Are you about starting a palm kernel oil production business? If YES, here is a complete sample palm kernel oil production business plan template & feasibility report you can use for FREE.
Okay, so we have considered all the requirements for starting a palm kernel oil production business. We also took it further by analyzing and drafting a sample palm kernel oil marketing plan template backed up by actionable guerrilla marketing ideas for palm kernel oil production businesses.
So let’s proceed to the business planning section. Palm kernel oil is usually derived from pressing and extracting the oil from the palm kernel nuts through a press machine and then refined by a refining machine. After pressing, the palm kernel oil in its crude state becomes solid with a taste and smell, however, after refining, it turns into oil with a whitish or yellowish color and a neutral taste.
Palm kernel oil is vital for the production of many products such as soaps, chocolates, chewing gum, washing powder, lipsticks, margarine, coating, ice cream, noodles and bio-diesel. It is also widely used for cooking by some people and is not only cheaper than vegetable oils buts also has a higher saturated fat content which allows for a better and longer shelf life.
This is not just a newly discovered business but has existed for a long time, and is a real money spinner to entrepreneurs who are in it.
The market for this business is not only steady but it is a market that can never be saturated as there are no close substitutes to its use in many of the products that it is widely used in. if you intend going into the business, then you would need a business plan.
Below is a sample palm kernel oil production business plan;
A Sample Palm Kernel Oil Production Business Plan Template
1. Industry Overview
The palm oil fruit is one of the most important fruit crop globally because the benefits that is gotten from all parts of the tree, from the palm fronds, to the palm oil extracted from the fruits and the palm kernel oil extracted from the palm nuts.
There are two forms of palm kernel oil extraction; mechanical and traditional. While mechanical is easier but requires more machines, the traditional method is more labor consuming but requires fewer machines.
The demand for palm kernel oil has increased globally as more than 54 million tons were produced in 2011. The demand is due to the cheap nature of the oil for those who use it to cook, as it is a close substitute to vegetable oil, and has higher saturated fat that is close to the amount contained in coconut oil.
The demand is also spiked by those who manufacture cosmetics, candles, detergents, as well as food products due to its properties which make it very versatile in the industry, especially as it has a high melting point.
Globally, Malaysia is the highest producer of palm oil and is responsible for 44% of world exports. Malaysia started refining its crude palm oil in the early 70s which came about as a resolve of the country’s government to increase industrialization. Palm oil fruits mainly grow in countries that have rainforests such as Asian countries and African countries.
As at 2013, 55 million metric tons of palm oil was consumed globally, this was nearly four times of what was consumed two decades back. Asides Malaysia, Indonesia is the second highest producer of palm oil. The two countries meet 85% of global demand.
The increase in the demand for tropical oils in the united states started when in 2006, when the United States Food and Drug Administration, mandated that food labels listed Trans fats.
Trans fats was regarded as a major cause of heart disease and as such manufacturers especially those in the food industry started moving towards the use of palm oil and palm kernel oil in its products, especially as the benefits of the oil to the heart and brain were expounded by a renowned doctor.
There however have been setbacks for this business as more health conscious organizations are advocating for the boycott of palm oil and its by-products and advocating instead for the use of organic palm oil in products especially consumable products.
This is due to the fact that palm oil producers in a bid to make profit are not transparent, do not observe strict environmental standards and practice unfair labor policies. Also, oil palm plantations is said to be gradually destroying the rain forest and the different species found there.
There are some consequences to producing oil palms which are deforestation and habitat destruction, but this has however not made the few replaceable alternatives attractive enough for most of the food and industrial manufacturers, as even the alternatives will lead to more destruction to the forests and climates.
Also, the alternatives do not have a sustainable nature like the palm kernel oil and might not be able to meet the growing global demand.
Several companies have begun to take the warnings of environmentalists seriously by changing to sustainable palm kernel oil which use ingredients that have sustainable sources such as certifiable sustainable palm and palm kernel oil. Others have started using segregated or mass balanced palm kernel oil.
2. Executive Summary
Henai Palm Kernel Oil Inc is one of the foremost leading palm kernel oil extraction companies in Brickell Avenue, Miami, USA that caters to mostly domestic, commercial and industrial clients. We deal in the extraction of palm kernel oil from crushed palm kernel nuts into a crude or refined state depending on the requirement of our numerous clients.
