, where the meal is used in a variety of feed formulations, especially for ruminants such as cattle.

The image of oil palm has been adversely affected by detrimental environmental consequences of its cultivation, especially with respect to deforestation and haze creation (Paterson and Lima 2018 ). There is also great public concern about the plight of iconic species, and particularly the orangutan, in SE Asia. Some of the particular challenges currently faced by the industry include the following:

Greatly reduced demand for crop-derived biofuels, especially in Europe.

Serious production issues related to plantation management, labour shortages, replanting with improved crop varieties, mechanization etc.

Ongoing environmental and sustainability issues including deforestation, biodiversity loss and GHG emissions due to crop expansion.

Growing threats arising from climate change, including biotic factors, such as pests and disease, that could impact crop performance in unpredictable ways.

Increasingly serious supply chain and consumer issues including potential trade barriers and boycotts.

In all cases these issues will require attention by the industry during the rest of this decade and beyond.

Structure of the oil palm industry

Modern commercial oil palm cultivation began in Malaysia in 1917 (Basiron 2007 ) and over 88% of palm oil is still produced by Malaysia plus the neighbouring countries, Indonesia and Thailand (Statista 2020 ). From 2001 to 2016, the expansion of oil palm plantations was particularly marked in this region with a 2.5-fold increase in Malaysia and a 4.2-fold increase in Indonesia (Xu et al. 2020 ). Over the past decade, oil palm crops have also been grown increasingly outside SE Asia (Murphy 2019 ), as suitable land in Asia becomes scarce and the changing climate is less conducive to cultivation (Paterson 2021a , b ). For example, there is only an estimated 300,000 ha of available land for palm expansion remaining in Malaysia (Villela et al. 2014 ), with increasing government prohibitions for environmental reasons, on further encroachment onto forest and peatland in Indonesia (Jackson 2019 ). Continuing increases in global demand over the past five decades have meant that the cultivation of oil palm has been widely regarded by many tropical countries as a method to boost their economies (Arrieta et al. 2007 ; Ohimain and Izah 2014 ; Paterson et al. 2015 ).

In SE Asia, the primary regions for oil palm production in Indonesia are Sumatra and Kalimantan (Paterson et al. 2015 ; Suryantini and Wilandari 2018 ), while in Malaysia the peninsula was the historical centre, although considerable expansion has occurred more recently in Sabah and Sarawak. Due their climatic suitability, oil palm cultivation has also spread to other SE Asian countries, especially Thailand and Papua New Guinea, with Myanmar and the Philippines in the initial stages of development where the crop is important to the economies of each of these countries (Corley and Tinker 2015 ; Suryantini and Wilandari 2018 ; Pornsuriya et al. 2013 ; Somnuek et al. 2016 ; Woods 2015 ). Due to its profitability, there are also significant emerging oil palm industries in much of tropical Africa with Nigeria, Ghana, Ivory Coast, Cameroon, Sierra Leon, Benin, Angola, and DRC as the main producers (in that order) (Paterson 2021a ). However, in most cases African oil palm crops are mainly used for local consumption, with Cameroon and Ivory Coast as the only major palm oil exporters (Corley and Tinker 2015 ). Nigeria is the fifth highest producer globally, with an annual 1·0 Mt, although this is dwarfed by Indonesia with 42.5 Mt and Malaysia with 18.5 Mt (Statista 2020 ).

In the Americas, the first oil palm plantations were established in Honduras and Costa Rica and currently the largest industries are in Colombia and Ecuador, although Brazil is also expanding its production (Corley and Tinker 2015 ; Murphy 2019 ; Nahum et al. 2020 ). South and Central America are considered as favourable areas for oil palm development due to their theoretical ability to produce palm oil. There is well over 1.5 Mha of planted oil palm in Latin America with Brazil having the largest future potential, although currently the leading producer is Colombia with an annual 1.5 Mt. Although the environmental consequences of increasing oil palm cultivation require careful consideration (Murphy 2015 ; Paterson 2020a , b , 2021a ), these countries could potentially increase their market share in a sustainable manner, for example by only converting land currently used for pasture or illegal coca cultivation. This will be important as land in Malaysia and Indonesia becomes less available (Paterson and Lima 2018 ). However, there are also important climate change constraints for a truly sustainable future industry in the Americas, Africa, and SE Asia (Paterson 2021a , b , c , d ; Indexmundi 2021 ; Paterson et al. 2015 , 2017 ).

A recent study shows the global distribution of smallholder and industrial plantations at high resolution (Descals et al. 2020 ). Smallholders account for 30 to 40% of global land palm oil cultivation (Hambloch 2018 ; Euler et al. 2016 ). In SE Asia there are more than three million smallholders, nearly all of whom cultivate individual family-owned and managed plots of less than 50 ha and often as little as 1–2 ha. In Indonesia, which is the largest oil palm producing country, smallholder plots account for 40% of the total crop area, although they only produce 30% of total national output (Euler et al. 2017 ). However, although the larger commercial plantations tend to be more efficient in terms of oil yield and overall economics, smallholder units serve important social roles in providing income and employment to rural populations (Murphy 2015 ; Euler et al. 2016 ). Smallholder units are also more likely to supply palm oil for local consumption rather than for export. This is particularly true for parts of Indonesia and Africa where the crops can be regarded as key elements in local food security and economic wellbeing (Krishna et al. 2017 ; Kubitza et al. 2018 ). Interestingly, there is also evidence that smallholdings can have lower environmental impacts (Lee et al. 2014 ) and higher biodiversity levels than commercial plantations (Razak et al. 2020 ).

In contrast, commercial plantations tend to be part of large ventures that are often owned by multinational companies that can extend over tens of thousands of hectares, with the largest totalling about one million ha. In terms of global trade, palm oils from commercial plantations are by far the most important contributors. In some cases, the larger plantation companies also own or control many key downstream elements in palm oil supply chains. These include mills, refineries, shipping operations and the distribution networks to processors and retailers in export destinations.

In summary, oil palm cultivation is still highly concentrated in SE Asia, but the focus of future expansion is likely to be elsewhere in the humid tropics, especially in West Africa and northern regions of South America. Therefore, the oil palm industry is a hybrid of large scale, globally focussed, commercial farming and small scale production of a cash crop, often for local consumption. As discussed below, the industry must manage the effects of environmental factors, such as climate change and increased disease incidence on cropping systems, as well as changing consumer sentiments in export destinations.

The environmental context

Oil palm is widely considered as a problematic crop. This has been mainly due to the environmental and ecological impacts of some of the land conversions to oil palm plantations over the past two decades, especially in Indonesia. In many cases these have displaced pristine tropical habitats and affected iconic wildlife species, such as orangutan (May-Tobin et al. 2012 ; Gaveau et al. 2014 ). The EU is the second largest global importer of palm-based oils and this consumer-led demand has been one of the drivers of the expansion of recent oil palm cultivation. Since 2000, increased global demand for biofuels and other non-food products (mainly from Europe), and for food (mainly from India and China), were the major factors behind the conversion of land in SE Asia to oil palm cultivation. In Indonesia the area of oil palm cultivation more than trebled from 2.5 Mha to over 8 Mha between 2000 and 2014 (Indonesia: Palm oil expansion unaffected by Forest Moratorium 2013 ). In some cases this has led to significant habitat loss and reductions in biodiversity as complex ecosystems are replaced with simpler species-poor plantation systems, as well as concerns about increased GHG emissions as land is converted to oil palm (Dislich et al. 2017 ; Meijaard et al. 2020 ; Carlson et al. 2012 ; Barcelos et al. 2015 ).

Several studies have examined the potential impact of land use and climate change on biodiversity in Borneo, where a great deal of oil palm planting has occurred during the past decade (Scriven et al. 2015 ; Gaveau et al. 2016 ). Recommendations from these and other studies, include the need to establish nature reserves in upland areas where climate change will be less severe and also to improve connections between reserves and plantations via wildlife corridors (Scriven et al. 2019 ). One of the most controversial aspects of new palm cultivation in SE Asia is the use of tropical peatland, especially in Borneo. There are several ongoing studies of the impact of peatland conversion in terms of GHG emissions, and other environmental studies have been carried out in association with the major certification scheme that is run by the Roundtable on Sustainable Palm Oil (RSPO). Examples include the following articles: (Gunarso et al. 2013 ; Chase et al. 2012 ; Dalal and Shanmugam 2015 ; Tonks et al. 2017 ; Cook 2018 ).

As a result of such studies, RSPO insist that to gain certification, new plantings since November 2005, must not have replaced primary forest or any area required to maintain or enhance one or more High Conservation Values (HCV). An HCV assessment, including stakeholder consultation, must be conducted prior to any conversions and dates of land preparation and commencement must also be recorded. The HCV assessment process requires appropriate training and expertise, and must include consultation with local communities, particularly for identifying social HCVs. Development should actively seek to utilize previously cleared and/or degraded land. Plantation development should not put indirect pressure on forests through the use of all available agricultural land in an area. In order to improve the participation of smallholders, local certification schemes, such as the Malaysian Sustainable Palm Oil (MSPO) and Indonesian Sustainable Palm Oil (ISPO) initiatives, have been set up, although internationally traded palm oils are almost exclusively certified by RSPO.

Several studies suggest that limited oil palm expansion might be possible on already degraded land, without the need to convert mature tropical forests (Jackson 2019 ; Wicke et al. 2011 ), and that smallholdings may have lower environmental impacts than commercial plantations (Lee et al. 2014 ). Despite these caveats, there is considerable pressure for governments to impose much stricter controls, and even outright bans, on the conversion of tropical peatlands and non-degraded forest to oil palm. Although there have been encouraging statements along these lines from politicians in the two major producing countries, these remain largely aspirational at present and more effective action is required.

Pests and diseases

Oil palm crops are affected by several economically important pests and fungal pathogens, of which several of the most serious diseases will now be considered (Corley and Tinker 2015 ).

Fungal diseases

Basal Stem Rot (BSR) is caused by the fungus, Ganoderma boninense (Fig.  1 ), is a serious disease of oil palm, which can reduce yields by 50–80%. It has increased over recent decades due to its spread from infection foci at a greater rate, following repeated cycles of crop planting on infested sites. In Malaysia, BSR is often reported in young plants and seedlings, whereas previously only mature oil palms were infected (Paterson 2019a , 2020c ). By the time an oil palm stand is halfway through its ca. 25-year economic lifespan, BSR can kill 80% of plants. Furthermore, expansion of industrial oil palm cultivation began early in Sumatra, where G. boninense adaptation to the environment is most likely to occur. This region contains the highest levels of disease, implying an association between the duration of oil palm cultivation and higher disease concentrations. BSR is found increasingly in inland peninsular Malaysia and Sabah, and in some cases is at high levels in places where it has not previously been detected. BSR was also reported at high levels in oil palm grown on inland lateritic soils and peat soils, irrespective of cropping history, whereas before such soils had been disease-free. By the time of replanting (every 25 years), 40–50% of palms were lost in some fields, with the majority of standing palms showing disease symptoms. This information indicates a trend for increasing BSR with projected climate change. However, the climate for growing oil palm is currently optimal and has been so for many decades. The increase in disease previously reported was from increased virulence of the fungus, rather than increased susceptibility of oil palm due to a less suitable climate.

