Post by Trade facilitator on Dec 6, 2013 23:39:05 GMT 1
A nation that wants to grow must look inwards so as to harness those areas where it has comparative advantage over other nations. When this is done, then efforts would be done to develop those areas to the advantage of the nation.
Apart from petroleum, Nigeria is blessed with other agricultural products, which, when processed and exported, can fetch up to 60 per cent of the nation’s foreign exchange earnings. Unfortunately, some of those natural resources endowed to the country are not fully utilised.
Could you imagine that until recently, before federal government announced the ban on importation of some items, that vegetable oil is being imported into this country? This does not tell well of a nation that wants to generate employment to teeming unemployed school leavers. It does not tell well of a nation that wants to generate more foreign exchange to correct imbalance of payments. It does not tell well of a nation that wants to develop rural areas.
Therefore there is urgent need to think of how to make good use of what we have to get what we want. In this write up we shall discuss on how to establish a project using abundant raw materials grown in abundant in Nigeria; vegetable oil is highly demanded in the international market as well as within the country. Vegetable oil includes Palm oil, Palm Kernel oil, sesame seeds oil, and groundnut oil to mention but few.
Prospective investors will be educated on how to use either local technology or imported machines to set up internationally acceptable product.
Raw Materials and Sources
The raw materials needed to set up this project are cottonseeds, melon seeds, groundnuts, palm nuts or palm kernel sesame seeds etc. All these are grown in all parts of Nigeria. Therefore easy procurement of raw materials is assured.
Uses of Envisaged Product
Vegetable oil is a major ingredient in soap, cream, butter and margarine production. It is used at homes and fast food centres as cooking or frying oil. It acts as a substitute to a more expensive Olive oil, as salad oil. Vegetable oil is therefore used by cosmetic, pharmaceutical, food and beverages industries.
The cottonseed, sesame seeds, melon seed, groundnut and palm kernel cakes are rich in protein and carbohydrate & fats and are necessary input in livestock feeds formulation.
Vegetable oil and cakes are therefore commercially and domestically valuables. As a result no waste is envisaged.
Marketing of the Product
The increase in the demand for soap, cream, butter, margarine and other industrial products, has made the demand for vegetable oil very high. The demand covers not only within Nigeria, but also across the globe. Some companies in Europe, America, Asia and even some part of Africa are readily available to purchase in bulk from those who may wish to exploit the opportunities in international market. Details of such foreign buyers will be given to prospective investors on request.
Technology (Plants and Machinery)
The plant and machinery required depends on the type of product the prospective investor may wish to produce and the raw material input.
From survey carried out the major raw material required include crusher, Toaster, Filter press, refining plant. Other equipment includes receiving tanks; weighing scale, project vehicles etc.
The advantage of the plant is that it has economic efficiency of processing cottonseed, melon seed, groundnut and palm nuts as well as palm kernel.
What the promoters need is to have separate processing shaft for different vegetable oil seeds. The promoters have the option of using either locally made machines or imported ones. Details on how and where to procure and install, quality machines and equipment (both locally made and imported ones) will be given to prospective investors on request.
Production Capacity
Technically, it implies that the processing plant would be worked to its optimal capacity and all the estimated projections would be achieved. Details would be given to prospective investors.
Quality Control
It is advisable to prospective investors to maintain high quality standard so as to attract wider acceptable of the product both internationally and locally. The refinery plant should be well equipping enough to refine an internally acceptable product.
The quality control specified by Nigeria and International Standard Organisation is therefore very essential. Moreover NAFDAC requirements are also very important. Prospective investors will be given details information on these vital issues.
Packaging
Packaging is another important area to pay much attention to. There is internationally recommended method of packaging the vegetable oil. Locally, there may not be much worry about the packaging. In this case the promoters may opt for P.E.T bottles. In terms of international market, adequate care should be taken. Details will be given to prospective investors.
Financial Implications
The project cost for each of the projects depends on the type of raw material to be applied. It also depends on the proposed location and type of machines to be applied. The cost will be established after discussing with prospective investors on all these issues.
Funding
The federal government just released through CBN over N500 billion for injection into small and medium scale industries development in Nigeria. Anybody with good business plan will benefit from the funds. There are also financial institutions and Special Project Funding Organisations that would be recommended to prospective investors on request.
Investment Profit Potentials
The seeds contain 25 per cent of yellow oil. Adopting two processing machines for project take off at 5 tonnes per plant, and working for 300 days, 3,000 tonnes of vegetable oil would be produced in a year. Given 25 per cent as oil content per ton, 750 tonnes of cake would be produced annually. Assuming a conservative price of N125, 000 per tonne, an average of N93.75 million would be made in a year as annual turnover.
Selling in the international market will yield more returns. Further details on comprehensive and bankable feasibility studies and reports, procurement and installation of the machines and equipment (both local and foreign made) test-running recruitment of quality manpower and training, funding arrangement, are available on request.
* Uba Godwin writes from Lagos.
Source: THISDAY LIVE
