RMRDC promoting oleochemical producing plants to boost economy


The Raw Materials Research and Development Council (RMRDC) over the years continue to spear head the promotion of the establishment of oleochemical (palm oil) producing plants in Nigeria to reduce importation of palm oil and boost Nigeria’s Gross Domestic Product (GDP); BINTA SHAMA reports.

Research states that oil palm, derived from the palm fruit (Elaeis guineensis) is indigenous to Africa and particularly West Africa and Nigeria. In the last 50 years, there has been phenomenal expansion in its cultivation throughout the tropics such that palm oil is now a major commodity of world trade. Recent studies of oil palm germplasm collections employing molecular DNA techniques have shown that oil palm plasm collection from Nigeria exhibited highest level of polymorphism with highest number of rare alleles suggesting that Nigeria was likely to be the centre of diversity of oil palm. Palm oil is a lipid extract from the fresh mesocarp of the fruits from the oil palm tree which belong to the Palmae family. The major constituents of palm oil are Triacylglycerols (TAG), while the crude palm oil contains approximately 1% of minor constituents, including carotenoids, tocopherols and tocotrienols, phytosterols, phospholipids, glycolipids, terpenic, and aliphatic hydrocarbons. Some minor components, especially the carotenoids and tocopherols and tocotrienols, not only maintain the stability and quality of palm oil, but also possess significant biological properties, including antioxidation, anti-cancer, anti-inflammatory, anthrosclerosis-controlling, and cholesterol- lowering effects.

Palm oil uses

Palm oll (Elaeis guineensis) is the world’s largest edible oil in terms of production and trade. Palm oils balanced fatty acid composition makes it one of the most versatile oils for food industry applications. Moreover, crude palm oil is also one of the richest dietary sources of pro-vitamin A and vitamin E. Palm oil has a unique fatty acid and TAG profile which makes it suitable for a number of food applications. Palm oil is also used as a source of fatty acids, vitamin E, and emulsifiers. Fractionation of palm oil results in various fractions with distinct physical and chemical properties.

Customized blends of these factions with other oils are used in different food products ranging from margarines to soup mixes. The main feedstocks for oleochemicals are coconut oil and tallow, resulting in oleochemicals having fatty acid moiety of even numbered saturated carbon chain lengths. However, between 1985 and 1995, the significance of tallow was greatly reduced because of the BSE disease outbreak. Palm stearin has since replaced tallow in many applications and has now become the major feed stock for oleochemicals production. However, only about 10%-15% of palm oil is used for non-food application. Out of this, about 70% is used as surfactant either in food or non-food application. Palm oil fatt converted into basic oleochemicals such as fatty acid, glycerol, methyl esters, fatty alcohols, and fatty amines. These basic oleochemicals serves as building blocks for many other chemicals. It constitutes an essential ingredient of typical Nigerian diets and meals and also serves as a commercial product. In terms of volume, palm oil and palm kernel oil account for about 70% of the Nigerian vegetable oil market. Its importance in the economy transcends revenue generation to food security.


Presently, the national annual demand for palm oil is in excess of one million tonnes, while domestic production is about 785,000 tonnes. As a result of the deficit, Nigeria spent approximately 60.58 billion on the importation of palm oil and its derivatives from 2010 to 2015. In 2018, about $500 million was spent on the import of 600,000 tonnes of palm oil. The uses of oil palm locally have expanded considerably in recent years. Also globally, about 77% of it is used for food and increasing expanding range of non-food uses in the production of biodiesel and various oleochemicals. The demand for palm oil in Nigeria is primarily driven by the household consumers who prefer to consume the technical palm oil (TPO) because of its flavor profile. The demand is also complemented by an increasing demand for the special palm oil (SPO). Though, domestic production of TPO in 2018 is nearly 900,000 tonnes, there is a gap of about 300,000 tonnes in the demand and supply of the product in Nigeria. The main forces driving the increased demand for TPO in Nigeria include the increasing household consumption due to changing consumer consumption patterns and increasing demand from the primary food processing industry. At the industrial level, the secondary processors are driving demand for SPO by further refining to sell to the manufacturing iindustries.

Contribution to economy

For years, most especially in the 1950’s, Nigeria held centre stage as one of the largest producers and exporters of palm oil, accounting for more than 40% of global output. Then, oil palm production and export historically contributed substantially to Nigeria’s external reserves and agricultural GDP palm oil and palm kernels exports composed 15.0 to 20.0% of the country’s total exports. Howe the oil boon of the mid-seventies and the subsequent decline of farming were disastrous to the sector By the end of the twentieth century, the Nigerian palm oil harvest had dwindled to just 7% of global production. With this downturn, the country’s contribution to global market share is now a meagre 1.4% as at 2018 as Nigeria’s oil palm is no longer competitive in global market despite the expansion cultivations in more than 24 States of the federation which includes Ogun, Ondo, Oyo, Edo, Osun, Cr River, Anambra, Enugu, Imo, Abia, Ebonyi, Ekiti, Akwa-ibom, Delta and Rivers as leading producers. The global sale of palm oil exports totaled $30.4 billion in 2018. The major exporting countries were Indonesia with about $16.6 billion, Malaysia $8.7 billion and the Netherlands, $978.6 million, and Ivory Coast exported a reasonable amount of palm oil in Africa in 2018, it exported about 51844 million worth during the period. Experts say the palm oil market in Africa is estimated at $582 billion in 2018 in value terms, the largest market is in Nigeria with was worth about $861 million in 2018. Driven by increasing local demand, the market for palm oil is expected to continue an upwe trend in the next five years. Unless the efforts being put in place yield adequate result overtime, market performance is forecast to retain its present trend.

