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Knowledgepreneur Research-to-Product (R2P) Business Intelligence:


Biofertilizer Business Plan

Thesis · May 2018


DOI: 10.13140/RG.2.2.36519.85928

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PhD T
Thesis Ressearch Ou
utcome

Knowwledgep preneu ur Reseearch-to-Prod duct (RR2P)


B
Business Inteelligencce: Bioffertilizzer Bussiness Plan
P

by

A
Ayodele
e A.Otaaiku Doctooral student, Uniport, NNigeria
Departtment of Geoography and Environmenntal Managem ment, Facultyy of Social sscience, Univ
versity of Porrt
ort Harcourt, Rivers statess, Nigeria Mobile: +234 00803 3721 219
Harcourrt, Choba, Po 2
Email: aotaiku@ggmail.com , Skype
S @Ayo odeleOtaiku

Prospeective Inv
vestor: Suubmitted for
f the con
nsiderationn

ARATIBIO OTECH Lim mited


No 2 Abaggana Close,
Garki 2, AAbuja,
Niggeria.
www.arattibiotech.co
om

Contacct Person: Ayodelee A. Otaik


ku
ayodele.otaiku@aratiibiotech.com
m
+234 803 3721 219

May 226th , 2018


8


 
Abstract

Does the existing management language value knowledge as essential resources for creating value
and wealth? Knowledgepreneur accentuates the role of patents as links for University-Industry
Cooperation. It is very important that university researchers develop a wide range of technologies
and that they are made available for society development. Likewise, it is essential that the results
of work done in university research laboratories - the mainstay of basic research - be protected by
patents. Who is in the best position to come up with these core technologies and patent them? It is
the university researchers doing basic research. All of Nigeria will benefit if the universities do
good research and are conscientious about patenting the results for commercialization.
Development of knowledgepreneur centres within the research community will translate to one-
stop shop where the private sector can deal with all government and bureaucratic matters on
intellectual property and innovation. Alongside this role of facilitator, it will leverages its
relationships with governments to raise concerns that , it must encourage the private sector
innovation driven economy , effectively acting as an intermediary between the two, so that
governments can successfully use the private sector to help their economies grow.
Knowledgepreneur centres will create business forums to promote dialogue between the private
sector and governments so they can resolve any issues preventing businesses from investing in
Nigeria and develop African countries. Knowledgepreneur is the possession of knowledge and
applied experience of foresight for the creation of value and sustainable profits. It is the synthesis
of ideas, capital and talents for the development and sustainability of 21st century economy
(knowledge economy), which is the core foresight technology. It entails a huge investment flows
into human capital as well as information technology. Knowledge is the integral function of
intellectual capital and primarily a navigational tool of the future.

Keyword:
Patent, Knowledgepreneur, Foresight technology, Biofertilizer, Commercialize research,
Conservation agriculture and Climate smart agriculture


 
Architectural Desiggn Bird View B
Biofertilizer Pla d West-Africa - Proposed
ant, Nigeria and

See Appendiix 3 - Biofertiilizer designed and


a developed by
b Aratibiotech
h Limited

PROCESSING
AREA RAW MAT
TERIAL SORTING

TOIILETS
PRODUCTION A
AREA
PA
ACKAGING
STORE

B
BIOFERTILIZER
W
WAREHOUSE
PARKING SPACE
S
STOREAGE
&
E
ENTRANCE EX
XPANSION
LOADING
G BAY

ADMIN & SECU


URITY

Araatibiotech Lim
mited Aratibiotecch Biofertilizer Plant, Proposed for Six Geo-Pollitical Zone, Nig
geria
Managemeent and Investmeent : Franchise
Build, Opeerate and Mainteenance : Franchise owner ( 70%)) and Aratibiotecch Limited (30%
%)


 
A
ADMINISTRATIV
VE BUILDING, BIOFERTILIZER LOADING BAY VIEW FROM TH
HE FACTORY EN
NTREANCE PROP
POSED BIOFERT
TILIZER PLANT

N.B
B: 1. Bill of Quaality (BoQ) is av
vailable on requeest by Investor.
2. For Investoor in the Biofertiilizer Plant. A w
warehouse can bee converted to the Biofertilizer Plant
P for Production.


