BUSINESS PLAN ON OIL PALM PLANTATION

SUBMITTED BY

IKUEJAMOYE ADESOLA B.
PHA/2012/070
DEPARTMENT OF CROP PRODUCTION AND PROTECTION

TO
THE DEPARTMENT OF AGRICULTURAL ECONOMICS
OBAFEMI AWOLOWO UNIVERSITY, ILE-IFE.

March, 2021.
Table of Content Page
1. Cover page ____________________________________ 1

2. Table of Content _________________________________ 2

3. Business Description _______________________________ 3

4. Industry Overview _________________________________ 4

5. Executive Summary ________________________________5

6. Our Products and Services __________________________ 6

7. Our Mission and Vision Statement ____________________ 6

8. Job Roles and Responsibilities _______________________ 7

9. SWOT Analysis __________________________________ 10

10. MARKET ANALYSIS _______________________________ 12

11. Our Target Market __________________________________ 13

12. SALES AND MARKETING STRATEGY ________________ 14

13. Sales Forecast ____________________________________14

14. Publicity and Advertising Strategy _____________________ 16

15. Generating Startup Capital For Pison Farms________________ 17

16. Financial Analysis ________________________________ 18

17. Conclusion ____________________________________ 19

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 BUSINESS DESCRIPTION

Business name PISON FARMS

Business Address 26, Temenu Okitipupa,

Ondo State

Years in Business 2years

Business Owner Ikuejamoye, Adesola

Bussiness Owners Phone No. 07063268768

Start-up Capital N500, 000

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 INDUSTRY OVERVIEW

The oil palm processing industry is an industry that thrives in the African continent
and in some parts of Asia. Nigeria is one of the countries in Africa that have loads of
players in this industry. Although locals in rural communities run this type of business
on a small scale, there are medium to large scale investors who also operate
standard oil palm plantation and palm oil processing businesses.

These are the organizations that own their own palm tree plantations and also
engage in the exportation of palm oil to countries across the world. In most cases,
they ensure that they target countries with robust African communities.

Palm kernel is gotten from palm trees and it is the palm kernel that is processed into
palm oil. Palm oil is considered to be one of the healthy and vitamin packaged oils
that are highly suitable for cooking. In Nigeria, palm oil is used for several delicacies
and even for frying. Palm oil is also used in making soap and body creams.

The oil palm plantation line of business is indeed thriving and pretty much active in
Africa, Asia and South America (places with god numbers of African communities)
and it generates several millions of US dollars annually. This line of business is
responsible for the employment loads of people directly and indirectly all around the
world.

Any aspiring entrepreneur that is considering starting an oil palm plantation business
whether on a small or large scale should ensure that he or she conducts thorough
market survey and feasibility studies so as to get it right. The truth is that this type of
business does pretty well when it is strategically positioned.

It is important to secure a farmland in a location with soil composition that is highly

suitable for the cultivation of palm trees if indeed you want to achieve bumper
harvest and maximize profits in this line of business.

In a nutshell, oil palm plantation is a profitable business venture and it is open for
any aspiring entrepreneur to come in and establish his or her business; you can
choose to start on a small scale cultivating palm trees on few hectares of land or you
can chose to start on a large scale with massive land mass for your oil palm
plantation and even running a palm oil processing plant and with robust palm oil and
palm kernel distribution networks all across Nigeria, Africa and the global market.

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 EXECUTIVE SUMMARY

PISON FARMS is a standard oil palm plantation business that will be based in
Okitipupa, Ondo State, Nigeria. We are registered under the Nigerian Corporate
Affairs Commission (CAC). Although we intend starting out on a small scale by
cultivating oil palm on 20 hectares of land, but that will not in any way stop us from
maximizing our potential in the oil palm plantation line of business.

We hope to grow the business from cultivating oil palm in 20 hectares of land to 100
hectares of land and also owning our palm oil processing plant and exporting palm
oil to other countries in Africa and the world at large.

As a business, we are willing to go the extra mile to invest in effective oil palm
cultivation tools and equipment and also to hire efficient and dedicated employees.
We have been able to secure permits from all relevant departments both at local and
state level in Ondo state.

PISON FARMS is set to redefine how oil palm plantation business should be run, not
just in Okitipupa – Ondo State, but also in the whole of the Nigeria. It is for these
reasons that we have put plans in place for continuous training of all our staff.

The demand for palm kernel, palm oil and other products from the palm tree is not
going to plummet any time soon because there will always be people who can’t cook
without palm oil and cottage companies who need palm oil as their raw material et al,
which is why we have put plans in place to continue to explore all available market
around the communities where we intend marketing our produce.

