There are two major methods of extracting oil from palm kernel.
1. Solvent extraction.
2. Expeller method

For this article, we shall consider the expeller method of extraction. The endocarp of palm fruit is popularly called palm kernel. It contains between 50 to 60% oil depending on the variety and the machine used for extraction. The oil from kernel is useful in the cosmetics industries, for making soap, detergents ant body care products.

The machine for extracting the oil are called expellers. Expellers are of various capacities and are sold under various brand names. There are locally fabricated ones and imported ones. Majority of the locally fabricated ones I observed are not functioning properly. One in the area of efficiency and two in terms of durability. The imported ones are mainly from China, India, and Korea.
The Indian types tends to be more efficient and more rugged than the Chinese and Korean types. They are available in 5 tons 10 tons and 20 tons per day capacity. The price of 5 tons per day capacity is about 3 million Naira with installation. I visited an oil mill at Idimu with 14 production lines of 10 tons per day capacity each. This brings the maximum capacity of the plant to 140 tons per day. The machines are the Korean type. From my personal rapport with the production manager the machines are very efficient and runs for hours without any hitch.
He really recommended the machines. My oil mill manager friend at Abule Egba will always recommend his own machine KHUMAR brand Indian made oil expeller to any one for the efficiency and ruggedness.

PROCEDURE This project requires at least two plots of land to erect a warehouse to accommodate the equipment and raw materials. From my observation at Abule Egba the following small partitions were carved from the warehouse to ease administration:
A. Cloak room
B. admin office
C. general store, not for raw materials.

33,000 Litres capacity tank was installed outside the hall to store the oil produced. The machine was installed in the warehouse and raw materials stalked too not far from the machine. The machine, a Khummar brand of seed crusher was installed at one end of the hall. The capacity of the machine is 10 tons per day. The staff strength is 10 as follows:
1. Plant manager in charge of procurement of raw materials, sales and general running of the enterprise.
2. Supervisor assisting the plant manager.
3. Foreman, to control the labour force, in charge of offloading raw materials loading palm kernel cake into delivery vans and most important loading raw materials into the machine for production.
One ivory scale of 2 tons capacity is at one side of the main entrance to weigh raw materials into the warehouse and palm kernel cake into delivery trucks.
Operation
Work starts by 8 .00AM. The workers simply carry the palm kernel to the expeller machine and pour it gradually into the hopper of the machine. The machine powered by electric motor is switched on for crushing and expelling to commence. The cake produced is delivered into a sack placed under the machine. The oil is channelled into an underground tank of 11000 litres capacity.
The sack of palm kernel cake is removed when full and replaced with empty one. The cake is carried to a corner near the scale to be weighed for prospective buyers. The tank of oil is left for about two hours for the sludge in the oil to settle at the bottom of the tank. The oil on top is then pumped into the 33000 litres tank located outside the warehouse. Now there are three products:
1. Palm kernel cake
2. the sludge
3. palm kernel oil in order of importance and cost.

Cost analysis
Currently the price of palm kernel cake is 90,000 Naira per tonne, sludge is 100,000 Naira per tonne and oil is 120,000 Naira per tonne. The cost of palm kernel is 80,000 Naira per tonne. Ten tonnes of palm kernel cost 800,000, it will produce 5 tonnes of oil, which sells for 600,000 Naira.
4 tonnes of cake sells for 360,000 Naira
1 ton of sludge sells for 100,000 Naira
Total 1,060,000 Naira
Less cost of raw material 800,000 Naira
The balance is 260,000 Naira gross profit on ten tons per day.

There is ready market for all the products, They are all sold right at the point of production there. For the cake you have to book with down payment at least one week before collection. The major problem encountered is power failure and procurement of raw materials. Major portion of the raw materials comes from Idiroko and neighbouring country Republic of Benin.
In conclusion palm kernel oil production is a lucrative business for entrepreneurs with up to 15 million Naira to invest.