Ganoderma boninense basidiomata on oil palm stems. Images are from the authors’ personal collections (RRMP & DM)

BSR may increase further by natural selection of more virulent strains and oil palm cannot always adapt rapidly enough to respond to changes in pathogen virulence. The BSR pathogen has the ability to infect oil palm plants at a rate of as much as 80% incidence over half of its economic life span (Corley and Tinker 2015 ). Ganoderma is a variable genus with poorly defined species concepts and will adapt to climate change more readily than oil palm via natural selection of more virulent strains (Mercière et al. 2017 ). In Indonesia, BSR is less severe in Kalimantan than in Sumatra, probably due to younger crop rotations (Suryantini and Wilandari 2018 ; Paterson 2019a , b , 2020d ). In Thailand, national BSR incidence is relatively low with a reported rate of 1.53%, although it is more widespread in the south (Basal stem rot of oil palm 2020 ). In Southern Thailand, BSR incidence may be influenced by proximity to peninsular Malaysia where disease rates are also high (Pornsuriya et al. 2013 ). In Papua New Guinea, BSR incidence is not as high as in other areas of SE Asia, although rates of 50% have been recorded in some regions. An average of 25% infection is a plausible scenario for this country as the initial incidence is lower than in Malaysia and Indonesia. BSR incidence is probably low in Myanmar as the plantations are more recent and distances between them are large. Myanmar has a distinctly different climate to the rest of SE Asia and is less capable of growing oil palm per se (Paterson 2020b ).

Paterson ( 2020c , d ) considered BSR in Malaysia and Indonesia respectively and in the regions of the countries. Disease incidence was much higher in peninsular Malaysia than in Sarawak, and especially Sabah. Sabah may therefore be a more sustainable region from the perspective of BSR incidence. In Indonesia, Sumatra and Java had particularly high incidences compared to other areas such as Sulawesi and Papua. These scenarios indicated which regions may be suitable in terms of future sustainability of the industry. However, the environmental effects, especially from deforestation, should be of prime importance in planning new plantations.

Fusarium oxysporum f.sp. elaeidis (Foe) results in acute and chronic wilt of oil palm particularly in Africa (Paterson 2021e ). A major outbreak devastated OP in West and Central Africa where it has a particularly high incidence (Rusli 2017 ). Foe in Malaysia and Indonesia is controlled by quarantine procedures, although native strains can infect oil palm in vitro. Avoiding introduction from endemic areas is essential to prevent Foe in regions where it is does not normally exist. However, importation of breeding materials from Africa is required to expand genetic diversity in Malaysia and Indonesia, implying a risk from infested seed and pollen. Quarantine procedures in Malaysia and Indonesia are undertaken, although the risk of spread remains, especially because climate change may increase disease (Rusli et al. 2015 ).

In the Ivory Coast, 20% of palms planted from 1964 to 1967 displayed vascular wilt symptoms, with some crosses at 70% (Cochard et al. 2005 ). But from 1976 to 1983 vascular wilt rates of < 2% were observed and in the 1990s, it was difficult to find symptoms in plantations. These reductions were attributed to breeding for resistance. Rusli et al. ( 2015 ) found that Foe infection of oil palm was frequent in Ghana with incidences of 10.4% and 8.3% and also detected the presence of Foe in ca. 11% of symptomless palms in plantations. Decades of selection and breeding for wilt resistance occurred in Ivory Coast where 20% of palms planted from 1964 to 1967 displayed vascular wilt symptoms, with some crosses at 70% (Cochard et al. 2005 ). Rusli ( 2017 ) demonstrated that Malaysian oil palms were susceptible to infection by Foe strains from Africa.

Phytophthora palmivora is a fungus-like oomycete and a notorious pathogen of oil palm, causing severe damage in Latin American countries, such as Colombia (Corley and Tinker 2015 ). The disease has recently devastated > 30,000 ha in South West Colombia and > 10,000 ha in the Central Zone, and the rapid increase in the disease may be related to climate change. Acute and chronic forms are found, and it is possible that several different diseases have been described under one name. The acute forms are present in Colombia and Ecuador, with the chronic forms found in Brazil (Corley and Tinker 2015 ). P. palmivora disease of oil palm is unreported in Malaysia and/or Indonesia, although a similar spear rot of oil palm has been reported in Africa and Thailand, which may involve P. palmivora . Many other hosts for the oomycete exist in Malaysia and Indonesia (e.g. durian) and, in view of a recent extreme outbreak in Colombia, P. palmivora presents a potentially severe threat to Malaysian and Indonesian plantations (Paterson 2020a ). More assessments of infectivity are essential given that outbreaks of P. palmivora could cause severe problems for major SE Asian oil palm industries.

Other fungi Several lesser fungal diseases also cause problems for oil palm (Corley and Tinker 2015 ). Bunch failure is used to describe oil palm fruit bunches that fail to develop from anthesis to harvest, and the disease can be caused by the basidiomycete Marasmius palmivorus. Another basidiomycete, G. philippii , is closely related to G. boninense but is in fact a trunk rot of Acacia trees that is also listed as an oil palm pathogen (Corley and Tinker 2015 ). This species may become more frequently isolated from oil palm due to climate change. Phellinus noxius is a basidiomycete, partially responsible for upper stem rot of oil palm, occurring together with G. boninense in some cases. Haematonectria haematococca has been implicated in spear rot of oil palm in vitro. Dry basal rot of oil palm is caused by the ascomycete Ceratocystis paradoxa (anamorph =  Thielaviopsis paradoxa ), which also has been implicated in oil palm fatal yellowing in, for example, Colombia. Cercospora ealidis is widespread throughout Africa and causes Cercospora leaf spot. It is infrequent in Asia and is primarily a disease of nursery seedlings and frequently carried forward to plantations where it can survive for a long time (Corley and Tinker 2015 ). Glomerella cingulata is responsible for anthracnose disease in oil palm, although it is not severe currently. All these are diseases of oil palm and it is important to assess how they will be affected by climate change in future studies.

In general, pest species of oil palm do not have as much impact on the crop as diseases, with the possible exception of the rhinoceros beetle, Oryctes rhinoceros , which emerged as the major pest of oil palm in SE Asia in the 1980s. Although chemical insecticides can be effective, they are expensive, they can affect beneficial insects, and the target organisms may develop resistance. This has led to development of biocontrol strategies, the most effective of which are the deployment of two pathogens of the beetle, namely the entomophagous fungus Metarhizium anisopliae and the Oryctes virus (Ramle et al. 2005 ). Both pathogens are specific to rhinoceros beetles and as such will not affect other insects. The Oryctes virus appears to be endemic in the beetle population, and deliberate augmentation can increase infection levels to > 75%. Metarhizium fungal spores can be applied to areas of infestation as a spray that is highly effective at controlling, but not totally eradicating, the beetles. The combined use of these and other natural pathogens of the rhinoceros beetle have the potential to reduce its harmful impact on the crop, while also minimizing risks of resistance development.

With the projected increase in oil palm replanting over the coming years, it will be important to consider the wider release of such biocontrol agents into areas where rhinoceros beetle incidence is particularly high. These and other forms of integrated pest management are being investigated as primary options in plantations across SE Asia (Ramle et al. 2005 ; Kalidas 2013 ). The rapid expansion of high intensity commercial plantations in new regions such as West Africa and South/Central America, plus climatic changes, are likely to result in the emergence of new pests and pathogens. Therefore, it will be important for the public sector and industry to work together in developing improved methods of surveillance and early detection of such threats (Kalidas 2013 ; Caudwell and Orrell 1997 ).

Impacts of climate change

The negative impacts and significance of climate change are well documented in the scientific literature and are now broadly accepted by most of the general public. Climate change threatens the sustainability of crop production via factors such as temperature, rainfall and disease patterns (Rosenzweig et al. 2008 ). However, the likely effects on tropical crops remain less well known, especially in SE Asia, Africa and Latin America (Ghini et al. 2011 ; Feeley et al. 2017 ; Sarkar et al. 2020 ), although recent research has started to address the situation for oil palm (Paterson 2019a , b , 2020b , c , 2021a , b ; Paterson and Lima 2018 ; Paterson et al. 2015 , 2017 ; Sarkar et al. 2020 ; Shabani et al. 2012 ), as discussed below. Climate change effects on natural systems require prediction to mitigate consequential changes in diversity and ecosystem function (Feeley et al. 2017 ). Mapping of plant disease distributions can influence biosecurity planning, specifying areas that qualify for eradication or containment. The CLIMEX model has been developed for current and future species distribution where knowledge about climate change effects on species distributions is essential in mitigating negative impacts (Lenoir and Svenning 2015 ).

Effects of oil palm cultivation on climate change

Koh and Wilcove suggested that oil palm expansion occurs at the expense of forests acting as carbon sinks (Koh and Wilcove 2008 ). Dislich et al. ( 2017 ) determined 11 of 14 ecosystem functions decreased in levels of function by the introduction of oil palm plantations. Fitzherbert et al. ( 2008 ) determined that oil palm plantations support many fewer species than forests and some other tree crops: Habitat fragmentation and increased pollution can further increase GHG emissions. The detrimental aspects of increasing numbers of oil palm plantations has been discussed in terms of deforestation and haze production from burning peat soil to clear ground for new plantations (Tonks et al. 2017 ; Cook 2018 ; Veloo et al. 2015 ). These processes release GHGs contributing to climate change (Dislich et al. 2017 ).

The conversion of tropical rainforests into oil palm plantations is the primary environmental impact of the industry (Paterson and Lima 2018 ). Forested areas are used for the expansion of plantations where the emissions from conversion exceeded the potential carbon fixing of oil palm (Paterson et al. 2015 , 2017 ). Oil palm production involving deforestation re-leases global anthropogenic emissions of 6–17% CO 2 (Wich et al. 2012 ). The highest carbon emitter countries from forest cover loss are Brazil, Indonesia and Malaysia with values of 340, 105, and 41 [Teragrams (Tg) C/year] respectively. Indonesia and Malaysia account for high C emissions from deforestation as they are the first and second highest producers of oil palm. Substantial palm oil production is also undertaken in Columbia and Nigeria (Paterson et al. 2017 ). Emissions from oil palm cultivation in Indonesia accounted for ca. 2–9% of all tropical land use emissions from 2000 to 2010 (Carlson et al. 2018 ) and deforestation accounted for about 30% of global warming-related pollution emissions in 2009, with Indonesia as the world’s seventh-largest producer of such emissions. Plantation expansion in Kalimantan, Indonesia contributed 18–22% of the country’s CO 2 emissions in 2020.

Large reductions in emitted GHGs and climate regulation function occur due to conversion of forest to oil palm plantations (Dislich et al. 2017 ). More GHGs and volatile organic compounds (VOCs), which are precursors to tropospheric ozone, are produced by oil palm plantations. GHGs emitted from land-clearing fires and land and plantation establishment are significantly greater than carbon sequestered by oil palm. VOCs, GHGs and aerosol particle emissions during fire periods result in direct and indirect changes of solar irradiation while undisturbed forests give lower air and soil temperature and higher air humidity microclimates compared to plantations (Dislich et al. 2017 ).

Indonesia has increased oil palm plantations, reducing drastically the primary forest. Sumatra has the highest primary rainforest cover loss in the country. Forest cover in Riau and Jambi declined from 93 to 38% between 1977 and 2009 changing microclimatic conditions from lack of natural forests regulation. Warming of land surface and increases in air temperature from climate change occur from oil palm expansion as observed in Sumatra (Paterson and Lima 2018 ). Oil palm foliage cover is lower, more open, and simpler than tropical rainforest foliage cover. Warming occurs from reduced evaporative cooling and warming induced by land cover change (LCC) exceeded the global warming effect.

The predominant compound contributing to the GHG from oil palm plantations is CO 2 whereas nitrous oxide and methane are at reduced concentrations, although with greater effect per molecule. Large releases of CO 2 from land-clearing fires occur, particularly on peat. Also, fires indirectly increase emissions by increasing peat decomposition. Drainage of peat soil releases large concentrations of CO 2 to establish plantations by oxidation and decomposition: dissolved organic matter is removed from peat soils during drainage, which decomposes and releases additional CO 2 .

