CASSAVA STARCH PRODUCTION

INTRODUCTION

 Wet cassava starch Milling
produced by traditional cassava processors either as a direct product or as a by-product resulting from cassava processing into other products such as gari, fufu e.t.c. Post-harvest loss is high for cassava roots due to the inadequacy of the traditional processing method and inability to convert cassava into less perishable products. To reverse this trend, there is a need to mechanize cassava processing. The Federal Institute of Industrial Research, Oshodi (FIIRO) has developed and perfected the process technology for production of cassava starch useful for various applications in the user industries. In Nigeria, mechanized cassava processing is still on the developmental stage and the potential is very high.

 

MARKET DEMAND

 
There is high demand for cassava starch in Nigeria. It is widely used in industries such as: textile, pharmaceuticals, oil drilling, paper and packaging, gum and adhesives, chemical and household products manufacturing, battery, drinks and beverages, foods and so on.  The desire to conserve foreign exchange and reduce import dependency is the driving force for demand for cassava starch especially as regards its partial substitution for corn starch in user industries.  The demand for cassava starch in Nigeria is in excess of 350,000 tons per annum. The current domestic production capacity to meet the estimated demand for cassava starch is less than 20 per cent.

 
RAW MATERIAL, SUPPLIES AND UTILITIES

Fresh cassava root is the only raw material for production of Cassava Starch. Cassava is grown in almost all the states in Nigeria and Nigeria has been rated the highest producer of cassava in the world. The major item of supplies is the packaging materials. Others supplies requirements include factory wears (overall, hand gloves, factory shoe, nose mask), cleansing agents, disinfectants, etc. Electricity, diesel (for generator and project truck), Low Pore Fuel Oil (LPFO) for firing the flash dryer, and water are the major utilities requirements.

 
MACHINERY AND EQUIPMENT

The major equipment for production of Cassava Starch are: Hammer Mill, Grater, Starch Extractor, Sedimentation Tank, Hydraulic Press, Granulator, Flash Dryer, Packaging Machine and Weighing Machine. These can be fabricated at FIIRO(Federal Institute Of Industrial Research,Oshodi).

LABOUR REQUIREMENT

Both skilled and unskilled labour is required for this project. A total of about 42 workers are required for production, marketing and administration.

 

CAPITAL REQUIREMENT

The estimated total initial investment is N34, 185,650. This consists of the initial fixed capital N23, 316,360 (including factory building, machinery and equipment, generator, project vehicle, office furniture and equipment and bore hole), initial working capital N5,602,000.00 and pre-production expenses N2,267,000.00.

 

SPACE REQUIREMENT

Two plots of land are adequate for the project.

 

PRODUCTION PROGRAMME

Production Days/Annum                 -                300

Production Volume/Day                  -                 4 Tonnes

Production Volume/Annum            -                1,200Tonnes

Input Output Ratio                           -                 1 : 0.15

 

PROFITABILITY                                                    N’’000

Total Revenue                                                     126,000.00

Total production Cost                                        97,755.00

Gross Profit Before Tax                                      28,244.66

Tax @ 30%                                                           8,473.40

 

NET PROFIT                                                         19,771.26

Gross Profit to Sales                                            22.40%

Net Profit to Sales                                                15.70%

Return on Investment (Year 1)                           81.40%



PROPOSAL ON GARRI BUSINESS

Garri is one of the most staple Nigerian diets because not only is it cheap, but it is easy to make and can be taken in majorly two ways that are fast to prepare. Those in the garri business know that this is the fastest way to make money especially in the agro processing industry.


Business Overview

Cassava, the raw material used to make garri is a source of food to nearly three quarter of the world population. The crop is regarded as a staple diet in most developing countries in the world, and is ranked the third after rice and maize.
Nigeria is the largest producer of Cassava in Africa; producing over 41 million metric tons per annum, followed closely by the Democratic Republic of Congo. Globally however, Thailand is the largest producer of this crop as they produce and export cassava products worth over $20 billion annually.

This therefore makes Garri one of the major products from processed cassava the staple food for almost all Nigerians, as about 75% of Cassava is processed into Garri. According to statistics, about 130 million people – both in rural and urban areas – consume 12 million tons of garri annually.

According to reports, any entrepreneur going into this business will make immense profit, as the reports show that demand for this product is not only stable but increasing even though there are few close alternatives to Garri. Garri can be consumed in two ways – the cold process and the hot process, and while there is no substitute for the garri consumed via the cold process method, the few substitutes available for garri taken during the hot process are expensive, which leaves consumers with no alternative than to stick to garri.

Executive Summary

Our company shall be registered under the Corporate Affairs Commission (CAC) and also will be legally licensed by the National Agency for Food Drug Administration and Control (NAFDAC) here in Oyo State. We will  also acquire the necessary licenses needed to run a plant without running afoul of the law here in Oyo state.