We also sell the by- products gotten after extracting and refining the crude oil, while also offering consultancy services to start-ups who want to venture into the palm kernel oil extraction business as well as for research purposes.
Our aim of establishing this business is to favorably compete with other palm kernel oil extracting companies both in Miami and in the United States as a whole.
One of our major corporate goals is to be a renowned brand known for transparency and good work ethics, this we can do by crafting a sound corporate culture for the company and also recruiting and giving out continuous training to the best professionals in the industry who not only believe in our vision but would also project the image of the company positively through their interactions with our numerous existing and potential customers.
Our extraction machines are intended to be one of the best as we have procured the best crushing, extraction, and refining machines available.
We also have processes and structures in place so as to be able to extract our palm kernel oils under the best standards possible. Our packaging methods will be done with the hygiene of our customers in mind, as there are plans in place to ensure that we become the best there is.
Henai Palm Kernel Oil Inc intends to set a standard when it comes to how palm kernel oil will be produced not only in Miami but also throughout the United States as well.
We intend to not only recruit the best hands possible but to also ensure that they always undergo continuous trainings so as to achieve productivity efficiently. We also intend to engage our stakeholders so that they could participate in the growth of the business.
After a thorough research into the market, we have found that the demand for palm kernel oil both for home, commercial and industrial purposes will continue to increase as the year progresses. Due to this vital information, there are plans in place to ensure that we maintain the best distribution network that will ensure that all our products can reach our numerous clients.
To allay the concerns of environmentalists and provide our own quota towards preserving the rain forests, we at Henai Palm Kernel Oil Inc. intend to ensure that we integrate business practices that are of a high and sustainable standard wherever possible.
We seriously intend to consider switching to sustainable palm kernel oil which use ingredients that have sustainable sources such as certifiable sustainable palm and palm kernel oil in the nearest future.
At Henai Palm Kernel Oil Inc, we intend to ensure that our palm kernels are sourced from trusted and reliable vendors who also engage in the best practices possible. Sourcing from reliable vendors will allow us to be able to continue with our sustainable approach.
Henai Palm Kernel Oil Inc. is established and owned by one of the topmost entrepreneurs in Miami, Mr. Sam Jack. Sam Jack has a B.Sc in Food Science Technology and a Masters Degree in Business Administration from a prestigious school.
He has received several entrepreneurial awards and not only has the required experience to run this business but to also hire the right professionals who will help run the business.
3. Our Products and Services
Henai Palm Kernel Oil Inc. deals in the extraction of palm kernel oil from palm kernel nuts. We are established to cater largely to commercial and industrial clients via our production plant.
We are established to make profit legally as permitted by the laws of the United States; however we also believe in creating multiple sources of income and as a result, we intend to sell the by-products gotten after extracting and refining the palm kernel oil.
Listed below are some of our products and services;
- Refined Palm Kernel Oil (PKO)
- Crude Palm Kernel Oil (CPKO)
- Palm Kernel cake for animal feed production
- Palm kernel sludge
- Crushed palm kernel shell for bio-fuel
- Consultancy services
4. Our Mission and Vision Statement
- Our vision is to be a renowned palm kernel oil producing company and be known not just in Miami but globally as well.
- Our mission is to ensure that we build a palm kernel oil production company that meets with best practice internationally while also meeting with the demands from our existing and potential customers not only in Miami but in the United States as well.
Our Business Structure
One of the major plans we intend to achieve in building our palm kernel oil production company is to ensure that we recruit the right people for the right position. Also, we intend that those we recruit get in tune with our vision, goals and objectives and successfully apply that in relating with our clients.
Getting the best hands is not only necessary for the now, but also for future growth and expansion. We want the people who will be able to help us grow and also sustain the growth we have achieved by constantly moving the company at a steady space.
This cannot be achieved however, if we don’t also invest in training them and also ensure that they have the best welfare possible.
Due to the fact that we intend to sell other products in addition to our main product – palm kernel oil, as well as provide other services as well. We also intend to ensure that the right hands able to handle the refining and sale of these different products effectively.