The very high fruit production of oil palm allows greater assimilation of CO 2 and produces more biomass than forests and is often used erroneously as an argument in favour of oil palm. This higher rate of C uptake does not compensate for that released when forests are cleared, as forests have more biomass than oil palm plantations unless very long timescales of hundreds of years are considered, well beyond the maximum time frame of ca. 80 years considered in Paterson et al. ( 2015 , 2017 ) in terms of the likely effect of climate change on suitable climate for oil palm growth for example.

Fires also add black carbon (soot), which increase global warming and oil palm plantations release more N 2 O into the atmosphere than forests, mainly from fertilizer use. Peatland deforestation for oil palm cultivation in West Kalimantan, Indonesia, increased GHG emissions greatly (Paterson and Lima 2018 ). Overall, the biological and managerial tools to surmount many challenges exist but need much better support (Murphy 2014 ) and will be discussed below. In addition, large scale conversion of tropical forest to oil palm plantations has detrimental effects on biodiversity.

Effects of climate change on oil palm cultivation

In terms of general effects, climate change is likely to affect sustainable production of palm oil as climatic suitability will decrease, with concomitant increases in economic and social problems in producing regions. Poleward movements in climate-related ranges of particular plants are by far the most frequently reported, including limited reports on poleward change in suitable climates for oil palm growth (Paterson et al. 2017 ; Fei et al. 2017 ). How species may react under climate change has been reported including the detrimental effect on the suitability of future climates on oil palm growth in a global setting (Paterson et al. 2017 ). Furthermore, oil palm production creates climate change as discussed above and this will affect detrimentally the ability to grow oil palms and alter their distribution (Paterson and Lima 2018 ). Oil palm is currently grown in optimal climatic conditions and has been for many decades (Corley and Tinker 2015 ).

Suitable oil palm climatic impact data have been used to create schemes for its mortality by postulating that large degrees of unsuitable and marginal climates in particular were likely to cause high amounts of mortality. Also, reductions in highly suitable and/or suitable climate per se would not cause a significant effect on oil palm mortality. Simulation modelling to determine suitable climate scenarios for growing oil palm (Paterson et al. 2017 ; Paterson 2019a ), were employed to estimate how climate suitability for oil palm growth would change the estimated mortality rate from unsuitable climatic conditions. Predicted percentage oil palm mortality was determined in (a) SE Asia (Paterson 2020b ) and (b) Latin America and extrapolated to Malaysia and Indonesia (Paterson 2020c ) (Fig.  2 a, b). These percentages represent large numbers of oil palms in Malaysia, Indonesia, Thailand and Papua New Guinea because of the large numbers grown in these countries. Information on oil palm mortality is also provided for some African countries in Paterson ( 2021e ). 

(Adapted from data provided in Paterson ( 2021b )

a Oil palm mortality in Ecuador, Colombia and Brazil. b Oil palm mortality in Malaysia and Indonesia. These data take into account projected future changes in suitable climate for growing oil palm.

The detrimental effect of future climate changes on oil palm cultivation globally and on oil palm mortality in Kalimantan, Indonesia and some other SE Asian countries were determined (Paterson 2020b , c ; Paterson et al. 2017 ), which provided information relevant to Malaysia (see Table 3 ). High oil palm mortalities were predicted for Thailand, and Myanmar and low mortalities for Kalimantan and the Philippines, while Papua New Guinea was intermediate (Harris et al. 2013 ; Gunarso et al. 2013 ). Modelling of oil palm mortality for three South American countries, Malaysia and Indonesia was performed (Paterson 2020c ) using similar methods to Paterson ( 2020b ). The Latin American countries, particularly Brazil, were assessed to have high future mortalities, whereas the figures for Malaysia and Indonesia were much lower. These potential effects on mortalities will have detrimental consequences on future abilities to meet the demand for palm oil. High levels of mortality were determined for Peninsular Malaysia but not in Sabah or Sarawak in the future from unsuitable climate (Paterson 2020c ). In Indonesia, regions such as Sulawesi and Papua had low levels of mortality in contrast to Sumatra and Java where high mortality was determined (Paterson 2020d ). A study of predicted oil palm mortalities in South America found that by 2050, low mortalities are predicted in (a) the East Coast from Brazil to Suriname, (b) more centrally in Paraguay and (c) Colombia, Peru and Ecuador in the west. High mortalities were determined for Guyana, Bolivia, Western Brazil and Venezuela (Paterson 2021a ). By 2100, much higher mortalities were determined for all countries except Paraguay, which appeared virtually immune to the effects of future climate. Very high mortality of oil palm was determined for Ghana and Nigeria in Africa, especially by 2100 (Paterson 2021e ), whereas Cameroon had low levels,

African oil palms are likely more badly affected by climate change from increased GHGs, although there appears a low extinction risk in the immediate future. Furthermore, losses of oil palm habitats such as tropical rain forests are exacerbating the pressures on oil palm populations: their ecosystem functions and services will be highly sensitive to climate change. Blach-Overgaard et al. ( 2015 ) predicted climate suitability losses across almost all regions where palms occur in Africa and CLIMEX modelling indicated that Africa will have less suitable climatic conditions for oil palm cultivation (Paterson et al. 2017 ). However, sharp longitudinal trends to potential refuges from west to east Africa were found, which could allow oil palm to survive naturally, or by the creation of new plantations towards to east of the continent, with, of course, environmental concerns being paramount (Paterson 2021a ). Using similar methods, a phased increase in suitable climate was predicted, which implied more unsuitable climate for growing oil palm towards the centre of the South American continent (Paterson 2021b ). Increasing longitudinal trends in suitable climate for growing oil palm SE Asia were observed from current time to 2050 and 2100 from west to east (Paterson 2021c ). Paterson ( 2021d ) developed an improved model for determining suitable climate for growing oil palm in Africa which confirmed the west to east trend and could be employed in other regions such as South America and SE Asia. 

A significant negative relationship was found between annual average temperature and sea level rise and oil palm production in Malaysia temperature with rises of 1 to 4 °C potentially causing oil palm production to decrease by 10 to 41% (Sarkar et al. 2020 ). Future changes to suitable climates for growing oil palm worldwide were considered using modelling based on temperature, soil moisture and wet stress data (Paterson et al. 2017 ). The general predictions were for a reduced level of suitable climatic regions by 2050 and further reductions by 2100. The projections indicate serious consequences to the oil palm industry generally. In Africa, the climate is predicted to be less suitable for growing oil palm at the same rate, or faster than, Malaysia and Indonesia with the exception of Uganda where increases in climatic suitability were predicted. Paraguay appears to gain suitability in climate for growing oil palm in South America, whereas Venezuela will have a particularly low level of suitable climate. French Guiana, Surname and Guyana appear to maintain suitable climates and large losses were determined in west Brazil by 2100. The western countries of Colombia, Peru and Ecuador will suffer severe losses of suitable climate. Furthermore, there was a three-phase trend in suitable climate rather than a single direct longitudinal change (Paterson 2021b ). Vietnam, the Philippines, Papua New Guinea (PNG) and island Malaysia had increased suitable climate by 2050 in SE Asia. Large decreases in suitable climate by 2050 for Thailand, Laos and Cambodia, which are towards the west of SE Asia, were observed (Paterson 2021c ).

Climate has an important role in defining the range limits of oil palm distribution by exerting eco-physiological constraints (Paterson et al. 2017 ). However, factors such as soil properties and biotic interactions may prevent plants from colonizing sites that are otherwise suitable. Studies such as Paterson et al. (Razak et al. 2020 ) are unusual in that a wider range of climatic conditions are considered than only temperature (Paterson 2021a ). Changes in climate will have broad-scale impacts on the distribution of oil palm. Alterations in cold, heat and dry stresses were largely responsible for the changes in climatic suitability for oil palm cultivation, while wet stress was unimportant, hence extending the range of parameters from temperature alone (Paterson et al. 2017 ). Apart from temperature (Feeley et al. 2017 ) and diseases, a wide range of factors still awaits consideration, although studies on effects on crop production have been reported (Lobell et al. 2006 ).

One of the most important future threats is the emergence of new pests and diseases and/or the movement of existing diseases from one part of the world to another. The transfer of existing biotic threats could occur due to climatic factors, but another mechanism is movement via trade, travel or other human agency where potential pathogens might elude current biosecurity measures. For example, the serious impact of P. palmivora on plantations in S. America, and if this pathogen were to reach the central growing regions of SE Asia, its impact could be devastating (Paterson 2020a ; Mohamed Azni et al. 2019 ). Although biosecurity measures are already in place, these tend to be focussed on known threats and may not be able to cover all of the many potential entry routes for a new pathogen. A similar situation exists for Fusarium wilt disease of oil palm (Paterson 2021e ) with African countries suffering most from this particular disease.

An example of an unexpected new form of pathogen of oil palm is the orange-spotting coconut cadang-cadang viroid variant (OSCCC-Vd) (Coconut cadang-cadang viroid (cadang cadang disease) 2020 ). Viroids were only discovered in the 1970s and are the smallest and simplest known type of infectious pathogen, consisting of just one small, naked, circular single-strand of RNA that does not encode any proteins. The origin of viroids is unknown with some suggestions that they might date from an ancient non-cellular ‘RNA world’, although a more parsimonious hypothesis is that they have arisen de novo on multiple occasions as plant-specific pathogens (Catalán et al. 2019 ). OSCCC-Vd normally infects coconut plantations and is endemic in the Philippines, but early in 2011 a putative variant was found in oil palm plantations in Sabah, triggering a ban on the movement of oil palm materials to other parts of Malaysia. Although the threat of OSCCC-Vd eventually receded in the 2010s, this episode exposed problems in the surveillance mechanisms and phytosanitary procedures in the face of the sudden appearance of a hitherto unknown pathogen.

The effects of climate change on oil palm diseases by fungi and by the oomycete P. palmivora have been discussed and indicate a trend for increased BSR, Fusarium wilt  and P. palmivora incidence with climate change. Modelling of the effect of changes in climate on the infection levels of BSR in Sumatra, Indonesia, including quantitative BSR data, indicated that BSR would become even more serious after 2050 (Paterson 2019b ). Weather is a major factor in crop pathogenesis and, when crops suffer cold, heat or desiccation stress, they may be more susceptible. Mountain areas were considered in this assessment which affected some results considerably. For example, hilly regions in North Sumatra did not provide a suitable climate for oil palm.

A similar ‘Agriculture 4.0’ methodology of big data and simulation modelling was used to produce a scheme of how BSR might advance under future climates in Malaysia (Paterson 2019b ). The assessments of BSR were merely qualitative and indicated, nevertheless, that the levels of infection would also increase a great deal after 2050. Paterson ( 2020b ) considered future climate effects on BSR in Kalimantan and alternative countries in SE Asia. Kalimantan and the Philippines were assessed as sustainable, but Thailand and Myanmar were unsustainable, while Papua New Guinea was intermediate in sustainability (Fig.  3 ). P. palmivora is prevalent in South America and Paterson ( 2020c ) extended the principles described above to the disease. Colombia and Ecuador were highly susceptible, while Brazil was less so. However, a severe threat to Malaysia and Indonesia was assessed, which would require increased future vigilance to control the disease. Paterson ( 2021e ) indicated an equivalent situation for Fusarium wilt of oil palm focusing on African countries extrapolated to Malaysia and Indonesia. 