In the nearest future, we will ensure that we create a wide range of distribution
channels all across Nigeria, the West African Coats and the World at large.

PISON FARMS will at all times demonstrate her commitment to sustainability, both
individually and as a business, by actively participating in our communities and
integrating sustainable business practices wherever possible. We will ensure that we
hold ourselves accountable to the highest standards by meeting our customers’
needs precisely and completely.

PISON FARMS is a family business that will be owned by Adesola Ikuejamoye and
his immediate family members. Adesola Ikuejamoye is a farmer par excellence. He
has a degree in Agriculture from Obafemi Awolowo University.

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 OUR PRODUCTS AND SERVICES

PISON FARMS is a world class commercial farm that is committed to cultivating

organic and non – organic oil palm trees for both the Nigeria’s market and the global
market. We are in business to produce both food and raw materials for people and
industries in commercial quantities.

We are in this line of business to make profits, and we will ensure that we do all that
is allowed by the law of Nigeria to achieve our business goals and objectives. These
are the areas we will concentrate on in our oil palm plantation and if need arises we
will definitely cultivate related crops;

 Cultivation of variety of oil palm trees (organic and non – organic)

 Production of palm oil

OUR MISSION AND VISION STATEMENT

 Our vision is to own the largest private palm tree plantation in the whole of
Africa and to engage in wholesale distribution of palm oil and related products
all across Nigeria and to export palm oil to other countries of the world.
 Our mission is to establish a world class oil palm plantation and palm oil
processing business that in our own capacity will favorably compete with
leaders in the industry. We want to build a business that will be listed amongst
the top performing businesses in the Nigeria Stock Exchange.

OUR BUSINESS STRUCTURE

As part of our plan to build a top flight oil palm plantation business in Okitipupa –
Ondo State, we have perfected plans to get it right from the onset which is why we
are going the extra mile to ensure that we have competent employees to occupy all
the available positions in our company.

We will ensure that we only hire people that are qualified, honest, hardworking,
customer centric and are ready to work to help us build a prosperous business that
will benefit all the stake holders. As a matter of fact, profit-sharing arrangement will

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be made available to all our senior management staff and it will be based on their
performance for a period of five years or more depending how fast we meet our set
target.

The picture of the kind of oil palm plantation business we intend building and the
goals we want to achieve is what informed the amount we are ready to pay for the
best hands available in the crop cultivation industry as long as they are willing to
work with us to achieve our business goals and objectives.

In view of that, we have decided to hire qualified and competent hands to occupy the
following positions at PISON FARMS;

 Chief Executive Officer (Owner)

 General Farm Manager
 Human Resources and Admin Manager
 Sales and Marketing Officer
 Accountants / Cashiers
 Field Workers

Job Roles and Responsibilities

Chief Executive Officer – CEO (Owner):

 Responsible for providing direction for the business

 Upturns management’s effectiveness by recruiting, selecting, orienting,
training, coaching, counseling, and disciplining managers.
 Communicating values, strategies, and objectives; assigning accountabilities;
planning, monitoring, and appraising job results; developing incentives;
developing a climate for offering information and opinions.
 Creates, communicates, and implements the organization’s vision, mission,
and overall direction – i.e. leading the development and implementation of the
overall organization’s strategy.
 Responsible for fixing prices and signing business deals

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  Creates, communicates, and implements the organization’s vision, mission,
and overall direction – i.e. leading the development and implementation of the
overall organization’s strategy.
 Responsible for signing checks and documents on behalf of the company
 Evaluates the success of the organization

General Farm Manager

 Responsible for the planning, managing and coordinating all farm activities
across the various sections on behalf of the organization
 Ensures compliance during farming project executions
 Provides advice on the management of farming activities across all sections
 Responsible for carrying out risk assessment on the plantation
 Represents the organization’s interest at various stakeholders’ meetings
 Oversees the smooth running of the daily farming activities across the various
farming sections.

Human Resources and Admin Manager

 Responsible for overseeing the smooth running of HR and administrative

tasks for the organization
 Defines job positions for recruitment and managing interviewing process
 Carries out induction for new team members
 Responsible for training, evaluation and assessment of employees
 Oversees the smooth running of the daily business activities.

Sales and Marketing Manager

 Manages external research and coordinate all the internal sources of

information to retain the organizations’ best customers and attract new ones
 Models demographic information and analyze the volumes of transactional
data generated by customer purchases
 Identifies, prioritize, and reach out to new partners, and business
opportunities et al.

