Sheanut butter production for export
Investment justification
The end products of sheanut butter processing are of great economic value. The products are sheanut butter and shea cake.
Sheanut butter is used in cooking (when refined). It is used in the pharmaceutical and cosmetics industries and has a lot of export potential. The cake, which is a by-product, is used as animals feeding stuff in compounding animal ration.
Establishment of the product processing plant will raise the demand for farm products thereby encouraging the farmers to produce more. The long-term effect is that of rural development, even distribution of income and indigenisation of the economy. These are pre-requisites to economic development.
Technological progress will be achieved as local fabricators and engineers will be encouraged to perfect technology in the design and fabrication of the processing plant. Countries like India, China, Japan, South Korea and Malaysia achieved technological growth through the development of machines that readily utilise local resources to produce value-added goods.
The project is also seen as one of the steps that will strengthen Nigeria’s informal sector, which accounts for more than 70 percent of the country’s total economy. Informal sector comprises of the poor farmers, the artisans, the craftsman the petty traders, technicians and small-scale processors. It is no gainsaying that they form the bulk of the economy.
The project will achieve among others self-reliance and increased non-oil export earning; this will no doubt increase our foreign exchange earning potential.
The viability of the project is not in doubt. This is because the raw materials are readily available. They are available in Kwara, Kogi, Benue, Niger and Kaduna states. Not only this, the production technology is simple, there is ready market for the products and a substantial margin exists per unit of input. Prospective investors, therefore, stand to benefit tremendously from this viable and reliable investment opening. It is therefore strongly recommended for funding.
Technical information
Sheanut butter extraction involves procurement of dried nuts from suppliers. The nuts are fed into the machine to remove the fats. The fats are then collected and stored in appropriate containers. The cake is also packed in bags ready for sale to the feed millers. Implementation procedures are preparation of detailed feasibility report showing both the technical and financial details, sourcing of finance and machinery, installation of plant and machinery in appropriate accommodation, recruitment of appropriate personnel and procurement of rare materials. After the fulfilment of the above, commercial production takes off. Interest investors can be assisted in any of the steps listed above.
Financial implication
The project has been estimated to cost N4,250,000, comprising of the following:
N
1. Pre-investments 100,000
2. Plant and equipment 1,800,000
3. Utilities 850,000
4. Accommodation (rental) 500,000
5. Working capital for take-off (raw
materials and others) 1,000,000
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Total N4,250,000
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This can be financed by a combination of existing assets, joint ventures, term loan and overdraft from bank. A well-packaged feasibility report is a pre-requisite to this. This can be provided on request.
Profitability
The plant can process 5 tons of input per day. A profit margin of N6, 000 per ton of input has been computed.
Working for 200 days in a year, a conservative annual net income of N6 million is achievable. The profitability of the project not withstanding, its establishment is seen as one of those steps that should be taken towards the revival of our almost dead economy. Serious minded investors can be assisted to set up the project.
Tel: 080-23058045, 08152596985, 080-336601077
E-mail: olumakindeoni@yahoo.com, nucleusventuresnigltd@yahoo.com