Basal stem rot in three S E Asian countries. The incidence of disease was determined from the changes in suitable climate for growing oil palm as described in Paterson ( 2020b )

Amelioration of climate change effects on oil palm and vice versa

Procedures for amelioration of the effects of climate change on oil palm and the effect of oil palm on climate change, have been discussed as partially based on CLIMEX models (Paterson and Lima 2018 ). The situation with the oil palm industry cannot be business as usual in light of the effects of climate change on oil palm and vice versa. A series of procedures have been devised to address how the industry might mitigate these problems (Paterson and Lima 2018 ). Many of these measures will help to maintain the biodiversity normally associated with forests because they will stop the plantation being a monoculture. Also, the soil microfauna will likely increase as a result of these measures.

Reducing the effects of oil palm on climate change

Plantation management measures can prevent or reduce losses of some ecosystem functions which will reduce climate change. These include (a) avoiding illegal land clearing by fire, (b) avoiding draining of peat, and (c) using cover crops, mulch, and compost (Dislich et al. 2017 ). Reducing GHG by limiting oil palm expansion to areas with moderate or low carbon stocks is most effective. This involves ceasing development of plantations on peatland and enforcing the moratorium on new concessions in primary forests. In addition, rehabilitation and restoration of converted peatlands are an option. Limiting the problems of flooding may prevent increased CH 4 emissions on mineral soils. Reducing unnecessary expansion of plantations and ensuring existing ones are managed optimally are crucial. Mechanisms such as (a) reduced emissions from deforestation and forest degradation, plus conservation, sustainable management of forests, and enhancement of forest carbon stocks (REDD+), (b) national greenhouse gas accounting, and (c) accurate emission factors for C dynamics are essential (Comeau et al. 2016 ). Considerable funding has been obtained for REDD + scheme. REDD + proposals include growing oil palm on reclaimed soil and replacing the use of fertilizer with other methods. A few plantations are replacing grassland or scrub where the average C content of the plantation will exceed that of the previous vegetation and so becoming a greater C sink.

Controlling disease may assist in decreasing the unwanted expansion of plantations as yields will be increased from reduced disease in current plantations, such as described for Ganoderma rots of oil palm (see below). The current awareness of environmental issues makes optimizing current plantations by reducing disease imperative in any case. Reducing nitrogen fertilizer is an effective way to decrease nitrogen-based emissions (Dislich et al. 2017 ). Oil palm plantations release large quantities of nitrous oxide (N 2 O) into the atmosphere linked to nitrogen (N) fertilizer use. An option for oil palm planting, without threatening tropical rain forests, is the rehabilitation of anthropogenic grassland that was created by human clearance of natural forest many centuries ago. For example, there are extensive areas of anthropogenic grassland in Indonesia where much of the spread of oil palm plantations will take place (Paterson and Lima 2018 ).

Reducing effects of climate change on oil palm

Evidence is growing of the existing and likely future impacts of anthropogenic climatic changes on the oil palm industry. Immediate priorities should include further research to understand climatic effects on oil palm in the many regions of the tropics where the crop is now grown, and to begin the implementation of mitigation strategies to minimize adverse effects. Most climatic threats identified to date involve periods of elevated temperature and reduced rainfall, both of which cause stresses that impact on overall crop performance, and in particular oil yield. Increasingly well documented impacts of climatic cycles such as El Niño and La Niña have underlined the crucial role of climate for oil palm performance and oil yield (Rahutomo 2016 ; USDA 2016 ).

Strategies are required to minimize the adverse effects of climate change on oil palm cultivation: it cannot be business as usual for the industry. These practices may also decrease climate change from reduced deforestation if the yields of existing oil palm are optimized to cope with climate change. More dispersed cultivation outside the main producing countries could ameliorate threats from climate change as a wider range of climates would be encountered, some of which may be more suitable for oil palm. Current expansion into West Africa and South/Central America already underway was intended to create a more secure production system in the longer term. However, Latin America and Africa may be even more affected by climate change in terms of suitable climate for growing oil palm than SE Asia, implying that expansion will be unlikely. Even within these continents there are trends which will be useful for plantation managers (Paterson 2021a , b ).

Cultivation at higher altitudes and/or lower and higher latitudes may be possible beyond the lowland tropics as climate change progresses. An increase in highly suitable climate for growing oil palm by 2030 in Indonesia and Malaysia largely in mountainous regions of Sumatra, Sarawak, Borneo, and Sulawesi was reported (Paterson et al. 2015 ). There may be novel areas for oil palm development even under climate change, although in general, the climate suitability per se will be reduced. A caveat being potential biodiversity and ecological function loss if novel areas are converted from, for example, forest. The use of cover crops to reduce climate effects on oil palm may be possible and increases biodiversity. The sustainability of oil palm production will depend in part on using cover crops, especially under suboptimal conditions. Leguminous cover crops are grown to (a) coexist with oil palm following jungle clearing and planting/replanting, (b) provide complete cover to an otherwise bare soil, and (c) protect from erosion. They also perform multiple functions such as reducing soil water evaporation, reducing runoff losses, improving and maintaining soil fertility, and recycling of nutrients (Samedani et al. 2015 ). They promise reduced environmental pollution and improved crop yields. Legumes may reduce C and N losses from oil palm systems and increase soil C sequestration. Some examples for oil palm are as follows: Pigeon pea ( Cajanus cajan ), Calopo ( Calopogonium mucunoides Desv.), butterfly pea ( Clitoria ternatea ), white tephrosia ( Tephrosia candida ), and Brazilian stylo ( Stylosanthes guianensis  var.  guianensis ) some of which are already in use in SE Asia (Paterson and Lima 2018 ). The biodiversity of the plantation will be increased per se as each plant is introduced and by the increase in nitrogen fixing bacteria associated with the legume.

Soil management practices including (a) empty fruit bunch (EFB) application, (b) palm frond application and chemical fertilization improving soil fauna (worms, beetles, and ants) feeding activity, and (c) better soil chemical properties, all of which show considerable promise. EFB applications greatly enhanced soil fauna feeding activity and are associated with increased concentrations of base cations and soil moisture. This elevated biological activity has good potential to assist ecosystem functions such as litter decomposition, nutrient cycling, organic carbon stabilization, and ultimately oil palm productivity. The use and presence of earthworms may increase the effectiveness of growing oil palm, as they can contribute to soil turnover, structure formation and serve as a fertility enhancer and, again, increase biodiversity (Paterson and Lima 2018 ).

Developing new oil palm varieties resistant to climate change is another possibility (Rival 2017 ), although may not be easily achieved. Breeding oil palm for climate change requires multidisciplinary and collaborative research at a high level (see next section). Selecting for complete resistance, rather than tolerance to diseases, leads to high selection pressures for new variants of the pest/pathogen that can overcome the resistance in the crop. Resistant oil palm cultivars to climate change, or environmental stress, may overcome the less favourable growth conditions imposed by climate change (Tang 2019 ). However, it is impossible to know accurately what climate changes will be needed to enable resistant cultivar development, e.g. a cultivar resistant to desiccation stress may be sensitive to high temperature. High fertilizer use causes increased emissions of GHG from manufacturing, transportation, and application, and improvements will be required in oil palm nutrient uptake efficiency by breeding for suitable root systems.

Methods that ameliorate the effect of (a) climate change on oil palm and (b) oil palm cultivation on climate change include the following: Optimizing the rhizosphere by adding arbuscular mycorrhizal fungi (AMF) will also assist in reducing climate change with generalized benefits to oil palm growth, by reducing the need for fertilizer for example. Arbuscular mycorrhizal (AM) symbioses have beneficial effects on water transport to assist in overcoming drought conditions, of relevance particularly to ameliorating climate effects. Reducing fertilizer production and use will cause decreased emissions that lead to climate change, and the use of AM could ameliorate the effects on oil palm. AM and AMF addition will increase biodiversity within plantations (Paterson and Lima 2018 ).

“Slash-and-char” as an alternative to “slash-and-burn” of forests cleared for oil palm may be beneficial and feasible. Slash-and-char effectively produces charcoal to sequester CO 2 normally employed for forest residues. This could be used more extensively to improve agriculture in the humid tropics, enhancing local livelihoods and food security, while sequestering various forms of carbon (C) to mitigate climate change. Biochar soil management systems can deliver tradable C emissions reduction as the C sequestered is accountable and verifiable. The fraction of the maximum sustainable technical potential that is realized will depend on socioeconomic factors, including the extent of government incentives and the emphasis placed on energy production relative to climate change mitigation (Paterson and Lima 2018 ). Reduced tillage is another possibility for affecting climate change, where reducing tillage with AMF provides the optimal conditions for oil palm. Low tillage combination with AMF assists nutrient uptake, water relations, and protecting against pathogens and toxic stress, hence potentially ameliorating the effect of climate change on oil palm growth. Also, low tillage will decrease the emission of GHG from oil palm plantations (Paterson and Lima 2018 ).

An important tool used by policymakers to assess the impacts of a particular cropping system is life cycle assessment (LCA) (Schmidt 2015 ; Yee et al. 2009 ). This method seeks to estimate the impact of all aspects of the production process from planting seed, growing, harvesting and processing the crop (including fuel and labour costs); application of inputs such as water, fertilizer, herbicides, and pesticides; shipping of the oil overseas and downstream conversion into products such as foods and oleochemicals; transport to wholesalers, retailers, and consumers; and finally, disposal of products at the end of their lifetimes. Unfortunately, very few published studies cover the entire system ‘from cradle to grave’.

The most effective manner of addressing climate change is to adhere to policies devised at the 2019 COP25 climate meeting by reducing GHGs and future temperature rises. Conservation scientists, managers and environmental policymakers need to adapt their guidelines and policies to mitigate the impact of climate change (Brooke 2008 ). The new recommendations from COP meeting in Glasgow, Scotland in 2021 should be implemented as a matter of urgency as the most effective procedures for controlling climate change and consequently the effects of climate change on oil palm. Importantly, palm oil producers should also collaborate more effectively to help shape future policies on climate change and oil palm.

Breeding and biotechnology to improve oil palm as a crop

Recently, there have been several significant advances in breeding and biotechnology use for oil palm improvement. This is despite the challenges posed by the long-lived perennial nature of oil palms, which are large plants typically grown commercially for > 25 years. Hence, such biological strategies are much more complex and lengthier to implement compared to the smaller, faster growing annual crops. Breeding efforts have tended to focus on major economic traits such as oil yield and composition, pest and disease resistance, and plant architecture. Until relatively recently, oil palm breeding was also disadvantaged by the restricted genetic pool of commercial varieties, most of which were derived from small numbers of plants imported from Africa to SE Asia in the nineteenth and twentieth centuries. The available gene pool has now been greatly expanded, largely thanks to a series of germplasm collection expeditions to Africa and South America by pioneering breeders such as Rajanaidu et al. ( 2014 ). This has now allowed for genome-wide association studies (GWAS) of key traits such as oil yield and fatty acid composition (Ithnin et al. 2020 ) in the case of American oil palm and an Elaeis oleifera × Elaeis guineensis hybrid (Osorio-Guarín et al. 2019 ). Recent breeding-related reviews include genomics, genomic selection (Nyouma et al. 2019 ), transgenics (Costa et al. 2012 ), genome editing (Yarra et al. 2020 ), and marker-assisted selection (Ting et al. 2018 ; Babu et al. 2019 ). Following the publication of the oil palm genome sequence in 2013 (Singh et al. 2013 ), several detailed linkage maps have now become available for the use of breeders (Ong et al. 2019 ; Herrero et al. 2020 ).