Below id the business structure for Henai Palm Kernel Oil Inc;
- Chief Executive Officer
- Plant Manager
- Production Floor Supervisor
- Purchasing Manager
- Human Resources and Admin Manager
- Marketing Executives
- Truck Drivers
- Customer Care Executives
- Maintenance Team
- Security Guard
5. Job Roles and Responsibilities
Chief Executive Officer (CEO):
- Formulates policies for Henai Palm Kernel Oil Inc.
- Oversees all the operations and departments of the company
- Communicates the company’s culture and value to the management staff
- Responsible for high negotiation deals with clients and investors
- Works closely with production floor supervisor to ensure the successful day-to-day operation of the facility
- Responsible for all the manufacturing personnel hired and coordinates their training
- Monitors production expenses and seeks for ways to reduce cost without reducing quality
- Responsible for developing and ensuring that the plant manufacturing budgets are executed
- Works with the purchasing manager to ensure that purchase orders are created and placed
Production Floor Supervisor:
- Responsible for decision on resources requirement
- Responsible for maintenance of equipment
- Monitors the production processes and adjusts schedules accordingly
- Responsible for ensuring that production is cost effective
- Responsible for drafting a timescale for each task
- Responsible for drafting and executing purchasing strategies
- Responsible for seeking reliable vendors and suppliers
- Responsible for monitoring and also predicting demand levels
- Determines delivery quantity and timing
Human Resources and Admin Manager:
- Responsible for communicating policies regarding employee benefits, compensation as well as employment opportunities to staff
- Responsible for recruiting, hiring and giving orientation to employees so as to ensure they align with company’s goals
- Carries out performance appraisal of employees within the organization to ensure that adequate compensation packages are allotted
- Prepares the budget for the human resources and admin department
- Works directly with the Chief Executive Officer
- Responsible for the preparation of profit and loss statements on behalf of Henai Palm Kernel Oil Inc.
- Ensures that the company accounts as well as its tax returns are not only prepared on time but filed accurately
- Helps in ensuring that budgets are produced and implemented
- Critically analyze the budget as well as other financial information and give advice on where savings could be applied
- Works hand in hand with the Chief Executive Officer
- Responsible for contributing to, drafting marketing strategies and reviewing them whenever possible
- Responsible for the maintenance and up-to-date records of customer databases
- Evaluates marketing campaigns and managing the marketing budget
- Manages the production of marketing materials and ensuring its effective distribution
- Manages existing customer relationships and continually communicating with target audiences to source for potential customers
Customer Care Executives:
- Ensures that they are familiar with the company’s products and services and the benefits of each to the customer
- Responsible for order processing, and satisfaction of customer needs in a satisfactory and professional manner
- Takes orders, resolves complaints, provide information and answers inquiries from clients
- Keeps accurate records of company’s customers in such a way that it can be easily retrieved when necessary
- Develop and constantly review plans and strategies for customer support
- The maintenance team must ensure that the machineries are all performing efficiently and effectively
- Responsible for carrying out corrective maintenance on machineries
- Monitors new technologies and machineries
- Arranges for replacements of needed parts
- Keeps plant manager and floor supervisor informed of defects and or progress
- Ensures that driving activities logbook is maintained so as to show compliance with federal regulations
- Responsible for keeping record of vehicle inspections
- Ensures that truck is equipped with standard safety equipment
- Supervise the loading and unloading of cargo
- Ensure that the route is planned in accordance with delivery schedule
- Protects the facilities of Henai Palm Kernel Oil Inc. and also its staff by ensuring that the environment is safe and secure
- Takes note of unusual occurrences and take prompt lawful action as required
- Ensures that the entry and exit access of the facility are adequately monitored and controlled
- Takes random or regular patrols around the buildings or its perimeter
- Responsible for monitoring surveillance equipment
6. SWOT Analysis
Becoming a renowned business means striving and attaining excellence. Our desire for excellence cannot be disputed and it is due to this that we have with the help of our hired business consultant gone through our proposed business structure and concept to critically evaluate the business which we have intended to go into.
Our evaluation was done to determine if the business was a worthwhile venture that required all the desired investment and resources that were needed.
The evaluation clearly allowed us see our strengths and how we can use it to our advantage; our weaknesses and how we can turn them to strengths; the opportunities which avail themselves to us; and the threats likely to be faced during the course of running the business. Below is what was revealed from the critical evaluation carried out on Henai Palm Kernel Oil Inc.
