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he study examined the assessment of production capability in small and medium scaled palm kernel processing firms in Southwestern Nigeria. The study covered Ogun, Ondo, Osun and Oyo, States in Southwestern Nigeria. The sample size of 265 palm kernel processors was obtained through respondent driven sampling techniques. The research tools used were questionnaire, personal observations, interviews and secondary data collection approach. The questionnaire was administered to the processor and elicited information on socio-economic characteristics of the respondents, their production capabilities, profile of the firms. Both descriptive and inferential statistical techniques were employed for data analysis. The study showed that majority (75.8%) of palm kernel processing firms invested above N500,000 for setting up their firms and 15.1% invested between N401,000 -N500,000. The sources of capital for the investments were from personal savings (77.7%), friends (34.0%), family members (15.5%) and cooperative society (34.0%) only very few of them sourced for investment capital from bank (4.3%), and government institution/agencies (1.1%). The investment capability rating on a 4-point Likert scale showed that palm kernel processors were able to carry out feasibility study (3.98), purchase raw materials (3.99), procure processing equipment (3.99), generate enough capital (3.55) and enough working capital I. INTRODUCTIONProduction capabilities are the skills that are required to effectively operate a plant with a given technology and the improvement of the technology over time. Production capabilities influence the productivity of labour and capital as well as efficiency in material and energy use. Production capabilities relate to the knowledge and skills used in the organization's operation where on-the-job experience appears to be of great importance (Adegbite, 2010).Akerele (2003) further suggests that three broad related activities could be identified in this category. These are classified as production management, production engineering in terms of raw materials control, production scheduling, quality control and repair as well as maintenance of physical assets which have been found to have positive impact on productivity improvement. The Bogota Manual (2001) also suggested three elements of production capability. These include: process engineering, product engineering and industrial engineering. Process engineering includes necessary activities, for production. Product engineering contains activities required to produce product or improved product specifications, such as assimilation of product design, improvement in product quality and design research. Industrial Engineering involves monitoring and control functions for process and product engineering. Therefore, production capability is the stock of capital goods and operating know-how required to manufacture existing goods with productive efficiency.These capabilities also include production management which is the ability to monitor and improve the oper...

he study assessed the impact of production and innovation capability on performance of the firms in this sector. The study covered Osun, Oyo, Ogun and Ondo States in southwestern Nigeria. The sample population of 265 respondents was obtained through respondent driven sampling techniques tools. The research tools used were questionnaire, personal observations, interviews and secondary data collection approach. The questionnaire was administered to palm kernel processor and elicited information on socio-economic characteristics of the respondents, profile of the firms, production capabilities possessed by the palm kernel processors, innovations available in the firms. Both descriptive and inferential statistical techniques were employed for data analysis I. INTRODUCTIONPalm kernel is a by-product of the palm oil industry. It constitutes about 45% of the palm nut of the palm oil Elaeis guineensis (Rossell, 1985;Goh, 1993 and Kadir et al., 1998). It can be processed into palm kernel oil (PKO) and palm kernel cake (PKC). Palm kernel oil is rich in Lauric acid, G12 (48.3%) but also contains other major fatty acids such as myristic, extracted using screw press with 40-43% (g oil/100g kernel) yield or liexone extracted with 44.5%-46.5% yield (Tang and Teoh, 1985). According to Gbasouzor et al., (2012) palm kernel oil is a white to yellowish oil of vegetable origin which is solid at normal temperature and is obtained from the kernel of the oil palm fruit (Elaesis guineensis). It is one of the best oil, which is obtained from the flesh of the fruit Gbasouzor et al., 2012). Malaysia produced about 2.4 million metric tonnes of palm kernel and about 1.1 million metric tonnes of crude palm kernel oil in 1998 (Porla, 1998). Hassan et al. (1999) emphasized that PKO is a high quality oil for food use and a valuable component of margarine formulation, giving rapid melt down of PKO in the mouth characteristics (Siew and Begger, 1981). Its high solid content at 15-20°C, together with rapid melt down, makes it particularly useful in confectionery products. It is commercially fractionated into liquid olein and solid stearin, the latter being a premium product (Hassan et al., 2000).However, production of PKO in Nigeria was poor and such vegetable oils are important to meet demands. According to estimates, the total money Nigeria spent to import vegetable oil from Malaysia in 2001 was $186.65 million.It has been estimated that production-consumption margin is increasing by thousand tonnes naturally because of population growth and rise in per capital income (Vanguard, 2002). In 2003, World production PKO was 3236 metric tons out of which Malaysia produced 1644 metric tonnes of PKO (MPOB, 2003).The PKC is obtained from two stages of oil extraction from the palm fruit. The first stage is the primary extraction of palm oil from the pericarp portion of the fruit, which also produces the kernel and by-products Palm Oil Sludge and Palm Press Fiber. The extraction of oil from crushed kernel then results in the production of PKC as...