Genomics-based strategies such as marker-assisted selection are already generating several useful advances for a variety of important traits that include oil yield, fatty acid composition and crop morphology (Xia et al. 2019 ; A quantum leap with genome select 2020 ). One of the most exciting recent developments was the announcement in mid-2020 of new breeding lines that are capable of more than double the current average oil yield (A quantum leap with genome select 2020 ). These plants are part of a genomics-based programme called ‘Genome Select’ carried out by plantation company Sime Darby, with a claimed 9.9 t/ha average yield over 5 years in field trials under optimum conditions. Given that current average palm oil yields are less than 4 t/ha, and that soybean and rapeseed only yield 0.3 and 1.2 t/ha respectively, this could be a game changer for the industry if two important conditions are met. Firstly, the experimental lines will need to be assessed for their oil yield performance under commercial plantation conditions in a range of geographic regions and, if necessary, crossed with locally adapted varieties. Secondly, the new higher yielding varieties need to be part of an ambitious replanting programme that will potentially replace a significant proportion of the estimated 2.5 billion oil palms that are currently under cultivation worldwide.

In terms of molecular genetics approaches to BSR mechanism and control, G. boninense genome and transcriptome data are now available with two G. boninense genome assemblies in the NCBI Depository (Wong et al. 2019 ), which provides a table listing publicly available genome and transcriptome data associated with the G. boninense and G. boninense -oil palm pathosystem. High-throughput next-generation sequencing and improved bioinformatics analyses has greatly facilitated G. boninense pathogenesis and housekeeping candidate gene identification. However, G. boninense remains poorly studied with respect to system-level gene function studies and biotechnology manipulation, with no available gene co-expression network models. Most studies have focused on host transcriptome data, whilst similar studies on the pathogen remain scarce. Ho et al. ( 2016 ) utilised mass RNA sequencing and de novo assembly of RNA-seq and were able to detect a high number of Ganoderma transcripts involved in lignin metabolism, such as manganese peroxidase and laccases. It is encouraging that, very recently, in silico mapping within an oil palm breeding program has revealed several QTL associated with genetic resistance to G. boninense (Daval et al. 2021 ).

Publication of the transcriptome of G. boninense at monokaryon, mating junction and dikaryon stages (Ho et al. 2016 ; Daval et al. 2021 ; Govender et al. 2020 ) will be useful for investigation of the mating process of this fungus. However, annotation and functional studies of these differentially expressed genes at different stages have not yet been done. RNAi as a tool for functional genomics to study developmental or virulent genes is lacking, although the genome has been sequenced, and there is the promise of new approaches to molecular breeding using genome editing technologies such as CRISPR-Cas-9. The role of genes involved in ergosterol biosynthetic pathway in G. boninense utilizing RNAi-mediated gene silencing is currently being investigated (Govender et al. 2020 ). The identification and verification of candidate genes are crucial for the application of these targets in RNAi-based crop protection, such as host-induced gene silencing (HIGS) or spray-induced gene silencing (SIGS). In addition, a study on the potential application of RNA silencing targeting DCL genes of G. boninense to confer protection against basa 581 stem rot is in progress (Govender et al. 2020 ). The availability of G. boninense genome data in public database (NCBI) enables potential candidate genes to be identified for testing and designing of efficient silencing constructs to avoid off-target transcripts, whilst the availability of the oil palm genome data helps to ensure the silencing constructs do not target and negatively affect the host. Because G. boninense on attacks oil palm by degrading lignin (Fig.  1 ), there is the possibility of modifying lignin to make oil palm plants more resistant. Alternatively, making the plant more resistant to initial fungal colonization by inhibiting carbohydrate metabolism first is a more logical approach that possibly overrides the emphasis on lignin per se (Govender et al. 2020 ).

Global supply chains and consumer sentiment

Palm oils are globally traded commodities with lengthy and complex supply chains, which can impede implementation of sustainability criteria, such as no-deforestation (Lyons-White and Knight 2018 ). This complexity is further increased by non-economic factors including sustainability, traceability, disease monitoring and pest management. More recently, however, a more constructive dialogue has emerged as several NGOs and community groups have joined with bodies such as RSPO and some major industry players in exploring initiatives such as certification schemes, that seek to guarantee that palm oils are sourced from sustainable and environmentally friendly sources (RSPO 2009 ).

Palm oil supply chain and traceability

Due to increasing awareness of the wider impacts of oil palm crops, sourcing of palm oil from verified, certified sustainable/responsible sources is of growing interest. Supply chain traceability ensures that information about products can flow easily and enable consumers to have maximum information about product origins. Certification schemes have mostly been established to improve sustainability within the industry, but for these to operate openly and transparently, supply chain traceability is an essential requirement. An overview of a typical palm oil supply chain is displayed in Fig.  4 . The most widely used sustainable certification scheme, which aims to improve traceability, is RSPO (RSPO Supply Chains 2017 ). A graphical overview of each model is also displayed in Fig.  5 :

Identity Preserved (IP): sustainable palm oil is derived from a single source and kept separate from all other sources throughout the entire supply chain

Segregated (SG): sustainable palm oil is derived from multiple sources and mixed; it is then kept separate from conventional palm oil throughout the supply chain

Mass Balance (MB): sustainable palm oil is mixed with palm oil from non-certified sources in a controlled and regulated manner

RSPO credits: the supply chain is not monitored for the presence of sustainable palm oil. But manufacturers and retailers can buy credits from RSPO-certified growers, crushers and independent smallholders

A conventional palm oil supply chain with no certified traceability. The palm oil is produced, transported, refined, incorporated into products and then used by the customer

The four different RSPO supply chain models including Identity Preserved, Mass Balance, Segregated and Book and Claim (source: www.rspo.org ). The premise of how each supply chain works is described in-text. All palm oils produced under RSPO certification are able to carry RSPO branding, though in the case of Mass Balance and Book and Claim, there is no guarantee that 100% sustainable palms oils are being used

Labelling, health and nutrition

Labelling has been shown to influence consumer purchasing habits and to have positive impacts on food production. RSPO believes that using its certification trademark on products will be central to raising awareness and driving demand. Palm oil is used for cooking and is also added to many ready-to-eat foods. Its taste is considered savoury and earthy, with some people describing its flavour as being similar to carrot or pumpkin. It has been a staple in West African and tropical cuisines for millennia (Corley and Tinker 2015 ). In recent years, the public debate on the health and sustainability of palm oil and its use by food industries has strongly influenced consumer choices. There has been a perception that palm oil, with its relatively high saturated fat content, has adverse nutritional qualities, despite its long history as an important indigenous foodstuff in the tropics. This perception has been strongly challenged by recent meta-analyses and prospective observational studies, mainly conducted in North America and Europe, that failed to demonstrate a correlation between total saturated fat intake and an elevated risk of cardiovascular disease (Chowdhury et al. 2014 ).

Production of sustainable palm oil is recommended so that consumers only buy from companies using palm oil certified under RSPO, or similar certification schemes that have transparent commitments to improved ecosystem services and human wellbeing (Ayompe et al. 2021 ). Certification schemes improve consumer confidence and provide a high level of guarantee that that areas of high conservation value are preserved, local communities are supported, and that palm oil plantation managers are implementing best practices including for sustainability and the fair use of labour (Carlson et al. 2018 ; Schoneveld et al. 2019 ; Furumo et al. 2020 ; Santika et al. 2021 ). Whilst some groups have criticized certification schemes for not moving far or fast enough, researchers and NGOs such as WWF are working with schemes like RSPO, to facilitate greater progress and to include more progressive criteria for best practice, in order to certified. An example of such developments was the announcement in mid-2021 of a multi-stakeholder initiative called Project Lampung (Bootman 2021 ). This was launched with the aim of linking smallholder farmers in the Lampung province of Indonesia with the NGO, Solidaridad, plus multinationals (including BASF, Cargill and Estée Lauder) in order to enable their palm oil to reach global markets via RSPO certification (RSPO 2021 ).

Future prospects

As with many other sectors of commercial agriculture, the global oil palm industry is currently facing significant future challenges as it comes under increased scrutiny in an increasingly interconnected world. Many of these issues, such as the future of palm-based biodiesel, the stagnation in crop yield and related labour problems, and concerns about sustainability and environmental impact are relatively longstanding, but they have been brought into sharper focus as a consequence of the COVID-19 pandemic that started in 2020 and is likely to have long-term effects on the industry as will now be discussed.

An uncertain future for palm-based biofuels

Over the past decade a growing proportion of palm oil has been used as a biofuel, mostly in the transport sector as biodiesel derived from methyl esters of the oil. Most palm biodiesel is consumed locally in Malaysia and Indonesia. This is due to government-supported mandates that enforce the mixing of palm biodiesel with petroleum-derived diesel. However, the use of palm biodiesel as a carbon–neutral fuel in the wider global transport sector has proved to be controversial, especially in the EU (Muzii 2019 ). Until very recently, a substantial and growing amount of palm biodiesel, totalling 4.9 Mt in 2018, was used in the EU. As shown in Fig.  6 , for over a decade the EU has steadily increased its imports of palm oil for fuel use while the amount used for food, feed and oleochemicals has declined from a high of almost 4 Mt to about 2.7 Mt (Chandran 2019 ). These data show that in 2018 the EU imported a total of 7.6 Mt palm oil but only 2.7 Mt (36%) of this was for food and personal care use, while the remaining 4.9 Mt (64%) was for use as transport biodiesel or fuel oil (e.g. for electricity generation).

Source: Ref. Muzii ( 2019 )

EU palm oil consumption by end use. A steady decline in food use is mirrored by an increase in biodiesel use for palm oil imported into the EU from 2008 to 2018.

As described above, concerns about the environmental impact of oil palm cultivation and the use of food crops for biofuel, coupled with recent advances in electric vehicle (EV) technologies, mean that the EU is now moving away decisively from both crop-based biofuels and fossil fuels, with many countries seeking to replace all carbon-based fuels by 2050. In the medium term, as fossil oil use continues to decline and its price remains low, there are few prospects that palm biodiesel will compete effectively on price in international markets. This is likely to reduce the global market for palm biodiesel, although the additional palm oil that this would release should still be in high demand for edible uses. For example, Corley and Tinker 2015 ) estimated that, by 2050, a further 6 Mha of land could be required to meet total oil palm production requirements, which is a formidable challenge in view of the scarcity of environmentally suitable land. However, if most of the current palm that is diverted to biodiesel is switched to food use, about 3–4 Mha of this additional land would not be required.

Production issues

On the production or supply side, the oil palm sector faces several significant challenges that include new scientific advances, changing patterns of global trade and consumer sentiment, and the related issues of labour and mechanization. The efficiency and effectiveness of plantation management varies greatly across the sector, both among large commercial enterprises and individual smallholders. One of the most remarkable features of the oil palm is the stagnation in yields at values around or under 4 t/ha over the past two decades (Chandran 2019 ). As shown in Fig.  7 , this is in marked contrast to other major crops, including oilseeds, which have shown consistent yield increases in response to factors such as biological improvements, improved management and more efficient transport and supply chain infrastructure. In some cases, modelling analysis can provide new insights into plantation management that suggest possible improvements. A recent example is the application of model optimization and heuristic techniques that indicated significant potential for yield improvements by reducing the harvest cycle length from 19.6 to 8.3 days in a plantation in Columbia (Escallón-Barrios et al. 2020 ). Innovative new ideas for ‘smart’ oil palm mills have also been advanced (Isaac 2019 ) as well as the use of digital technologies, such as blockchain, to enhance the performance and transparency of supply chains (Keong 2019 ).

Source: Ref. Chandran ( 2019 )

Stagnation of average oil yield (in tonnes per hectare) in Malaysian OP crops (right-hand axis) compared to two major competitor oilseeds, rapeseed and soybean (left-hand axis).