Our aim of starting this business is to ensure that our clients both domestic and international get processed garri of the finest quality. We intend to process for sale white garri (Ijebu and normal) and yellow garri so as to be able to cater to our teeming customers.

Our garri processing plant will be located in a conspicuous area and close to the road, which makes the location very strategic for our suppliers and distributors as well as our customers.

The company, Global Trust will be owned and managed by Mr Adebisi Taofeek with input from the partners. Mr Adebisi will be involved in the day to day operation of the garri processing plant. He has vast experience in the agro processing industry and will therefore bring his knowledge to bear in this business.

Our Products and Services

The company will be licensed by the National Agency for Food Drug Administration and Control to process garri that will be used in households as well as in commercial places. We will  also register with the Corporate Affairs Commission and have fulfilled all other necessary obligations that will enable us make profit and grow as a business.

Some of the products and services we intend to indulge in as a business includes: quality garri, consultancy Services,Training, and Coaching

Our Vision Statement

Our vision is to be the preferable garri for customers in Iseyin, Oyo state and the whole of Nigeria as well.

Our Mission Statement

Our mission is to ensure we process garri of the highest quality using the best machines and resources. We also intend to ensure that our processed garri does not only meet the needs of our household clients but become a profitable business for our partners and distributors.

Our Business Structure

Knowing how our vision is to be the most preferable garri for our customers, we have decided to ensure that we draft a business structure that will allow us not only achieve all our intended goals and objectives but also enable us build a solid business foundation as well.

One of our top priorities is to ensure that we hire the best professional hands that have the required necessary experience, are dedicated and that will ensure that the business runs smoothly.

We also intend to provide excellent customer service by hiring those with the experience of handling customer orders and complaints efficiently.  

Those we intend to employ to handle various tasks with assigned roles and responsibilities for the growth of the company include;

Managing Director, Admin Manager Marketing and Sales Executive, Purchasing ManagerAccountant/Cashier, Store Manager, Front Desk Officer, security Guard, Cleaner, and Van Driver.

SWOT Analysis

Even though garri might be a very popular food taken by almost anyone, starting the business and becoming profitable is another ball game altogether, as this is a business that is both capital and labor intensive.
However, just like any business out there, we know that we have certain strengths that will ensure we become industry leaders, and several weaknesses that we would need to work on if we intend to become successful.

Below is a preview of the critical SWOT analysis that was done on behalf of the company;

Strength

Our location in Iseyin, Oyo  State is one of our greatest strengths as it means we are close to mega cities like Lagos State which is a thriving market, as well as other important states.

Weakness

Our perceived weakness stems from the fact that we are operating in just one location which will seriously limit our vision of supplying to our target markets all over Nigeria.

Opportunities

Due to the fact that we are amongst the first garri processing businesses to offer more than white garri, this has cemented our role in front and has led to many start-ups requiring trainings from .

Threat

Our threats are not really that significant, as there are really no government policies or economic downturn to worry about, but like every business, we take all threats seriously, and intend to act proactively to reduce or eliminate the threat.

MARKET ANALYSIS

Market Trends

Garri is one of Nigeria’s staple diets and is taken in every home. If you intend starting your own garri processing business, then you will need a land where you will not only install your facility, but it must also be near as possible to your source of raw materials .

Our Target Market

The target market for garri is very huge as almost every home and everyone takes this product. However, more people are likely to take one color of garri than the other depending on their location. We intend to carry out a thorough market survey that will allow us determine the quantity that would be needed to be processed for each color of garri.

Our target market includes; households, schools, restaurants, hotels, caterers, students, single males and females.

Our Competitive Advantage

Every business that is established with the intention of making profit and intends to compete favorably with others in the industry knows that it needs to draft competitive advantage strategies that will enable it to have an upper hand over other businesses in the same industry.

Also, we intend to constantly train our professionals so that their skills can be enhanced which will invariably lead to higher productivity that will be beneficial to the company in the long run.

Lastly, we intend to effectively deploy the use of the internet by using our websites and social media platforms to give customers tips and engage our customers in discourse that will further better our industry and even our customers as well.

SALES AND MARKETING STRATEGY

Marketing Strategy and Sales Strategy

Marketing is a very important aspect of any business, for without marketing a business can fail. Marketing has a double advantage as it not only generates revenue for the company but also ensures that awareness is created for the company directly or indirectly.

We intend to ensure that we develop just the right strategies that will not only keep our loyal customers glued to us but also attract new customers as well. Some of the marketing sales strategies that we intend to use are:

Place adverts in local newspapers as well as in local radio stations about our garriVisit markets and introduce company's garri to garri traders (wholesalers and retailers)Throw a unique opening launch party that will attract interest.Use our official website to vigorously promote our garri processing businessEmpower our marketing and sales team to positively push and better communicate our brand to customers.