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  Responsible for supervising implementation, advocate for the customer’s
needs, and communicate with customers
 Develops, executes and evaluates new plans for expanding increase sales
 Documents all customer contact and information
 Helps to increase sales and growth for the company

Palm Oil Processing Plant Casual Workers

 Responsible for operating palm oil processing equipment

 Responsible for measuring and filling palm oil into various containers as
demanded by clients
 Responsible for carrying out all casual or unskilled jobs in the palm oil
processing plant
 Assists in loading and unloading of palm kernels and processed palm oil
 Handles any other duty as assigned by the palm oil processing plant manager

Accountant/Cashier

 Responsible for preparing financial reports, budgets, and financial statements

for the organization
 Provides managements with financial analyses, development budgets, and
accounting reports; analyzes financial feasibility for the most complex
proposed projects; conducts market research to forecast trends and business
conditions.
 Responsible for financial forecasting and risks analysis.
 Performs cash management, general ledger accounting, and financial
reporting
 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensures compliance with taxation legislation
 Handles all financial transactions for the organization
 Serves as internal auditor for the organization

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Field Workers/Contract Staff

 Responsible for preparing farm lands for oil palm cultivation

 Responsible for watering the palm trees
 Applies weed or pest control chemicals
 Handles farm implements and machines as instructed by the section
manager/supervisor
 Assists in handling the harvest of palm kernels
 Carries out task in line with the stated job description
 Assists in transporting work tools and equipment to the farm and back to the
designated store room
 Handles any other duties as assigned by the line manager

SWOT ANALYSIS

Because of our drive for excellence, we were able to engage some of the finest
business consultants in Ondo State – Nigeria to look through our business concept
and together we were able to critically examine the prospect of the business and to
access ourselves to be sure we have what it takes to run a standard oil palm
plantation business that can compete favorably in the oil palm plantation line of
business.

In view of that, we were able to take stock of our strengths, our weakness, our
opportunities and also the threats that we are likely going to be exposed to in
Nigeria. Here is a of what we got from the critically conducted SWOT Analysis
PISON FARMS;

 Strength:

Our strength lies in the fact that we own are going to be cultivating our oil palm in a
very fertile land. We have state of the art palm oil processing facility that has
positioned us to meet the demand of palm oil in Nigeria and the world at large even if
the demand tripled over night or if we have a massive order to meet and emergency
need.

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Another factor that counts to our advantage is the background of our Chief Executive
Office; he has a robust experience in the industry and also a pretty good academic
qualification to match the experience. We are not ignoring the fact that our team of
highly qualified and dedicated workers will also serve as strength for our
organization.

 Weakness:

We do not take for granted the fact that we have weaknesses. The fact that we are
cultivating oil palm and also setting up a palm oil processing business in a city with
other palm oil processing businesses might likely pose a challenge for us in breaking
into the already saturated market in Nigeria.

In essence our chosen location might be our weakness. But nevertheless, we have
plans to launch out with a big bang. We know with that, we will be able to create a
positive impression and we have a proper handle when it comes to building on
already gathered momentum.

 Opportunities:

The opportunities available to us are unlimited. Loads of people make use of palm oil
on a daily basis and all what we are going to do to push our palm kernel, palm oil
and by products to them is already perfected. Okitipupa in Ondo state is just ideal for
our oil palm plantation business because the land is ideal for farming palm trees,
plus there is a large market for palm kernels in Ondo State.

 Threat:

The threat that is likely going to confront us is the fact that we are competing with
already established oil palm plantations and palm oil processing businesses in Ondo
State and also there are other entrepreneurs who are likely going to launch similar
business within the location of our business.

Another threat that we are likely going to face is unfavorable government

policies and economic downturn. Usually economic downturn affects purchasing /
spending powers and unfavorable government policies can hinder exporting of palm
products to other countries of the world.

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MARKET ANALYSIS

 Market Trends

It is a common trend in this business to find oil palm plantations positioning their
business in locations and communities where they can have access to arable
farmland and cheap labor. If you make the mistake of positioning this type of
business in a location where you would have to pay huge amount to secure good
farm land, then you would have to struggle to make profits and maintain your
overhead and logistics.

So also, another trend in this line of business is that most oil palm plantation
businesses also run palm oil processing plant and they look beyond the market
within their locations or even Nigeria. They are involved in packaging and exporting
palm oil to communities abroad with robust Nigerian cum African
communities. United States of America, Canada and most countries in Europe are
their major targets.