 
Executive Summary
1.0 The Company
Aratibiotech Limited is a bio-agriculture solution (climate-smart agriculture technology) like OBD-
Plus, OTAI X Plus® and OTAI AG® environmental technology and incorporate 13th August, 2008.
The application of scientific and engineering principles to the processing of materials by biological
agents to provide goods and services. Soil fertility solution and amendments products, manufacture
Proof of Concept partnership with UNDP/OGUN state government at location of Kotopo,
Abeokuta-Ibadan road, opposite the Police Head Quarters, Abeokuta, Ogun state, Nigeria and
business office in Ikeja, Lagos state. Our research and development products of my PhD thesis,
University of port-harcourt, Rivers state, Nigeria and field application and evaluation (2010- todate)
in all agro-ecology in Nigeria.
2.0 The opportunity Aratibiotech Franchise for Farm In-Puts Technologies
Aratibiotech Limited franchise is available to investors who will partner Aratibiotech Input
Technologies for the Agriculture sector in Nigeria ( Biofertilizer Technology). There is only one
Aratibiotech franchise for each geo-political zones in Nigeria with a fee of N20,000,000.00 for five
years ( renewable). Our focus is to export organic food based on the target agro-ecology in Nigeria.
Our partners will build, own and the factory where we operate for the franchise and investor with
ownership structure of sixty-five percent (investor) and thirty percent (Aratibiotech Limited).. The
projected production of Aratibiotech biofertilizer brand yearly is 18,000 tons yearly (six geo-
political zone in Nigeria) and the largest in Nigeria ( see certificates & permit in Appendix 1),
Aratibiotech franchise also includes West Africa.
3.0 The Market
1. The Growth Enhancement Support (GES) Scheme targets I million metric tons of fertilizer with 10
million registered farmers for the GES programme.
2. Fertilizer use has increased from 6.1kg/ha to 43-45 kg/ha for farmers benefiting under the GES
Programme at 2 bags (50 kg each) per farmer.
3. Five million farmers are added to the GES database yearly requires 500,000 metric tons .
4. Nigeria fertilizer requirement yearly is 5 million metric tons yearly.
5. The biofertilizer off-takers (see Appendix 4 for lists of off-takers with express of interest letter)

4.0 Conclusions
1. Financial require is N157,189,500.00 ( see Table 1 below) for 250 tons of biofertilizer monthly
(3000 tons yearly). See cost breakdown in pages 30-32 below.
2. Pay-back for the return on investment is 3 years 15 days. ( see Table 2 below and financial
projection in part five of the business plan for details. pages 64-77)
3. Milestones: Plant development
a. Machine fabrication and testing ten (10) weeks
b. Factory equipment installation and product test – run (ten (10) weeks) .With warehouse as factory
Plant location in-place. Product development and commission will take twelve (12) weeks from the
day of Project award and Memorandum of Understanding (MoU).
4. Profitability Indicators (Net Present Value )
Decision: IRR. The result of the above calculation shows that the IRR is 15.23 %. The indication is
that borrowing at a rate higher than the IRR of 15.23% will make the project to be unviable except
where the rate to finance the project is lower, it will become viable.
5. The biofertilizer Plant can commence on a warehouse ( on lease budget capture in the income
statement with N5,000,000 yearly) and the Aratibiotech Limited Biofertilizer Plant Architectural
designs ( see Pages 3-4 and Appendix 8) . The Bill of Quality ( BoQ) available on request to
investors.
© 2016 ARATIBIOTECH Limited 5
Investment Decision
Table 1. Summary of Costs for Biofertilizer Plant 250 ton monthly
N/S Summary of Costs Amount (N) A Amount (N) B
Particulars Fixed costs Recurrent costs
1 25 units of 6 feet by 6 feet digesters (construction) 26,000,000.00
2 Logistics /production Truck (2) and Toyota Tacoma (2) 40,000,000.00
3 Biofertilizer Production Costs (25 Digesters) monthly 18,450,000.00
4 Production Machines (5,000 units 50 kg biofertilizer) 53,500,000.00
Dryer, weighing , sewing machine etcs
5 Laboratory Equipment 5,239,500.00
6 Generators 100 KVA (2) , 30KVA 10,000,000.00
10 Accommodation Operation yearly 4,000,000.00
134,739,500.00 22,450,000.00
Total Costs A+B 157,189,500.00