Our strength stems from the fact that we are not focusing on the sale of refined palm kernel oil alone but also in the sale of its by-products as well. Also, our location is convenient for our target market as there are good road networks into and out of our facilities.
Another factor is our large machineries which are built to withstand the numerous demands that might triple at certain points in time. Also, our competent workforces who have aligned themselves with the vision, goals and objectives of our company are the finest professionals in the industry.
Even though this market is not regarded as a saturated one, we might not effectively be able to compete against already established palm kernel oil production companies in Miami especially those located close to us. However, our marketing strategies have been carefully drafted to be able to overcome this weakness.
The opportunities that abound in this market are unlimited as almost everyone consume or use products that have palm kernel oil in it on a daily basis. This also means there will be more innovative entrepreneurs willing to enter the market and explore the money making opportunities that abound there. Our consultancy services have us already poised to take advantage of this market.
Every business is faced with threats either during start up or during the course of running the business, and our business is no different. We will be faced with threats from environmentalists, unfavorable government policies, as well as stiff competition from our competitors.
7. MARKET ANALYSIS
- Market Trends
The market trend for the palm kernel oil is one of continuous demand, especially as there is a huge population growth that uses all the products which make use of palm kernel oil in its manufacture. While there are few substitutes available to replace this oil, they cannot meet the continuous increase in demand for palm kernel oil in many years to come.
Another trend is in ensuring that we stay above competition by ensuring that we always go the extra mile in factors such as conducive facility and environment, and a competent workforce. This will ensure that our customers have the confidence in our practices and our ability to deliver satisfactory products.
Finally, we can ensure that we are in as many strategic locations as possible, as this will allow us create a very loyal client base. Also, asides being physically close to our customers, we intend to use the internet to achieve the same closeness, by always informing them of the availability of our products.
8. Our Target Market
From available research, we know that there is a wide range of customers available. This means that our target market isn’t just limited to just a certain group of people but cuts across everyone since it is used in almost all products being used by people.
This has enabled us to effectively map out strategic locations all around Miami so that we can effectively be positioned to serve all our numerous clients.
Due to reliable facts and statistics, in addition to a professional market research by our hired business consultant, the right strategies have been effectively drafted for our target market. Our target market is only limited to those with which we would be engaging in wholesale distribution with;
- Soap Manufacturers (small, medium and large scale organizations)
- Cosmetic industries
- Food industries
- Animal feed industries
- Bio-diesel industrial plants
Our Competitive Advantage
Our intention to become one of the most renowned palm kernel oil making businesses in Miami as well as in the United States of America in a few years time means we need to draft strategies that will allow us have a competitive advantage over our counterparts in the agro processing industry.
Our first competitive advantage is in ensuring that we provide the best customer services to our numerous customers. This we can do by employing the most competent professionals who will ensure that our customers’ inquires are answered in a timely manner, and that complaints are handled as quickly as possible.
We also intend to ensure that we pick the right management team that will align with the vision of the Chief Executive Office and in like manner coordinate the lower end staff in such a way that the goals and objectives of the company is achieved.
Providing a conducive working environment for our employees is a must as we would like them to be able to work in an environment that would enhance their productivity and efficiency whilst ensuring that they grow their careers as well.
Finally, in order to have a competitive advantage over our competitors, we would like to ensure that our website is well optimized for search engines and that the website itself is interactive for our clients.
9. SALES AND MARKETING STRATEGY
- Sources of Income
Henai Palm Kernel Oil Inc. is a business that is established with the aim of making profit both in Miami and the United States of America. Our intention of making profit will come from our sales of different products and services to our wide range of customers.
Henai Palm Kernel Oil Inc. will therefore generate income from the sale of the following products;
- Refined Palm Kernel Oil (PKO)
- Crude Palm Kernel Oil (CPKO)
- Palm Kernel cake for animal feed production
- Palm kernel sludge
- Crushed palm kernel shell for bio-fuel
- Consultancy services
10. Sales Forecast
Carrying out the right sales forecast is very necessary for the growth of any business as it would enable us make the necessary right predictions for our palm kernel oil sales.
Our sales forecast have shown that we are favorably positioned to not only become a leading brand in Miami but also in the whole of the United States as a whole. Also, the forecast have shown that our palm kernel oil production business is going to be profitable in its first year of business.