The major problem hindering the competitiveness of palm oil is that most of them come from small farms and wild groves. The processors also use manual techniques. Several million smallholders accounted for 80% of total production. They are spread over an estimated area of 1.65 million to 3 million hectares mostly in the wild. The estimate for oil palm plantations in Nigeria ranges from 169,000 hectares to 360,000 hectares of plantations. Vast oil palm estates (plantation) with acreage of 500 10,000 Ha makes up only 5% of the entire palm oil production in Nigeria.

FG’s initiatives

A combination of efforts has been and is still being made to promote development of the oil palm sector in Nigeria. The World Bank continues to play an important role in the promotion of oil palm business in Nigeria. The country was the second largest recipient of World Bank palm oil sector projects, with six projects from 1975 to 2009. The results achieved included the establishment of plantation of about 42.658 ha of oil palm, as well as road improvement and increased milling capacity. In a bid to encourage local production of palm products to satisfy local demand, importation of bulk crude and refined vegetable oil was prohibited in 2001. This led to increase in private sector investments in the development of new oil palm plantations and the expansion of existing ones. However the ban was lifted in 2008 and its effects on the palm oil market have been detrimental to the effect that the price of local palm oil has decreased over the past couple of years, mainly due to an increase in imported cheaper crude palm oil.

The federal government under President Olusegun Obasanjo initiated what was then called a road- map to revive vegetable oil production in Nigeria. A forum on vegetable oil production which took place in September 2000 and chaired by President Obasanjo led to the setting up of a Committee on Vegetable Oil Development Programme (VODEP). For the oil palm sub-sector, the committee set a target of planting one million hectares of oil palm in five years. In 2003, the federal government introduced the National Economic Empowerment and Development Strategy (NEEDS) having marked rubber, oil palm and cocoa plantations for privatization. Also in April 2010, the government, in collaboration with the UN’s Industrial Development Organization (UNIDO) and the government of Cameroon, launched a Common Fund for Commodities in order to improve the income generating potential of oil palm in West and Central Africa. The initiative was developed by UNIDO and funding is shared between Nigeria, Cameroon, UNIDO and the private sector. Also, in 2012 the Agricultural Transformation Agenda (ATA) was launched in Nigeria to promote investment by private sector in priority value chains development. Also some private investors like PRESCO are, striving to improve oil palm production through plantation expansion and the encouragement of out- growers. In 2018, the present administration moved to return the sector to its past glory. The CBN has requested the state governments to promote palm oil production issues in their states. The bank also showed its commitment by offering to provide N69 billion for facilitation and development of the sector. This is aside from the N30 billion it had already disbursed to the palm oil sector under the Oil Palm Development and Expansion Initiative. While these are commendable, they are also serving as motivations for the state governments and other stakeholders most especially, corporate organizations, individuals, small and medium scale enterprises and even smallholder producers in the palm oil production industry.

RMRDC’s initiative

The Raw Materials Research and Development Council has for a long time recognized the importance of the oil palm sector since it was established in 1987. In 1990, the Council collaborated with NIFOR to produce 5000 seedling of improved tenera variety that was distributed to farmers in the South East, South West and South South parts of the country for plantation establishment. Also in 2017, the Council also distributed 10,000 seedlings of improved tenera seedlings to farmers associations and cooperative societies in the country under its strategic project on the development of vegetable oils in Nigeria.

The Council promoted the establishment of oil palm processing plants for cooperative societies in Anambra State. The cooperative societies include: Integrated Multipurpose Cooperative, Nnewi; Nnayekwu Palm Oil Cooperative, Oba; Ezeakonobi Multipurpose Cooperative Society, Ukpor. To promote production of Special Palm Oil by these cooperative societies, the Council provided and installed Steam boilers, Palm fruit digester, Oil press, Palm kernel Cracker and Separator in the facilities of these cooperative societies.

The Council is also promoting development of palm oil processing clusters in parts of the country. Presently, 10 tonnes/day palm oil processing plant was fabricated by Basicom Machines, Owerri for deployment to Oil Palm Processing Cluster in Otuoke, Bayelsa State. The machines fabricated include Sterilizer, Burn stripper, Boiler, Clarifier and Extractor. The plan is to replicate the project in other states and install them in clusters already in place or those to be formed in collaboration with the Ministry of Industry in the various States.

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