Total Cash Receipt Project , 5 Years Biofertilizer Plant by Aratibiotech Ltd


 1,000,000,000
Naira (N) 

 800,000,000
 600,000,000
 400,000,000
 200,000,000
 ‐
YEARS YEARS 1 YEARS 2 YEARS 3 YEARS 4 YEARS 5
=N= =N= =N= =N= =N= =N=
INVESTOR FUND (N) 157,189,5 ‐ ‐ ‐ ‐ ‐
Sales Proceeds 420,000,0 504,000,0 604,800,0 725,760,0 870,912,0
TOTAL CASH RECEIPT 157,189,5 420,000,0 504,000,0 604,800,0 725,760,0 870,912,0

Figure 1 Total Cash Receipted


Table 2. Payback Period

Payback Period  (PBP )
YEAR        CASHFLOW   =N= CASH IN FLOW  =N= CUMMULATIVE CASH IN FLOW  =N= BALANCE  =N=
0 ‐157,189,500 ‐157,189,500
1                    27,734,750                                                    27,734,750 ‐        129,454,750
2                    40,216,278                                                    67,951,028 ‐          89,238,472
3                    66,176,454                                                  134,127,482 ‐          23,062,018
4                  149,725,165
5                  187,107,819                                                                   ‐                          ‐
                                                 229,813,260

3  +  23,062,018/149,725,165

3.15years

© 2016 ARATIBIOTECH Limited 6


ACKNOWLEDGEMENTS
This work is sixteen years research and development by Ayodele Otaiku and Field application and
evalution by Federal Fertilizer Department ( Federal Ministry of Agriculture and rural development
team) between 2010-2016. Also, include research institutes national who help calibrate the
agriculture in-puts technologies. Local and internation exhibition, workshop and training was
conducted with 2010-2016. Also, UNDP and NESREA where significatly important as regulatory
agency for the technology adption.
Professor G.O Adeoye - University of Ibadan, Ibadan, Oyo state
Professor B.A. Oso - Afe Babaloala University, Ado-Ekiti, Ekiti state
Professor Yekini Abayomi (Late, Oct., 2016) - National Sugar Research Institute , Unilorin, Kwara
state
Dr. A. A. Soretire- Federal University of Agriculture, Abeokuta, Ogun state
Dr. V. O. Aduramigba- Modupe , Institute of Agricultural Research and Training, Moor Plantation,
Ibadan, Oyo state
Dr.A, O. Ano National Root Crops Research Institutes, Umudike, Abia state
Dr.S.O. Bakare - National Cereal Research Institute, Badaeggi, Niger state
Federal Fertilizer Department ( Federal Ministry of Agriculture and rural development team
1. Mr A.O Osho (Retired)
2, Isa Adamu
3. Mr E. Abara
4. Mr A. olayiwuola (Retired)
And Special Thank to Engr. Sola Alabi (Toss and Company Limited).

© 2016 ARATIBIOTECH Limited 7


Tables of Content
Document Issue Authorization 2
Executive Summary 5
Acknowledgements 7
List of Tables 10
List of Figures 11
List of Plates 12

PART ONE BACKGROUND 13

CHAPTER ONE – INTRODUCTION 14

1.0 The Company 14


1.1 Aratibiotech Limited –Bioagriculture technologies 16
1.2 Organic Fertilizer Technology 18
1.3 Similar Project Executed 18

PART TWO MARKET FEASIBILITY 19

CHAPTER TWO - PRODUCTS & SERVICES 20

2.1 Industry Trends 20


2.2 Market Segments 21
2.3 The Competition 22
2.4 The Customers 23

CHAPTER THRE - SITE AND LOCATION ANALYSIS

3.0 Factory -Input Sourcing and Procurement 25


3.1 Aratibiotech Franchise for ARATI Agro-Corridor 26
3.2 Operations and Production 28
3.3 Sales and Marketing 29
3.4 Costs Breakdown Structure- Financial Biofertilizer Plant 30