The oil palm cropping system is unusual in its continued reliance on large amounts of relatively unskilled manual labour that must operate in a humid and hot tropical climate on a year-round basis (Crowley 2020 ). During recent decades many plantations have increasingly relied on temporary migrant labour, but low wages and increasing incomes from alternative forms of employment have created staff shortages, which were greatly exacerbated by the COVID-19 pandemic (Crowley 2020 ; Raghu 2021 ). These problems have been compounded by allegations of poor labour practices in some plantations that led to the blacklisting of some of the largest commercial companies and import bans by the US Customs and Border Protection in 2020–21 (Jamal 2021 ).

In the long term, the most realistic solution to the current labour problems that plague the sector is to introduce more mechanization and shorter plants, as has been done for several other staple monocot and tree crops (Murphy 2011 ). One way of facilitating mechanization and increasing yield is to use modern molecular breeding approaches to modify crop architecture, for example to reduce trunk height as has been done with apples and major cereals such as wheat and rice (Murphy 2011 ; Nagai et al. 2020 ). Interestingly, a very recent study has identified three major QTLs associated with oil palm height on chromosome 11, which could facilitate the breeding of shorter and more compact palms for enhanced yield and ease of harvesting (Teh et al. 2020 ). Replanting of ageing and/or poorly performing palms is a vitally important strategy for improving the yield, and hence the overall sustainability and environmental footprint of oil palm crops. This applies to both large commercial growers and smallholders, many of whom use inferior seeds bought from middlemen with no record of their provenance. While there have been government initiatives in Malaysia and Indonesia, these efforts need to be redoubled and made more effective (Shehu et al. 2020 ; Yahya et al. 2020 ; Oosterveer 2020 ).

Sustainability and environmental challenges

The use of oil palm as a food ingredient in the large EU market has been in steady decline over the past decade (Fig.  6 ). There is little doubt that part of this decline has been due to adverse consumer sentiment about the oil palm industry in general and there are now discussions in the EU to require verifiable ‘point of origin’ declarations for all food-grade palm oil (Southey 2020 ). This could mean that any oil that cannot be reliably identified as from a sustainably certified source, such as RSPO, might not be imported into the EU. Clearly the industry needs to address these certification and authenticity issues in its supply chains to ensure that it becomes fully compliant with the requirements of its second largest customer, namely the EU.

The global oil palm industry is a major component of contemporary agriculture, supplying food to billions of people, plus a host of non-food products that include strategically vital cleaning products used in critical health care settings. However, there are well founded concerns about the expansion of oil palm plantations into sensitive habitats, such as highly biodiverse tropical forests and peatlands (Meijaard and Sheil 2019 ; Meijaard et al. 2018 ). There are no viable alternatives to oil palm in terms of its yield and delivery of a range of specific oils for human use (Parsons et al. 2020 ). It is therefore important to implement transparent and effective certification schemes right across the industry to guarantee that oil palm products can be labelled as being derived from environmentally sustainable and socially responsible sources. It is also important to recall that deforestation and habitat loss are also associated with the second most important global oil crop, soybean. Policymakers may therefore need to consider ways to reduce the demand for oils more specifically and for unhealthy ultra-processed foods more broadly. The industry also needs to redouble its efforts to engage with global consumers in a constructive dialogue aimed at addressing its image problem and explaining the many benefits of its products (Reardon et al. 2019 ; Borrello et al. 2020 ). Oil palm crops face many other challenges, including emerging threats from climate change and the likelihood of new pests and diseases, that require more effective international collaboration. The influential players in the industry need to interact with the key organizations and countries now fully committed to reducing climate change. Nevertheless, new breeding technologies are providing the promise of improvements in some areas, such as much higher yielding varieties, improved oil profiles, enhanced disease resistance and modified crop architecture to enable mechanization of fruit harvesting.

Availability of data and materials

Not applicable.

Abbreviations

• Basal stem rot

Fresh fruit bunches

Greenhouse gas

Genetic manipulation (via transgenesis)

Genome-wide association studies

Identity preserved

Life cycle assessment (or analysis)

Million tonnes

Quantitative trait locus

Roundtable on sustainable palm oil

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Murphy, D.J., Goggin, K. & Paterson, R.R.M. Oil palm in the 2020s and beyond: challenges and solutions. CABI Agric Biosci 2 , 39 (2021). https://doi.org/10.1186/s43170-021-00058-3

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Sample Palm Kernel Oil Production Business Plan

If you’re planning on starting this enterprise, you’ll need the tips or guide provided in this palm kernel oil production Business Plan.

If you’re into food processing , one of the things you should know is the need to have your business structured.

This is only possible when there’s a plan of action. The business plan systematically lays out the processes of growth, sets a clear and achievable goal as well as charts the path towards sustainability.

This plan has been written specifically to help entrepreneurs put together a comprehensive plan for their businesses.

Here is a business plan for palm oil processing .

PALM KERNEL OIL PROCESSING BUSINESS PLAN

How your palm kernel oil production business plan unfolds is crucial. Its systematic arrangement helps to coordinate your points.

These points are key sections within the plan which address different aspects of the business. They include the executive summary and the company description section.

That’s not all.

Other equally important sections of the plan include the products & services section, market analysis, strategy & implementation, organization & management as well as financial plan & projections.

At this point, we’ll go into the basics of what should follow under each of these sections.

i. Executive Summary

The name alone conveys its meaning. The executive summary section provides an overview of your palm kernel oil production business plan.

Just like the plan, putting together the executive summary is a painstaking process that seeks to condense the key aspects of the plan to make it evident to the reader.

The executive summary should be able to stir the interest of an investor to consider the business idea as being worthy of attention. In other words, your executive summary should be able to hold the attention of your audience to make them want to read more.

The executive summary appears first in the palm kernel oil business production business plan.

It contains key sections such as the business name & location, the products & services offered, and the mission & vision statements.

Other key inclusions are the specific purpose of the plan.

Business Name & Location

Without a name, your business will be considered non-existent.

For a real shot at growth, you’ll need to give your business a name. This is introduced together with the business’s location. Where are your operations coordinated from?

Location is important to business and you should state why such is beneficial to your palm kernel oil production business.

Products & Services Offered

Here, anyone reading through your executive summary should know the basic products and services offered. It’s a no-brainer that your products will be derived from palm kernel fruits. Nevertheless, have all such products listed.

How beneficial are such products to your clients?

A dedicated section is provided for all the tiny details regarding the products and services being offered. Here, you’ll need to include any other services rendered by your business.

Mission & Vision Statements

The mission and vision statements of your palm kernel oil production business provide a clear direction the business is headed to. The mission statement relays your company’s primary objectives and purpose clearly and concisely.

The vision statement on the other hand focuses on your aspirations and goals. These are written in a manner that easily reveals how passionate you are about achieving set objectives.

In a nutshell, the vision statement should be inspirational and achievable.

Purpose of the Plan

The purpose of the plan is key to its attainment.

What do you want to achieve with our palm kernel oil production business plan? Is it to raise funding and set growth strategies in place?

These should be clearly stated to ensure easy comprehension by your audience.

ii. Company Description

This is where details about your palm kernel oil production business are fully unveiled.

Here, you want to explain who you are, how the business operates as well as set goals you wish to accomplish. So, what legal structure are you adopting for the business?

Have a brief history included? The company description section should also touch on the needs your palm kernel oil product will satisfy. A summary of your products and services including customers and suppliers should be given.

Write a summary of company growth with the market and financial highlights included. Last but not least, provide information about your short and long-term goals.

iii. Products & Services

This is the point where you describe all products and services offered by your palm kernel oil production business.

In describing such products and services, you want to emphasize customer benefits.

Also, you’ll need to include the market role of your products and the clear advantages it has over those of your competitors.

iv. Market Analysis

The market analysis section is where you demonstrate industry knowledge.

Here, a sketch of target customer segments with size and demographics is added. This includes a description of the industry and its outlook backed by statistics.

Providing historical, current & projected marketing data for your products and services will be in order. Evaluate your competitor’s strengths and weaknesses too.

v. Strategy & Implementation

The sales and marketing strategies being adopted for your palm kernel oil business are crucial. You need to explain how the business will be promoted or marketed.

Also to be included are details on pricing, costs, promotions, and distribution.

How will the company operate? Include details about its operational cycle. What are your sources of labor?

vi. Organization & Management

The quality of organization, as well as management, determines the success of your palm kernel oil production business.

You’ll unveil your company’s organizational structure with a focus on the key departments, employees, owners, as well as profiles of your management team.

vii. Financial Plan & Projections

The financial plan & projections section takes a detailed look at the financial statements.

Here, the help of a financial expert is necessary for a thorough job.

Key aspects to be analyzed include the historical financial data, realistic prospective financial information as well as a brief analysis of your financial data.

There you have it! With these sections adequately covered, your plan should be well written and enhance the realization of set objectives.

More importantly, its detailed implementation would ensure you’re on track to achieving your goals.

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PALM OIL BUSINESS PLAN SIMPLIFIED

• Post author: Ane
• Post published: June 7, 2017
• Post category: BUSINESS-PLAN-AND-FEASIBILITY-STUDY / Business Tips / Update
• Post comments: 1 Comment

PALM OIL BUSINESS PLAN SIMPLIFIED – people tend to ask for  sample palm oil business plan, palm oil processing business plan pdf, palm oil business plan pdf, business plan on palm oil production pdf, start palm oil business, feasibility study on palm oil production in Nigeria pdf, oil palm plantation project proposal, palm oil processing equipment.

Therefore, available topics include; PALM OIL BUSINESS PLAN SIMPLIFIED , A Business Proposal On The Establishment Of Palm Oil Mill Industry, Palm Oil Business Plan In Nigeria Feasibility Studies PDF, Standard/Bankable Palm Oil Business Plan With 3-Years Financial …, PALM OIL PRODUCTION AND PROCESSING BUSINESS PLAN IN …, A Sample Palm Oil Processing Plant Business Plan Template .. .,

Palm Oil Business Plan Simplified  – This is a Palm Oil Business Plan. It is a simplified model.  So, it’s  a step by step approach to writing any business plan. It is therefore adaptable to any other business idea. It is indeed a simplified model.

This model will answer such questions on: how to start palm oil investment in Nigeria, oil palm production , oil palm processing etc.

INTRODUCTION:

Table of Contents

Furthermore, to start with Palm oil is an edible vegetable oil derived from the mesocarp (reddish pulp) of the palm fruit. Thus,Palm oil is naturally reddish in colour because of a high beta-carotene content. Palm fruit forms in bunches and it’s the fruit of the palm tree. Palms are a member of the evergreen group of plants. Such plants don’t lose their leaves in any particular season of the year. There are several species of palm trees, most of them exist in tropical, subtropical, and warm temperate climates regions. Palms oil trees are one of the best known and most widely planted tree for economic rea sons .

Consequently, the production of palm oil under goes a well articulated process. The high oil yield of the trees and its use in food products and in the manufacturing industries for production of variety of goods has encouraged its wider cultivation, leading to it becoming a big trading business in all most all parts of west African and other parts of the world.

There re over four aspects of businesses involved in this single commodity. These are:

• Palm Plantation business
• Palm oil Processing (production)
• Palm oil marketing.
• And, Palm kernel processing and marketing.

As you can see, each of these aspects is a big business in Nigeria. Whichever one you get involved in, you need to do your business plan. Remember that the first page of your business plan is your Title page.

ALSO REA:  Feasibility Study on Oil Palm

In addition, this page will show what the booklet is all about. The whole page is devoted to it. So it will have something like this:

Now give it a good boarder line nd you are done.  

