The coconut oil production business is largely promoted as one of the most profitable small-scale production businesses any entrepreneur can venture into in Nigeria since the producer doesn’t undergo the common risks and the high cost of production associated with other types of businesses.
Coconut oil is majorly produced in countries like India, Indonesia, and the Philippines. But in countries like Nigeria, the coconut oil market is still in its infancy but experiencing steady growth.
There has been an exponential build-up in the demand for coconut oil in Nigeria since the year 2006, because of its widespread health benefits. This constant-growing demand has attracted a lot of Nigerian producers to quickly get involved in the sector since great-sales potentials abound in its production.
According to a Statista report, in 2015/16 the global export volume of coconut oil amounted to 3.32 million metric tons, while In 2017/18 the global production volume of coconut oil was forecasted to amount to about 3.44 million metric tons, whereas Nigeria alone was estimated to have produced approximately 246,000 metric tons of coconut oil in 2017 alone.
This figure shows that the production in line with the demand for coconut oil has grown steadily over the years, with Nigeria experiencing leaps in the worldwide ranking of coconut oil producers.
What Is The Coconut Oil Production About?
Coconut oil is an edible oil extracted from the kernel or meat (copra) of mature coconuts harvested from the coconut palm. It has various applications, and because of its high saturated fat content, is slow to oxidize, and thus, resistant to rancidity, causing it to last up to six months at 24 °C (75 °F) without experiencing any form of spoilage.
Business Opportunities in Coconut Oil Production around the World
From soap manufacturing to haircare, and much more, the opportunities and diversity potential of any Coconut oil production business remains vast.
Here are some business opportunities in the Coconut oil production business in many places around the world including Nigeria or Africa as a continent:
1). Soap Manufacturing:
Coconut oil can be an important base ingredient for the manufacture of soap. It is more soluble in hard water and saltwater than other soaps allowing it to lather more easily. A basic coconut oil soap is clear when melted and a bright white when hardened and can be used as a skin moisturizer.
Topically, coconut oil is important for the skin, it’s great for soothing dryness and evening irritation from rashes. It is also good for fighting wrinkles and signs of ageing. Some skin ailments like psoriasis and eczema can be taken treated with coconut oil, along with simple activities like removing makeup in the eye without the use of chemicals.
The health benefits of coconut oil cause a lot of people to go in search coconut-oil based soaps, in the process, making it a lucrative business to venture into.
2). Haircare Manufacturing:
Coconut oil is rich in antioxidants and has antiviral, antifungal, and antibacterial properties. When used on human hair, it improves the scalp health, fights various infections and fungus, and supports general hair growth, all while adding a beautiful shine without the common harmful chemicals.
It is useful to the hair for treating dandruff, hair growth, hair styling, and also for lice prevention and treatment.
High-quality hair creams made with coconut oil are always in high demand. You can take advantage of the market’s preference for this and manufacture slightly low priced, but good quality oil to gain quick market acceptance.
Facts and Benefits Of Coconut Oil
- Coconut oil is easy to digest and protects the body from insulin resistance.
- Coconut oil is a great skin softener and helps you do away with dry and hard skin conditions
- Coconut oil can also be used as a makeup remover
- Coconut oil benefits digestive disorders including irritable bowel syndrome and microbial related tummy bugs.
- Coconut oil is made up of healthy fats lauric acid, caprylic acid and capric acid which contain antifungal, antibacterial, antiviral prosperities to boost the immune system.
- Coconut oil prevents high cholesterol and blood pressure levels.
- When applied to infected areas, coconut oil forms a chemical layer that protects the infected body part from external dust, air, fungi, bacteria, and viruses.
- Coconut oil is rich in many proteins. These proteins keep skin healthy and rejuvenated, both internally and externally.
- Coconut oil is rich in Vitamin E, which is essential in skincare.
- Coconut oil prevents premature ageing and wrinkling of the skin since it has good antioxidant properties.
- It is believed that coconut oil plays an instrumental role in reducing the viral susceptibility of HIV and cancer patients.
- Coconut oil contains saturated fat.
Types of Coconut oil (VCO)
1). Virgin coconut oil (VCO):
This type of coconut is made from fresh coconut meat (copra). It contains 10 fatty acids that enhance human immunity and protects people against germs throughout the day.
The VCO is usually extracted from freshly grated coconut meat (copra) through mechanical means which are free from high heat and chemical to preserve its full nutritional values. It’s best commonly used in cooking or even as dressing in a salad. You can also eat it on its own or apply to your skin to keep it soft and moisturized.
Virgin coconut oil is abundant in minerals, vitamins, and antioxidants, and is considered the purest type of coconut oil.
2). RBD coconut oil – Refined bleached and deodorized:
The RBD coconut oil is colourless, tasteless and odourless. And since it is refined coconut oil, it has more nutritional values than the virgin coconut oil, since the VCO is the oil coconut oil that is not refined.