CHAPTER FOUR - MARKET ASSESSMENT 33

4.0 Market Analysis 33


4.1 Marketing Strategy 35
4.2 Sales Plan 37

© 2016 ARATIBIOTECH Limited 8


PART THREE TECHNICAL 39
CHAPTER FIVE - AGRICULTURE IN-PUTS TECHNOLOGIES 39
5.0 Products 40
5.1 Processing Technology 41
5.2 Manufacturing Plants Development 43
5.3 Aratibiotech Fertilizer Brand 46
5.4 Aratibiotech Biopesticides 46
5.5 Critical Risk Factors 56

PART FOUR - ORGANIZATIONAL STRUCTURE 57


CHAPTER SIX : BUILDING RESILIENCE
6.0 Development Plan 58
6.1 Universities /Institutions Research Link 58
6.2 Staffing Requirements 58
6.3 Financial Planning & Capital Structure 61

PART FIVE - FINANCIAL 64


7.1 Income Statement Projections 65
7.2 Cash Flow Projections 67
7.3 Statement of Financial Position 69
7.4 Break -even Analysis 72
7.5 Profitability Indicators 73
7.5.1 Net Present Value (NPV) 73
7.5.2 Payback Period (PBP) 74
7.5.3 Returns on Capital Invested 75
7.5.4 Net Profit Margins 76
7.5.5 Gross Profit Margins 77
7.6 Investment Repayment Schedule 78
8.0 Conclusions 79
Bibliography 80

APPENDICES
Appendix 1 - Certificates & Permit 81
Appendix 2 - Field Application and Evaluation in different Agro-ecology, 85
Nigeria
Appendix 3 - Biofertilizer designed and developed by Aratibiotech Limited 88
Appendix 4 - Appendix 4 - Lists of Off-takers and Federal Ministry 90
of Agriculture , Abuja Invitations
Appendix 5- Farmers Field School (FFS) Programme 104
Appendix 6 - Aviation Technology (Air Tractor for Pollution Control ) 105
Appendix 7 - Exhibitions, Conferences & Workshop 106
Appendix 8 - Aratibiotech Limited Biopesticide Plant Architectural 110
Model 3-Design, Nigeria
© 2016 ARATIBIOTECH Limited 9
LIST OF TABLES
Table 1. Costs Breakdown Structure- Financial Biofertilizer Plan
Table 2 . Production Cost of Biofertilizer
Table 3. Laboratory Equipment
Table 4. Production of Biofertilizer per digester
Table 5. Equipment Fabrication for Biofertilizer Plant
Table 6. Summary of Costs for Biofertilizer Plant 250 tons monthly
Table 7 .Lists of Aratibiotech brand off-takers
Table 8. .Lists of Aratibiotech brand off-takers and contact
Table 9. The Physio-Chemical Properties for Aratibiotech Fertilizer Brand
Table 10 Projected Elements of a Potential strategy for Business Development
Table 11. Project Schedule for for Aratibiotech Limited
Table 12 . Showing Aratibiotech Limited human resource
Table 13. Income Statement Projections
Table 14. Cash Flow Projections
Table 15 Projected Statement of Financial Position for five (5) years
Table 16 . Movement in Non-current Asset
Table 17. Break -even and Ratio Analysis
Table 18. Net Present Value (NPV)
Table 19. Payback Period (PBP)
Table 20. Returns on Capital Invested
Table 21. Net Profit Margins
Table 22. Gross Profit Margins
Table 23. Investment Repayment Schedule