Our sales forecast were based on several researches carried out by our hired business consultant based on our strengths and the opportunities we are presenting to the industry as a whole. Our sales forecast were not carried out in isolation, as palm kernel oil start-ups, especially those in Miami were considered.
Below are the sales projections for Henai Palm Kernel Oil Inc. based entirely on our location, the agro processing market as well as the industry as a whole.
- First Fiscal Year-: $600,000
- Second Fiscal Year-: $1,800,000
- Third Fiscal Year-: $3,500,000
N.B: The above projections are based on certain conditions that are static for now and could either change positively or negatively at any given point in time.
- Marketing Strategy and Sales Strategy
The aspect of marketing is one of the most important strategies that is usually drafted during the course of starting any business; this is because marketing serves a dual purpose, such as revenue generation as well as increased publicity for the business. It is of essence that marketing strategies are constantly reviewed and fine tuned so as to attain the best possible strategies for use.
Marketing these days make use of different methods to achieve the aim of attracting more customers to a business. Technology for instance, has come to play a huge role in marketing as people can use the internet to search for our website to either place orders, make inquiries or check out our products and services. This means that any marketing team must put the internet into consideration when drafting marketing strategies.
Due to the overwhelming nature of marketing, we hired experts who have a great understanding of the market as well as the industry at large to collaborate with our marketing team in ensuring that we have the best strategies to capture a large percentage of the market that can be used to generate revenue for our company.
Our marketing team has been empowered via our goals and objectives to deliver the corporate sales of the company through the sale of our products and services. Henai Palm Kernel Oil Inc. intends to adopt the following marketing approach as regards the sale of our palm kernel oil and its related products;
- Introduce Henai Palm Kernel Oil Inc. to commercial and industrial businesses and plants here in Miami by visiting their facilities and meeting with the management
- Launch a unique grand opening that will create awareness in the public regarding our company
- Advertise our various products and services in newspapers (local and national), and on radio and television stations
- Engage in direct marketing
- Ensure that Henai Palm Kernel Oil Inc. is listed in relevant directories and yellow pages
- Use our website to vigorously promote our products and services
- Place our billboard strategically in conspicuous places around Miami
11. Publicity and Advertising Strategy
A company might be doing the right things but without publicity, most of its activities are likely to go unnoticed. No matter how long a company has been established, there is the need for it to engage in continuous publicity. At Henai Palm Kernel Oil Inc., we intend to explore all means of publicity in order to increase public awareness of our company.
In generating publicity, we intend to use all available means both conventional and unconventional in order for people to know about our main product, palm kernel oil and its by-products as well as several other services we might be engaged in. we intend for the publicity to boost our awareness not only in Miami but also in the whole of the United States of America as well.
Below are several of the platforms we intend to use in achieving our aim of publicity for our products and invariably Henai Palm Kernel Oil Inc.;
- Participate in community programs to raise awareness of the benefits of palm kernel oil
- Support the preservation of rain forests by participating against illegal felling of trees as well as destruction for homes for oil palm plantations
- Use our official website to increase awareness about our efforts in donation causes
- Place adverts on newspapers, radio and on television
- Use our social media platforms such as Facebook, Twitter, and LinkedIn to engage the audience with informative articles.
- Network with other palm kernel oil producers as well as palm oil plantation owners who engage in standard practices.
- Make use of attractive looking billboards and then placing them in strategic locations
12. Our Pricing Strategy
Setting the right price is a very important component of any business, as this will determine how the business will fare, and if it will grow or regress. When it comes to the prices to be set for our palm kernel oil and its allied products, we intend to check what rates our competitors are using and then averagely use the same rate. This means we might not need to carry out extensive researches looking for strategies that would enable us set the right price.
Even though we will continuously seek out ways we can give our customers the right pricing; we however, will not choose a price that will hurt our overheads or one that will be below our cost of running operations. We however might choose to run on low profit margins during our first three months of business, as a way of encouraging clients to patronize us.
- Payment Options
We know our customers abhor payment options that are stringent in nature. Knowing how important clients are and how it is essential that they are satisfied with our services, we have plans for different payment options that will suit all our different classes of clients.