Palm Oil Business Plan Simplified

Yea. You are through with your Title page. The next page will be devoted to notices nd warnings concerning the use and misuse of the business plan.

TERMS AND CONDITIONS OF USE / LEGAL NOTICE

Furthermore, this page will sound like this:

“As at the time of writing this business plan / feasibility study, the author/publisher strives to be as accurate and complete as possible, notwithstanding, this business plan / feasibility study does not warrant that all the contents within are 100% correct due to prevalent economic changes from time to time.

Furthermore, the author/publisher will not be liable for any losses or damages of any kind incurred by the reader whether directly or indirectly arising from the use of the data and information found in this business plan / feasibility study. The reader should therefore understand that the information provided by Two Brothers Trading Company in this business plan/feasibility studies is confidential. The reader, hereby agrees that he/she will not discuss or exchange the information herein without the express written permission of Two Brothers Trading Company”

You could add other things, but you have giving the warning on the confidentiality of this document.

The next page is your content page.

CONTENT PAGE

In addition, Just like any other book all the chapters, topics, sub-topics, tables, nd graphs will be listed here. Major contents , and page references will look like this:

Title Page………………………………………………………..iii

Legal Notice……………………………………………………..iv

1.Executive Summary ………………………………………..1

1.1 Name of business………………………………………….2

1.2 Nature of business………………………………………..3

1.3 Office Address……………………………………………….4

2.Company Description ………………………………………5

3.Products and Services ………………………………………8

4.Marketing Plan…………………………………………………12

5.Operational Plan………………………………………………14

6.Management & Organization……………………………16

7.Start-up Expenses & Capitalization…………………..20

8.Financial Plan ……………………………………………………24

1.00 EXECUTIVE SUMMARY

1.1 Name of business:The name of the company is TWO BROTHERS TRADING COMPANY LIMITED 1.2 NATURE OF BUSINESS: TWO BROTHERS TRADING COMPANY LIMITED was incorporated on the 6th of March 2017 with a share capital of one million Naira. The primary object clause of the company is Oil Palm Trading, “to carry on business of trading, marketing, sales and distribution of general goods, such as cement and blocks, commission agents, manufacturers’ representatives, general suppliers and general contractors.” 1.3 Business AddressThe business address is Eziala, Imo State Nigeria 1.4 OBJECTIVEThe objective of this business as indicated in this business plan and feasibility study include:- To make palm oil available to the members of the public at a very affordable price. You can now list out other objectives. 1.6 VISIONTo become a household name in palm oil distribution in Imo state area of Nigeria. Achieve sales and services and profit growth goal of 120%, in the next three years. 1.7 MISSION STATEMENT: TWO BROTHERS TRADING COMPANY LIMITED mission is to become the recognized leader in its targeted local market in palm oil distribution, and to give customer optimum satisfaction, through its innovative, quality, and timely service delivery. 1.8 Purpose of the Business planThe purpose of this plan is to solicit for a loan of N5,000,000, and for the business plan to serve as management guideline in the running of the business in the next three years. 1.9 Expansion plan: It is hoped that if the projected return is maintained three more branches will be opened in the 4th year of the establishment of this business. You re done with the executive summary. You can now go over to point two which is company description.

  Palm Oil Business Plan Simplified

2.00 COMPANY DESCRIPTION/PROFILE:TWO BROTHERS TRADING COMPANY LIMITED was incorporated on the 6th of March 2017 with RC No3333 and a share capital of One million Naira of one Naira per share. It is made up of two directors as the shareholders. The primary object clause of the company is Palm oil trading “to carry on business of trading, marketing, sales and distribution of general goods, such as cement and blocks, commission agents, manufacturers’ representatives, general suppliers and general contractors.

2.1 Directors: Here give the names and details about the two directors including their professional and other life experiences that ill promote the business or show that they can manage the business.

READ ALSO: Break-even analysis for Business plan

3.0 products and services:.

3.1 Procurement

3.2 Whole-Sales

3.3 Retailing

3.4 Production Or Manufacturing Process.

Questions to answer here include:

i. Are products or services in development or existing (and on the market)?

ii. What is the timeline for bringing new products and services to market?

iii. What makes your products or services different?

iv. Ar there competitive advantages compared with offerings from other competitors?

v. Are there competitive disadvantages you will need to overcome? and how?

vi. Is price an issue?

vii. Will your operating costs be low enough to allow a reasonable profit margin?

viii. How will you acquire your products?

ix. Are you the manufacturer?

x. Do you assemble products using components provided by others?

xi. Do you purchase products from suppliers or wholesalers?

xii. If your business takes off, is a steady supply of products guaranteed?

7.0 START-UP EXPENSES & CAPITALIZATION:

TABLE 2: START-UP EXPENSES

Remember that every pre-operational expenses are capitalized. Therefore, the tangible fixed assets of Wheel barrow, containers, other fixed capital, nd shop fittings will be depreciated in accordance with relevant accounting standards for such items. The other items of Shop rent will be charged to the relevant trading period, the same could be done for miscellaneous expenditure or it could be amortized over some period according to the company accounting policy. If admin expenses has a long term effect it’ll be amortized over some periods too.  

 Palm Oil Business Plan Simplified

8.0 FINANCIALS:

8.1 Operational Expenses: .

TABLE 3: Estimated Operational Expenses.

8.2 DEPRECIATION:

Here you will state the method you are using to depreciate the fixed assets and amortize the capitalized expenditure. Depreciation could be at straight line method, sum of digit method, diminishing balance method or any other method. Any method used must be stated nd at what rate. Using straight line method at 25% for fixed assets, and 20% for furniture and fittings is appropriate. It means equal amount each year. The company may decide to write off the intangible assets in the first year or amortize it for say 3 years at different rates or equal rate.

There should be a table for the calculation here.

Even though it should be worked out here, but we had stated in the executive summary that depreciation is N1,000,000. We will keep to it.

What is important now is the estimation of turnover and cost of sales.

8.3 TURNOVER/REVENUE ESTIMATION:

Here there is need to make reliable forecast by month, quarter of the year and yearly too. We had estimated N40,000,000 as total turnover in the executive summary, and that is what we shall use.

The point I’m making is that it’s this part of the business plan that generates all those figures quoted in the executive summary. That’s why they must be shown clearly.8.3.1 COST OF SALES.

Here you must tabulate in quantity, price per unit etc. to give total purchases in say weekly, monthly and yearly. All other direct marketing expenses re brought in here. Carriage inwards is always part of the purchases. We had estimated this to be N25,000,000 in the executive summary.

8.4 INCOME STATEMENT

This is where you show whether the business is making business or not. In this our example, we will use the figures already derived to prepare this.

TABLE 4: Income Statement

Again, details of the admin expenses must be shown. Such expenses as auditors fees, consultants fees especially for writing this business plan must be indicated. Directors allowances, salaries and wages must be shown in details. That will help the financial analysis of the operations. If the admin expenses takes over 80% of the gross profit, it calls for re-examination.

We have been able to derive all the figures we expressed in the executive summary. One thing you must know is that the figures and all the expressions in the business plan must be coherent and in alignment with one another. No figure should be imposed any how without prove.

8.5 ACCOUNTING RATIOS:

This is a mathematical expression of how viable a business is.

8.5.1 GROSS PROFIT MARGIN: This shows the relationship between the turnover and the gross profit generated. In other wards, it shows if the cost of sales is too high in relation to the selling price.

Gross profit        X 100       that is       15,000,000      x 100 = 37.5% Turnover                                              40,000,000

Gross profit is sales less cost of sales.

8.5.2 NET PROFIT MARGIN:

= 7,000,000       x 100 = 17.5%

Net Profit x 100     i.e. 7,000,000 x 100 = 70% Capital employed      10,000,000

THREE YEAR BUSINESS PLAN

In addition, remember that this business plan is supposed to be for 3-year start-up. What I’ve done for this first year on operational expenses should be done for the other two years and presented in tabular form. Then the Income statement will also be presented in the same tabular form. This will enable appraisal of the business over the three years using the various financial ratios.

This is where we shall stop for this moment. All other elements of this business plan’ll be handled in my next write up on business plan feasibility studies. We are suppose to draw the balance sheet and the cash flow statement, and may be statement of changes in equity and other accounting statements. All of these we shall be dealing with later. You can make contacts for further questions or make comments through the comment platform in this website. You could follow us or like us by clicking any of the social media button above. For regular up-date on this website fill in the follow-by-email platform under this page.

In the beginning I highlighted the following business lines as possible businesses that are related to palm oil business.

 Then, Palm oil marketing. and

Palm kernel processing and marketing.

Furthermore,  what we have dealt with here today only relate to palm oil marketing. My promise is that I will handle them one after the other after the next topic ‘ business plan feasibility study’. Encourage me by sending feedback via the comment platform. You can ask questions which I could incorporate in the other write-ups. If you can write, do so; submit articles for publication in this blog through the submit article platform. Your article will be edited nd published in your name.

Deacon Anekperechi Nworgu, a seasoned economist who transitioned into a chartered accountant, auditor, tax practitioner, and business consultant, brings with him a wealth of industry expertise spanning over 37 years.

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• Published: 06 February 2023

Tropical agriculture

Reconciling oil palm and ecosystems

• Rebecca K. Runting 1 &
• Jessie A. Wells   ORCID: orcid.org/0000-0002-3555-5108 1  

Nature Sustainability volume  6 ,  pages 481–482 ( 2023 ) Cite this article

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Oil palm plantations can supplant once biodiverse tropical forests. As planted areas expand, it is vital to plan landscapes to better balance biodiversity and oil palm production. Strategic ‘set-asides’ offer a key approach.

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R.K.R. was supported by an Australian Research Council Discovery Early Career Research Award (DE210100492).

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Palm oil production and processing business plan in Nigeria

What We Covered In This Article

Overview of Palm Oil Production in Nigeria

Palm oil production is one of the major sources of income for Nigerians. In 2021, it was estimated that 1,280 thousand metric tonnes of palm oil were produced in Nigeria. This shows the immensity of the production of palm oil in the nation. Infact, Nigeria is one of the five nations, leading in the production of palm oil in the world. 

Palm oil production has to do with the extraction of edible oil from the mesocarp of the palm fruit, which is suitable for human consumption and is used in making various kinds of products and things.

Palm oil was one of the major sources of income for the Nigerian government in times past, before the discovery of crude oil. However, it is being focused on again, as the government is now investing a lot to revive that sector of the economy. 

Overview of Palm Oil Processing

The Palm tree is important, as many things can be derived from it, to be used by humans. To start with, palm fruits can be used to get palm oil, the stems can be made into woods for building, palm wine can also be tapped from palm trees as a form of refreshment, etc.

Now, Palm oil is gotten from palm fruits and there is an extraction process that takes place before the oil is gotten from the mesocarp of the palm fruit. The Palm fruits seedlings are planted, and after they have been harvested, the bunches of the palm fruit are threshed and sterilized, to get the palm fruits from them. 

Afterwards, the palm fruits are crushed, to extract the crude palm oil. This crude palm oil is then purified and dried before it can be put to use at home, in industries, etc. It can also be exported to other nations for exchange in international trades. 

Uses Of Palm Oil

Palm oil is used for various things and in various industries. It is used in the home, industries, etc. Palm oil is used in preparing meals, cosmetics, soap, animal feed, etc. The following expounds more on the uses of palm oil.