© 2016 ARATIBIOTECH Limited 10


LIST OF FIGURES

Figure 1. Aratibiotech Limited Agro-Ecology Training & Empowerment value chain model
Figure 2 Aratibiotech Limited management innovation framework
Figure 3. Aratibiotech Bio-Agriculture - Solution
Figure 4. Framework of Aratibiotech Limited Technology Management for Franchise
Figure 5. Fertilizer requirement in Geo-political zone, Nigeria
Figure 6 ARATI Agro-Corridor Park: Niger Delta Agro-Ecology Job Creation Value chain.
Figure 7. Agro-Wealth and Job Creation Framework for ARATI Agro-Wealth® Management
Figure 8. The commercial agriculture in Nigeria will focus on industrial agriculture in six
different agro-ecology in Nigeria.
Figure 9. Our optimization protocol
Figure 10. The learning cycle of farmer field school
Figure 11. Schematic of biofertiliser (Gateway) production from bio-waste feedstock.
Figure 12. Anaerobic digestion is a multi-stage process
Figure 13. Biochemistry & Molecular Biology of Plants
Figure 14. Blight of sesame pathology world distribution map
Figure 15 .Gross Profit Sales of Gateway Biofertilizer
Figure 16. Income statement Projected for five (5) years.
Figure 17 Total Cash Receipted
Figure 18 Cash flow projections for 5 years
Figure 19 .Current Assets
Figure 20. Equity & Liabilities
Figure 21. Current Liabilities
Figure 22. Movement of Non- current asset
Figure 23. Return on Capital Employed
Figure 24. Net Profit Margins
Figure 25 Gross Profit Margins

© 2016 ARATIBIOTECH Limited 11


LIST OF PLATES

Plates 1. Model of Farmers Field School in Minna, 2011 for 100 farmers by Aratibiotech Limited
Plates 2. Model of Farmers Field School in Minna, 2011 for 100 farmers by Aratibiotech Limited
Plate 3. Fertilizer Brand Produce using OBD-Plus biodegrader Biotechnology OBD-Biofertilizer
(25kg)
Plate 4. ARATI OMF ( Organo-Mineral Fertilizer) (25kg)
Plate 5 Slasher
Plate 6. Milled Machine
Plate 7 Granulator / Grinder
Plate 8. Drying Machine Model KRG 12
Plate 9 . New design to capture biogas produced
Plate 10. Old design do not capture biogas produced.
Plate 11. Sesame grown with ARATI Biopesticide, FUNNAB, Abeokuta, Oct., 2016 and pictures
by Prof. Victor Olowe.
Plate 12. Blight of sesame crop .The causal organism. Alternaria sesame. Symptoms - The
pathogen attacks all parts of the plant at all stages - Small, dark brown water soaked
Plates 13. Ayodele Otaiku (Aratibiotech Limited ) at the factory with a client, Abeokuta Plant
Plate 14. ARATI won the Shell Nigerian Content Development (NCD) Exhibition, Port
Harcourt, Rivers state, Nigeria, 2013: Ninety-eight (98) companies was invited for the 3rd
Shell Nigerian Content Development, 8-9th Oct., 2013 exhibition. ARATI won the Best
Exhibitor at the 3rd Shell NCD event: Bioremediation, soil restoration and growth of
exotics crops in the tropics technologies

© 2016 ARATIBIOTECH Limited 12


PART ON
NE BACK
KGROUND
D 13

CHA
APTER ONE
O – INTR
RODUCTIION 14

1.0 The Comp pany 14


1.1 Aratibiotecch Limited –Bioagriculture technoologies 16
1.2 Organic Fertilizer
F Teechnology 18
1.3 Similar Prroject Execuuted 18

Crops grown wiith Aratibiootech Fertiilizer Brand


d

Soy Bean
B (3 ton//ha) Maize 4 ton/ha

Third Affrican Orga


anic Conferrence, Nigeeria Octobeer 5-9, 20155

© 2016 AR
RATIBIOTECH
H Limited 13
PART ONE BAC
CKGROUN ND
TER ONE
CHAPT E - INTRODUCTION
N

1.1 The Company


y
Aratibiootech Limitted is a bio--agriculturee solution ( biofertilizeer and biopeesticide) com mpany. Wee also
deployiing OBD Pllus® environnmental tecchnology annd incorporaate 13th Auggust, 2008. The appliccation
of scienntific and enngineering principles
p too the processsing of maaterials by biological
b a
agents to pro
ovide
goods aand servicess. Soil fertillity solutionn and amend dments products, manuufacture OB BD-Biofertiilizer.
locationn of Kotoppo, Abeokuuta-Ibadan road, oppo osite the Poolice Head Quarters, Abeokuta,
A Ogun
O
state, Nigeria
N and business office
o in Ikeeja, Lagos state. Our research
r annd developm ment start since,
s
2000 annd field application andd evaluationn (2010- toddate) in all agro-ecology
a y in Nigeriaa.