Our available payment options are listed below;
- Payment via banks
- Payment via online bank transfer
- Payment via checks
- Payment via bank draft
The above payment platforms were carefully chosen in conjunction with our bank which has the best platform that will ensure our customers have the best experience possible.
13. Startup Expenditure (Budget)
Starting a palm kernel oil production company is capital consuming as the bulk of the capital is used to purchase the required machines that will allow for a smooth production. Asides purchasing machineries and the truck needed to transport these items to various places, the capital is also used to pay employees salaries, utility bills and stock for at least a specified period of time.
The major areas where we intend to spend our start-up capital include;
- Incorporation and other legal fees – $1,000
- Obtaining of licenses and permits – $750
- Operational cost for the first 6 months (which includes employees salaries and utilities bills) – $200,000
- Insurance (general liability, workers’ compensation, and equipment insurance) – $3,000
- Cost of palm kernel oil machines (shell breaking machine, separating machines, pressing machines and refining machines) – $70,000
- Purchase of truck for palm kernel oil distribution – $50,000
- Raw materials (palm kernel nuts) and packaging materials – $20,000
- Marketing budget and promotion expenses for the launching of Henai Palm Kernel Oil Inc. as well as for a running period of six months – $10,000
- Cost of hiring business consultant – $3,000
- Other start-up expenses (stationery, computer, printer, phones, furniture) – $10,000
- Storage equipment (shelves, bins, racks) – $11,000
- Cost of launching an official website – $800
- Cost of factory launch – $5,000
- Miscellaneous – $15,000
From the above estimate, we would need the amount of $400,000 in order to successfully set up our palm kernel oil company in Brickell Avenue, Miami.
Generating Funding/Startup Capital for Henai Palm Kernel Oil Production Business
Henai Palm Kernel Oil Inc. is a business that is owned and operated by Mr. Sam Jack. Mr. Sam is willing to allow external investors who have the same vision to have a little stake in the company. In sourcing for capital, he has decided to use the following available sources.
Below are the sources where we the start-up capital will be generated from;
- Generate capital from private investors in exchange for shares
- Source for loans from banks
- Generate capital from sale of his stocks
N.B: From sale of personal stock, Mr. Jack has been able to generate $150,000. He has gotten a loan of $150,000 from the bank and is currently in the final stages of obtaining a loan from a private investor to the tune of $100,000.
14. Sustainability and Expansion Strategy
Every serious business person knows that to sustain the business, the loyalty of the customers must be high, the competence of the staff must be second to none, the structure of the business must be sound, and the corporate culture of the company must be stable. These are the factors that if properly crafted and deployed will ensure that the business continues running for as long as it should.
Every business is run to ensure that the business grows to an extent of making enough revenue that can be used to run the business without the need to inject external sources. This is why the marketing team is a very important one as they do not only ensure that the company is positively promoted but also ensure that the company makes enough revenue to remain healthy.
To ensure that our staffs are well motivated, Henai Palm Kernel Oil Inc. will make sure that the welfare packages and other benefits are not only made readily available to the employees but that they are better than what competitors are offering their employees. This will make our employees productivity rate improve thereby resulting to a healthy bottom line for the company.
These strategies if well implemented will ensure that we get and also retain the best hands in the industry, and will also ensure that these best hands remain committed to the vision, goals and objectives of the business.
- Business Name Availability Check:>Completed
- Business Registration: Completed
- Opening of Corporate Bank Accounts: Completed
- Securing Point of Sales (POS) Machines: Completed
- Opening Mobile Money Accounts: Completed
- Opening Online Payment Platforms: Completed
- Application and Obtaining Tax Payer’s ID: In Progress
- Application for business license and permit: Completed
- Purchase of Insurance for the Business: Completed
- Conducting feasibility studies: Completed
- Generating capital from family members: Completed
- Applications for Loan from the bank: In Progress
- Writing of Business Plan: Completed
- Drafting of Employee’s Handbook: Completed
- Drafting of Contract Documents and other relevant Legal Documents: In Progress
- Design of The Company’s Logo: Completed
- Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress
- Recruitment of employees: In Progress
- Creating Official Website for the Company: In Progress
- Creating Awareness for the business both online and around the community: In Progress
- Health and Safety and Fire Safety Arrangement (License): Secured
- Opening party / launching party planning: In Progress
- Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress
- Purchase of trucks: Completed