• Cooking: 

Palm oil is one of the important ingredients used in cooking meals of different kinds, ranging from soup, stew, sauce, etc. Different tribes use it for various meals, and it is a key part of the food industry. Palm oil is used to cook Egusi soup, Banga soup, oha soup, vegetable soup, beans, etc 

Palm oil is also used to fry food such as plantain, pepper, etc. It can also be used in making food items, such as pancake, cereal, chocolates, etc

• Drugs: 

Palm oil is also used in making drugs in the pharmaceutical industry. Due to the properties of palm oil, it is also very useful and effective in enhancing the bioavailability and solubility of drugs. And this helps drugs last longer by extending their shelf lifespan.

• Manufacturing:

Another important thing palm oil is used for is in manufacturing different things, ranging from cosmetics, snacks, margarine, stock cubes, detergents, candles, deodorants, shampoo, toothpaste, etc.

• Exportation:

Palm oil is also one of the important products used in trading between nations of the world. Nations like Indonesia, Malaysia, etc have palm oil as a major export product, which yields a lot of income for their economies.

• Feed production:

Palm oil is also used in the production of feed for animals and livestock, due to its heat-resistant and edible nature.

It is used in making feed for animals, ranging from dogs, cats, pigs, etc. Also, since it is good as preservatives, it helps to prolong the lifespan of feed, to help it stay longer on the shelf, before expiration.

• Preservation:

Palm oil is used as a preservative in many food items, ranging from human food to feed for animals. It is used in preserving food items to ensure that they don’t get spoiled on time. 

Requirements Needed To Start Palm Oil Business

In starting a palm oil business, there are many things required to be acquired to attain success. Some of them are as follows;

• Capital: 

Capital refers to the money used in starting the palm oil business, which would be used in purchasing the facilities needed to kickstart. 

Firstly, you need to purchase the land where you would plant palm oil seedlings. This could range from many acres to some hectares. It is important to get a large portion of land, to help you plant as many trees as possible.

You would also need capital to hire workers to work on the land, from the planting stage to the harvesting and transportation stage.

Some equipment and materials such as tractors, fertilizer, etc also need to be purchased to aid the planting process.

• Land: 

After securing the capital for the business, the next thing is to make the purchase of the land for the palm oil plantation. When buying the land for the plantation, it is important that the quality of the soil is examined, to ascertain that it would be suitable to grow palm trees. 

Now, If you are unable to determine the fertility of the soil by yourself, you can hire experts to do this for you. This is important, to ensure growth for the palm trees after planting.

Another key thing to consider when purchasing the land for your palm oil plantation is the closeness of the land to your buyers. This would make it easy to transport your palm fruits to customers, as at the due, without hassle.

Another requirement for your palm oil business is the labour that would be needed in planting, harvesting, and transporting the produce of the farmland.

You would need to employ extra hands to assist you in the work, and you would have to pay them.

• Storage: 

Another requirement for the palm oil business is the storage facilities needed to store and keep the palm fruits and palm oil, after being extracted and purified.

Storage facilities are very important for the palm oil business, to preserve the palm oil got, from the extraction mill. This is also important to protect them from getting spoiled before they get to their buyers.

• Transportation:

Another requirement for a palm oil business is the transportation facilities needed to transport your equipment, palm fruits, palm oil, etc to and from your palm oil plantation.

You could get trucks to help you transport things to and fro the plantation.

• Suppliers/Retailers:

Getting reliable suppliers to supply you with the needed equipment, palm fruit seedlings, and other things is also a key requirement to consider when starting your palm oil business.

Getting retailers who would buy directly from you to supply to consumers is also important, to ensure the smooth transfer of palm oil from your plantation to customers, in exchange for money.

Production season of palm oil:

The production season of palm oil differs from nation to nation. However, in Nigeria, the best time to plant palm fruit is during the rainy season, which is usually around June-September.

This is recommended so that the roots of the trees would have been well-rooted in the ground before the dry season comes in.

Now, an oil palm starts to produce about 3 to 4 years after it has been planted. So, patience is required as a palm oil businessman or woman. It is also important to not relent during this waiting period, as one would be required to tend the plant from time to. time, by removing weeds, and doing other things to enhance growth.

Where to get palm seedling for planting:

Just like for every other tree, to grow palm nuts, you need to first get the seedlings to plant. And this is the cheapest way because palm trees are rarely grown through cutting, layering, and other asexual means.

You can either get them from the seed pods of flowering palms or buy them. And these palm seeds differ in size. While some are small and bright red, some others are very large. 

Now, if you would like to get your seeds from your tree, it is advisable to get them immediately when they fall from the tree; showing that they are ripe. It is also important to use these seeds on time. This is because the lifespan of some of them is not long, however, for some, they can last for up to a year.

Now, you must test your palm seeds before planting them. This would help determine whether it would germinate or not. To test, simply put the seed in a container of warm water. Now, if the seed floats in water, it is not good for use. But if it sinks in the water, then it is good for planting.

Is the palm oil business profitable?:

The palm oil business is highly profitable, due to the many uses of palm oil, domestically and even industrially.

As a palm oil businessman or woman, there is always a huge demand for your product, as it is needed in high quantity and quality in nations, industries, families, etc. And although it is a capital-intensive business, its rewards and profits are far-reaching.

How much does it cost to start a palm oil business?

Starting a palm oil business depends on the type you want to venture into. To start a palm oil plantation business, you would need to purchase or rent some acres of land, and this would cost a lot. You would also need to buy palm fruit seedlings, and this would also require a lot of money, hiring manpower, machinery, etc also costs a lot.

On the other hand, if you were to start a palm oil extraction mill or sell palm oil directly, you would not spend as much as if you wanted to start a palm oil plantation.

Popular palm oil producing states

• Delta State
• Akwa-Ibom State
• Cross-River State
• Bayelsa State
• Rivers State

Types of palm oil business

There are three types of the palm oil business that one can venture into, as a palm oil business man or woman. They shall be discussed as follows:

• Palm Tree Plantation:

The first type of palm oil business is the palm tree plantation business, where you would be involved in planting and harvesting palm fruits. Here, you would be required to purchase or rent hectares of land to use in planting and harvesting palm fruits.

The palm tree plantation business is one of the intensive types of the palm oil business, which requires you to buy palm fruit seedlings, clear and make ready the land for planting, plant, monitor growth, and harvest at the end of a season.

It is quite capital intensive. However, its benefits are mind-blowing.

• Set Up A Palm Oil Extraction Mill:

Asides from setting up a palm tree plantation, you can decide to set up a palm oil extraction mill, where you would specialize in crushing palm fruits, to extract the palm oil from them.

This is also capital intensive as you would have to purchase machines for the crushing process, as well as hire manpower to make the work faster. Setting up a palm oil extraction mill is another type of palm oil business, which has huge benefits to be enjoyed.

• Sales Of Palm Oil:

Another type of the palm oil business is the direct sales of palm oil. This could be either large-scale or small-scale. When operating on a large scale, it is advisable to purchase directly from dealers who own extraction mills.

And if it is on a small scale, one can easily purchase from large-scale dealers or wholesalers.

How To Start a Palm Oil Business In Nigeria

To start your palm oil business, you need to sketch a plan to follow through, to ensure success in the business. The following steps can be taken to start the palm oil business in Nigeria:

• Choose The Palm Oil Business You Want To Invest In:

Having learned earlier that there are different types of the palm oil business that one can engage in, it is then important that you decide which of them you would be venturing into.

You could decide to set up a palm oil plantation, where you would plant palm trees and harvest for others to get palm fruits from. You could also decide to have an extraction mill, where palm fruits are crushed to extract the oil from them. Or rather, be involved in the direct sale of palm oil.

Whatever choice you make, you need to consider your capital, skill, interest, etc.

• Draft a business plan:

After deciding on the kind of palm oil business you would be venturing into, you should move forward to draft a business plan. 

Your business plan would include the kind of palm oil you intend to start with, the amount of capital needed, how the capital would be sourced, mode of operation, etc.

• Register Your Palm Oil Business With CAC:

CAC is the corporate body in charge of registering businesses in Nigeria. To make your business legally recognized by the law, you need to register the business under the business name you have chosen for it.

Registering your palm oil business with CAC also gives you access to some loan facilities, grants, and other national recognition.

• Set up your production factory or store:

Now, you can go ahead to set up your production factory or store, depending on the type of palm oil business you would be venturing into.

If you would be going into the direct sale of palm oil, you would not need a factory. But for an extraction mill, you would need a production factory, as well as storage facilities to store the palm oil, before you sell them.

• Secure suppliers:

Securing reliable suppliers is also important. As a palm tree plantation owner, you need to secure suppliers to supply you with palm fruit seedlings and other equipment.

Also, as a palm oil mill extraction business man or woman, you are to secure suppliers who own palm tree plantations, who would give you a steady supply of palm fruits to extract palm oil from.

• Plan for logistics and transportation:

Next up, you need to plan for logistics and transportation to enable you transport the palm oil and palm fruits out of your farmland and extraction mill respectively to people who need them

Transportation is an important aid to trade which is not to be trivialized. A smooth medium of transportation would ensure that your product leaves your factory on time, and gets to the consumers who need them.

• Market your products:

Now, after securing your transportation details, you are to market your product to prospective wholesalers and retailers who are in the palm oil business.

This is important to facilitate sales and get profits.

In preparing a business plan for your palm oil business, the following items must be included, featuring important details to help you attain success as a businessman or woman. 

The following elements shall be considered, to help you come up with a business plan for your palm oil business:

• Executive Summary:

The executive summary appears first in the business plan. However, it may be the last thing to be written, because it summarises all the details about the whole business plan.

The executive summary contains the amount of capital needed, work plan, estimated income over a period, estimate of labour required, etc.

• Company Description:

The company description contains information about the kind of business the palm oil establishment is. It talks about whether it would be a palm oil plantation business, a palm oil extraction mill, etc.

It also contains information about whether it is a one-man business (sole proprietorship), partnership, etc.

This segment of the business plan contains information about the individuals involved in the business. 

Here, their names and roles are spelt out, to aid comprehension.

Team members could include the Managing director, farmers, secretary, warehouse manager, etc.

• SWOT Analysis:

SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

This is a very important analysis to be done, which helps you identify your areas of strengths to capitalize on, weaknesses to work on, opportunities to explore, and threats to eliminate. 

Strength has to do with the areas where you have a better advantage, as a palm oil business owner. This is to enable you to capitalize on these strengths to get more profit. 

Analyzing your weaknesses helps you to know the areas you need to work more on, to get better results. Your weaknesses are also the areas that your competitors may want to take advantage of. So, you need to pay attention to them.

Opportunities refer to new areas or aspects of the palm oil business that you can take advantage of, to increase revenue and expand your network.

Threats refer to things that could pose danger to your business. It could be bad weather conditions, pests, etc. 

• Market Analysis:

Market analysis has to do with examining the market, to know what is in demand per time.

The market analysis would help you understand what consumers need, what kind of packaging appeals to them, how to market to them and how to get them to make purchases.

• Financial Analysis:

The financial analysis for your palm oil business carries details about how much would be needed to start and run the business.

Capital required to purchase land, machinery, palm fruit seedlings, storage facilities, labourer’s wage, salaries for other staff members, etc.

• Marketing Strategies:

This involves details about how you intend to market your product and move fully into the market, to sell.

Marketing can be done either through the traditional ways of connecting with retailers who deal in the palm oil business. It could also be through online marketing strategies, using social media, SEO, etc to market your products.

• Competitive Analysis:

There would always be competition in the palm oil industry. Hence, it is important to carry out a competitor analysis, to check your competitor’s weaknesses, to take advantage of it. 

You could also examine the strategies being applied by your competitor, which yields a lot for them and apply those strategies too, to get better in your business.

The appendix of your palm oil business plan includes additional documents that are not included in the body of the business plan. It could include charts, tables, graphs, and some other important elements, which are not yet included in the main body of the business plan. 

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