In the bid to stay afloat and continue to make profits from this line of business, most
standard oil palm plantation businesses tend to work hard to ensure that they get
grants and support from the federal government. With that, it is easier for them to
maximize profits and grow the business.

OUR TARGET MARKET

When it comes to retailing palm oil and its by products, there is indeed a wide range
of available customers. In essence, our target market can’t be restricted to just a
group of people, but to all those who make use of palm oil for cooking and also all
those who make use of palm kernel and palm oil as raw materials in their cottage
industries.

The target market for palm products is wide and far reaching, you can create your
own niche yourself to serve a specific purpose. In view of that, we have conducted
our market research and we have ideas of what our target market would be
expecting from us.

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We are in business to engage in retailing and wholesale distribution cum exporting of
palm products to the following groups of people;

 Palm oil processing plants who don’t own their own oil palm plantation
 Households who make use of palm oil for cooking
 Restaurants and canteens that make use of palm oil for cooking
 Nigerian cum African communities in the united states of America, Canada,
and Europe
 Small scale businesses that make use of oil palm by products as part of their
raw materials.

OUR COMPETITIVE ADVANTAGE

The fact that the government of Nigeria is willing to support entrepreneurs who are
into crop cultivation cum oil palm cultivation means that the business is open to all
and sundry hence it is expected that there will be high – level competition in the
industry. There is hardly any community where palm trees can easily be cultivated
that you won’t find several oil palm plantations and oil processing businesses
especially on a small scale.

As a standard oil palm plantation business, we know that gaining a competitive edge
requires a detailed analysis of the demographics of the surrounding area and the
nature of existing competitors. And even if you are successful at first, new
competitors could enter your market at any time to steal your regular customers;
hence we will not hesitate to adopt successful and workable strategies from our
competitors.

We are going to be one of the very few oil palm plantations with a standard palm oil
processing plant in State – Ondo State that will also engage in wholesale distribution
of oil palm by-products across Nigeria and also export palm oil to other countries of
the world.

Another competitive advantage that we have is the vast experience of our

management team; we have people on board who understand how to grow a
business from scratch to profitability. Our robust distribution network, latest oil palm

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cultivation and processing tools and of course our excellent customer service culture
will definitely count as a strong strength for the business.

To conclude, our employees will be well taken care of, and their welfare package will
be among the best within our category in the industry, meaning that they will be more
than willing to build the business with us and help deliver our goals and achieve all
our aims and objectives. We will also give good working conditions and commissions
to freelance sales agents that we will recruit from time to time.

SALES AND MARKETING STRATEGY

 Sources of Income

PISON FARMS is established with the aim of maximizing profits in the oil palm
plantation line of business both in Ondo State and Nigeria and of course in some
countries of the world. PISON FARMS will generate income by simply selling and
exporting;

 Palm kernel
 Palm oil
 Palm tree by-products

SALES FORECAST

One thing is certain when it comes to oil palm plantation business, if your business is
centrally positioned and easily accessible, you will always attract customers cum
sales and that will sure translate to increase in revenue generation for the business.

We are well positioned to take on the available market in Nigeria and every other
countries of the world where we intend exporting our palm by-products to and we are
quite optimistic that we will meet our set target of generating enough profits from the
first few years.

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We have been able to critically examine the oil palm plantation line of business, we
have analyzed our chances in the industry and we have been able to come up with
the following sales forecast. The sales projections are based on information gathered
on the field and some assumptions that are peculiar to startups in Ondo State –
Nigeria.

 First Fiscal Year: N750, 000

 Second Fiscal Year: N2 Million
 Third Fiscal Year: N3.5 Million

This projection is done based on what is obtainable in the industry and with the
assumption that there won’t be any major economic meltdown and there won’t be
any major competitor offering same product and customer care services as we do
within same location. Please note that the above projection might be lower and at the
same time it might be higher.

MARKETING STRATEGY AND SALES STRATEGY

Before choosing a location to launch PISON FARMS, we conducted a thorough

market survey and feasibility studies in order to be able to penetrate the available
market in Nigeria and the international market. We have detailed information and
data that we were able to utilize to structure our business to attract the number of
customers we want to attract per time.

We hired experts who have good understanding of the oil palm plantation line of
business to help us develop marketing strategies that will help us achieve our
business goal of winning a larger percentage of the available market for our
products.

