Establishment of multipurpose cassava processing plant
Investment justification
Nigeria is about the largest producer of cassava in the world with annual production of over 34 million metric tons. Establishment of multipurpose cassava processing centres will no doubt enjoy good supply of raw materials.
Currently, there is glut is cassava production in Nigeria, simply because of absence of adequate processing of the crop into many products. Establishment of this product will definitely solve this problem. It will at the end of the day encourage farmers to cultivate more, since they now have ready-made market for their crops. The implication of this is that there will be increased farm activities.
Very recently, the Federal Government passed into law that 10 percent of composite flour used by bakers should be made of cassava. By this, the implication is that the demand for cassava flour in Nigeria is now in thousands of tons annually. This is to say in essence that the proposed project is bound to enjoy tremendous patronage.
There is bound to be constant demand for the products of this factory as it is multifarious in nature. Since there would be more than three products from the factory, we are sure of getting regular demand for any of the products daily.
Socio-economic benefits derivable from the project among others are employment generation, poverty alleviation, improved rural income, diversification of the economic base and optimal utilisation of resources.
Technical information
Establishment of multipurpose cassava processing centre will entail procurement and installation of machines that will be able to produce cassava flour, cassava chips, starch, fufu powder and garri. Cassava chips can be sold to both local and international markets, starch can be sold to textile industries and other users of starch. Fufu powder and garri are consumed locally and internationally as main source of energy, providing food by Nigerians in particular and Africans in general. Flour is also consumed by human beings or can be supplied to industries that utilise them to make biscuits and bread. Federal, states and local governments can establish cassava processing centres to create jobs and provide food for the masses.
Production process involves chipping, milling rasping, dewatering, sieving, frying, drying and packaging. Each product has its own production process to follow.
Implementation procedure includes pre-investment activities, procurement of accommodation, installation of plant and machineries recruitment and training of personnel, test running of equipment and commercial take-off. Genuine and serious minded investors can be assisted in the establishment of this project, including supply of reliable and guaranteed processing machines and assistance in the marketing of the products.
Financial implication
A sum of N5,050,000 will be required to establish the project. This is broken down as follows:
N
1. Pre-investments 100,000
2. Accommodation (rental) 200,000
3. Plant and machinery 3,000,000
4. Utilities 750,000
5. Working capital 1,000,000
Total N5, 050,000
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Profitability analysis
The following profitability indicators have been computed:
Annual turnover: N95 million
Pay back period: One year
Annual profit after tax: N65 million
% return on investment: Over 700%
This is no doubt a good source of livelihood for Nigerians and forward-looking investors
Author’s contact: 08023058045, e-mail: olumakindeoni@yahoo.com.
OLUMAKINDE ONI