They are extracted from copra and then heat and chemical solvents (hexane) are applied to process the oil to remove all forms of impurities, taste, and smell.
There is also some better quality RBD coconut oils available where the manufacturer cold-pressed to extract the oil from dried coconut flakes without the use of chemical solvents, and then apply a steam process to bleach and deodorize the oil.
3). Pure coconut oil (PCO):
The pure coconut oil (PCO) is often yellowish or even brownish in colour. They are usually labelled as premium quality or 100% pure edible oil, which in fact, is of inferior quality. The discolouration and stickiness of the oil is a great feature that says it all.
It is made in a fairly unhygienic condition where the workers expose the coconut meat to moulds when they sun-dry, kiln-dry, or smoke-dry the coconut meat in an open space. They then extract the oil from the mouldy copra (i.e dried coconut meat) and use cheap filtration techniques to refine the oil.
The PCO has a short shelf-life of usually 6 months to 1 year and turns rancid easily due to its poorly-manufactured condition.
4). Fractionated Coconut Oil (FCO):
The fractionated coconut oil (FCO) is simply a fraction of the entire oil. After the oil is extracted, it undergoes hydrolysis by adding water to the oil. After hydrolysis, it further undergoes fractional distillation, which means that the oil is separated into different fractions based on their properties.
In the case of the fractionated coconut oil, the fraction that is collected is the one that has medium-chain triglycerides.
Fractionated coconut oil has a longer shelf life than the Virgin Coconut Oil and does not smell of coconuts at all. The several uses of the FCO include:
- As a super-fatting oil in soaps.
- In skin-care lotions.
- In massage oil blends (famous for not staining the sheets).
- As a carrier oil for essential oils, vitamins, and actives.
- In medicines due to its antiseptic and disinfectant properties.
Setting up your Coconut oil Production Factory
1). Choose A Type Of Coconut Oil:
As earlier mentioned, there are about four or more types of coconut oil that can be produced. The virgin coconut oil is one of the most popular, but depending on your business location, it may not be the best option for you to go with.
Choose a coconut oil that is in high demand where your business is operating in and focus on growing a successful business around that.
2). Create Your Formula:
After choosing the type of coconut oil you want to produce, the next step is to create a formula for it. Each coconut oil formula is different from the next. You’d then need to study the nutritional requirements of each coconut, so you can determine how best to produce the oil.
Some basics that could make up your coconut oil include coconut meat (copra), lauric acids, and linoleic acid. Making coconut oil from a good mixture of some of these will result in a highly nutritious product.
But it’s best for you to attend a series of workshops and training on how to make high-quality coconut oil, so you can get the best results.
3). Purchase And Mix the Coconut oil Ingredients
One of the most important ingredients used in the production of coconut oil is well-dried copra with a moisture content that does not exceed 6 per cent. It is then further cut into very small chips in a copra cutter. The chips are further put into steam kettles and cooked lightly at a temperature of about 70oC for a minimum of 30 minutes.
After cooking the copra, it is then put into the expeller continuously and pressed twice. The oil from the first pressing and the second pressing is then collected in a tank provided separately.
The filtration process of this oil is done by means of a filter press and stored in MS tanks
4). Get Feed Equipment & Machinery:
Some very important Coconut oil equipment and machinery you should acquire in other to achieve maximum output are:
- Copra Cutter
- Bucket elevator
- Steam jacketed kettle
- Oil Expeller
- Screw conveyor
- Crude coconut oil storage tanks
- Filter press
- Filtered oil storage tanks
- Volumetric filling machine
- Baby boiler
- Wooden storage drums
5). Package Your Coconut Oil:
After manufacturing the Coconut oil, it should be packaged right for its target market. It is always crucial to follow or improve upon the packaging standards of the most successful products in the market. When you do this, the look and feel of your product packaging will trigger a quality impulse anytime a person sees your product in the market for the first time.
Bulk packaging can be done in tin containers. But HDPE containers and polymeric nylon are used for small consumer packs. The quality of your copra is ultimately related to the quality of your coconut oil.
6). Market The Coconut Oil:
To sell your coconut oil feed, there are many ways you could go about it. Some of these are:
- Building a periodic supply chain to stores
- Owning a distribution outlet
- Building a 0n-field sales team
And much more.
Challenges Of Coconut Oil Production
The challenges of coconut oil production in Nigeria, Africa or many other places around the world mostly ranges between these listed below:
1). Lack of experience.
2). The high cost of production.
3). Low consumer purchasing power.
4). Lack of finance
5). Poorly managed supply chain.
While there are several agribusinesses that have high potentials for profitability, Coconut oil production is a great one to venture into, if executed at the right scale with a broad diversity in coconut oil produced and sold both locally and for exports.
What are your thoughts on how to start coconut oil production in Nigeria? Let me know by leaving a comment.