Sources of Income

The company like any other business is established with the aim of making profit. However, our profit generation will not only come from one source as we intend to exploit other different means so as to increase the revenue base of our company. Our main focus while diversifying will still be garri processing.

The company intends to generate income from the following sources;

Sale of processed quality garri, Consultancy Services.Training and Coaching

Sales Forecast

Based on location, the sales projection for the company is stated below:

First Fiscal Year-: N5,500,000 Second Fiscal Year-: N9,000,000Third Fiscal Year-: N16, 000,000

N.B: The above sales projection is totally in line with what is obtainable in the industry. The projections are also based on the fact that all factors that were considered during the analysis remain constant – such as the economy, lack of strong substitutes, and the arrival of no major competitors. Also, it is worthy to note that at any given point in time, the above projections might be higher or lower.

Publicity and Advertising Strategy

Due to the fact that almost everyone takes garri, there have sprung up many garri processing businesses all striving to get a share of the market.

Some of the platforms we intend to use in publicizing and advertising our garri processing business include;

Using our van in road shows to tell people in targeted areas about our products and services Placing adverts in local newspapers and on radio ,fliers and legally posting same in strategic points .Creating a website and using the platform to increase awareness of our existence.Using social media platforms such as Facebook to promote our products and services as well as engage our audience .Use recognized holidays to organize socially relevant programs.Ensure that all our staff wear customized tee shirts that will allow customers know of our business.

Our Pricing Strategy

Garri is priced depending on the quantity that is bought by the customer. We intend to have different pricing options for our bulk buyers and our normal buyers.

Our pricing will also be done in such a way that all our costs – overhead and running expenses – are adequately covered, so that we do not run at a loss.

Payment Options

The payment options that we intend to make available to our teeming customers include;

Payment via Point of Sale (POS) Machine Payment via Cheques Payment via Cash Payment via Bank Transfer Payment via Bank Draft


Start – Up Expenditure (Budget)

Setting a budget before a business becomes operational is very vital. The budget allows an entrepreneur know what exactly would be required for the business to become successful and where to allocate resources .

Some of the requirements we would need to fulfill in order to successfully start our garri processing business are;

Fees for incorporation and other legal requirements – N100,000.Obtaining of licenses and permits as well as accounting software – N150,000 insurance coverage (general liability, property insurance and workers’ compensation) – N50,000.Facility rent for a year and renovation –N350,000.Operational cost for at least three months (employees’ salary, bills payments) –N250,000.Cost of purchasing and installing garri processing equipment – N4,500,000.Cost for start-up inventory (Cassava, Palm Oil) – N800,000.Cost of storage facilities (racks, ventilation) – N100,000Cost of hiring business consultant –N50,000.Cost of fairly used distribution van –N800,000.Other start-up expenses (furniture, phone, computer, printers, stationeries) –N200,000.Marketing budget (for promoting launch activities and the business generally for at least a year) – N150,000.Cost of launching a website – N30,000.Cost of garri processing plant launch –N50,000.Miscellaneous – N50,000

Based on the above estimate, we would require at least N34 million in order to successfully start and run a standard garri and flour/starch processing plant in Iseyin, Oyo State. The amount accounts for all expenses for at least three months to a year, which includes employee’s salaries and other operating expenses.

Generating Funding / Startup Capital for the  Business.

Any entrepreneur who does not have the capital necessary to start a business might see his business idea remaining just a dream and not becoming a reality.
The company is a business owned by Mr Adebisi.This is a business that  intend to source for external investors and other means.

Sustainability and Expansion Strategy

Every established business’ aim is to make enough profit that will sustain the company and also ensure that growth and expansion takes place.

Due to this fact, we intend to ensure that we treat our customers right by ensuring we promptly attend to their requests, orders and complaints.

Aside having the required start-up capital necessary to start the business, we know that if the above factors are correctly done, we will be successful at not only sustaining the business and also expanding the business in the long run as well.

Check List / Milestone

Business Name Availability Check:Completed
Business Registration:in progress
Conducting Feasibility Studies: Completed
Writing of Business Plan: Completed 
Design of The Company’s Logo: Completed.
Graphic Designs and Printing of Packaging Marketing / Promotional Materials: In Progress 
Recruitment of employees: In Progress 
Creating Official Website for the Company:In Progress
Creating Awareness for the business both online and around the community: In progress
Establishing business relationship with vendors – wholesale suppliers / merchants: In Progress

Partners and investors wanted nationwide!

Note:
To be a partner, you must have at least 5% shares of the total amount and must have interest in agro processing.
While investment for investors is #100,000 with at least 8% return on investment monthly.
This project is to kick off by April latest next year.

Interested persons can contact on : +2347068679515