In summary, PISON FARMS will adopt the following sales and marketing approach
to sell our produce;

 Advertise our products in community based newspapers, local TV and radio

stations
 Engage in direct marketing and sales

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  Introduce our oil palm plantation business by sending introductory letters to
residents, merchants and other stakeholders both in Nigeria and abroad.
 List our business and products on yellow pages ads (local directories)
 Leverage on the internet to promote our product cum business
 Encourage the use of Word of mouth marketing (referrals)

PUBLICITY AND ADVERTISING STRATEGY

Notwithstanding the fact that our oil palm plantation business is a standard one that
can favorably compete with other leading oil palm businesses in Nigeria and in any
part of the world, we will still go ahead to intensify publicity for all our brand. We are
going to explore all available means to promote PISON FARMS.

PISON FARMS has a long term plan of opening our own oil palm plantation across
the southern part of Nigeria and export to our product all across the world. This is
why we will deliberately build our brand to be well accepted in Okitipupa – Ondo
State before venturing out to other cities in Nigeria and the world.

As a matter of fact, our publicity and advertising strategy is not solely for selling our
products but to also effectively communicate our brand. Here are the platforms we
intend leveraging on to promote and advertise PISON FARMS;

 Sponsor relevant community programs

 Leverage on the internet and social media platforms like Instagram,
Facebook, twitter, et al to promote our brand
 Place adverts on both print (community based newspapers and magazines)
and electronic media platforms
 Install our billboards on strategic locations all around major communities in
Nigeria
 Distribute our fliers and handbills in target areas
 Position our Flexi Banners at strategic positions in the location where we
intend getting customers to start patronizing our palm oil.
 Ensure that all our staff members wear our customized clothes, and all our
official cars and distribution trucks are customized and well branded.

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 FINANCIAL ANALYSIS

From our market survey and feasibility studies, we have been able to come up with a
detailed budget for achieving our aim of establishing a standard and highly
competitive oil palm plantation business in Okitipupa – Ondo State. We know that no
matter where we intend starting our oil palm plantation business, we would be
required to fulfil most of the items listed below;

 The Fee for registering the business (venture) in Nigeria – N15,000

 The cost for hiring Business Consultant – N50,000
 Insurance (general liability, workers’ compensation and property casualty)
coverage at a total premium – N30,000
 The amount needed to acquire / lease a farm land – N50,000
 The amount required for preparing the farm land – N50,000
 The cost for acquiring the required working tools and equipment / machines /
fencing et al – N30,000
 The amount required for purchase of the first set of palm kernel seedlings et
al – N45,000
 The amount required to set up a standard palm oil processing plant within the
farm facility – N50,000
 Operational cost for the first 3 months (salaries of employees, payments of
bills et al) – N100,000
 The cost for Start-up inventory (palm kernel supply, storage tanks, drums,
bottles and packaging materials et al) – N50,000
 Miscellaneous – N30,000

We would need an estimate of N500 thousand Naira to successfully set up a

standard palm plantation with palm oil processing plant in Ondo State. Please note
that this amount includes the salaries of all the staff for the first 3 months of
operation.

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 GENERATING STARTUP CAPITAL FOR PISON FARMS

No matter how fantastic your business idea might be, if you don’t have the required
money to finance the business, the business might not become a reality. Finance is
a very important factor when it comes to starting an oil palm plantation business. No
doubt raising startup capital for a business might not come cheap, but it is a task that
an entrepreneur must go through.

PISON FARMS is a family business that is owned and financed by Ikuejamoye

Adesola and his immediate family members. They do not intend to welcome any
external business partners which are why she has decided to restrict the sourcing of
the startup capital to 3 major sources.

These are the areas we intend generating our startup capital;

 Generate part of the startup capital from personal savings and sell of stocks
 Source for soft loans from family members and friends
 Apply for loan from my Bank

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 CONCLUSION

The future of a business lies in the number of loyal customers that they have the
capacity and competence of their employees, their investment strategies and
business structure. If all of these factors are missing from a business, then it won’t
be too long before the business close shop.

One of our major goals of starting PISON FARMS is to build a business that will
survive off its own cash flow without the need for injecting finance from external
sources once the business is officially running. We know that one of the ways of
gaining approval and winning customers over is to retail our palm products a little bit
cheaper than what is obtainable in the market and we are well prepared to survive
on lower profit margin for a while.

PISON FARMS will make sure that the right foundation, structures and processes
are put in place to ensure that our staff welfare is well taken of. Our company’s
corporate culture is designed to drive our business to greater heights and training
and retraining of our workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the
best hands we can get in the industry; they will be more committed to help us build
the business of our dreams.

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