Figure 1.
1 Aratibiottech Limitedd Agro-Ecoloogy Training & Empowerrment value chain model

Broad participation across


a all parrts of the vallue chain

Rice cuultivation ARAT Rice


R Rice Milll

© 2016 AR
RATIBIOTECH
H Limited 14
 THE PRODU
UCTS

Bio-ferttilizer is a large population off a specifi fic or a grroup of beeneficial micro-organ


m isms,
incorpoorated asepttically into sterile carrrier materiaals such as plant, peatt, lignite orr charcoal. Such
materiaal is thereaftfter packed and sold too the farmerrs as bio-feertilizers forr enhancingg productiviity of
soil eithher by fixinng atmospheeric nitrogenn or by soluubilising soil phosphorrous or by stimulating
s plant
growth through syn nthesis of ggrowth prom
moting substtances.

 PRODUCTS
S BRAND
Bioferttilizer Prodduction
The OB BD-Plus® microbes
m ass microbiall inoculant organisms are comm monly used as biofertillizers
(Gateway) compoonent are nnitrogen fiixers (N-fixxer), potassium solubbilizer (K-ssolubilizer) and
phosphoorus solubiilizer (P-soolubilizer), or with thee combinattion of molds or funggi. Most of the
bacteriaa included ini biofertiliizer have cllose relationnship with plant rootss. Rhizobium m has symb biotic
interacttion with leggume roots,, and Rhizobbacteria inhhabit on rooot surface orr in rhizosphhere soil.

 Biopesticid
des and Bioopesticide Controls
C off Plant Diseeases

Biopestiicides, a conttraction of ''biological peesticides', incclude severaal types of peest management interventtion:
through predatory, parasitic,
p or chemical
c relaationships. Thhe term has been
b associaated historicaally with
biologiccal control - and
a by impliccation - the m manipulation n of living orrganisms. Thhe need to feeed an ever-
growingg global popu ulation combbined with increasing dem mand for susttainable agriccultural pracctices has fueelled
a significant rise in demand
d for bbiopesticidess. Biopesticiddes offer uniqque benefits all along thee food value
chain, prroviding addditional optioons for groweers, buyers, dealers,
d conssultants and retailers.
r Whhile biopesticides
have beeen around for more than 50 years, thee market has experiencedd its most significant period of growth h in
a user acceeptance over the past fivee years. The use
terms off both sales and u of biopessticides has become
b a
commonn practice in many horticuultural crop pprotection prrograms. Bioopesticides are effective tools t in integ
grated
pest mannagement (IP PM) program ms for helpingg to manage resistance to synthetic chemical pessticides and
reduce worker
w and environmentaal exposure too synthetic pesticides.
p M
Multiple studies have docuumented the
developm ment of resisstance by patthogen and pest
p populatio ons to chemiical pesticidees. Converseely, the risks of
developiing resistancce to biopestiicides are exttremely low - even as bioopesticide usse continues to t increase.

© 2016 AR
RATIBIOTECH
H Limited 15
Technoology Valid dation and E Endorsemeent
1. Depaartment of Petroleum
P R
Resources (DDPR)
2. Federral Ministryy of Environnment, Abujja
3. Natioonal Biotechhnology Devvelopment A Agency, Abbuja
4. High--Level Africcan Panel on Modern Biotechnolo
B ogy of the African
A
5. New Partnershipp for Africa’s Developm ment (NEPAAD)
6. Indeppendent Labboratory: IEESL, Lagos..
7. The Presidency,
P Abuja..
8. Petrooleum Techn nology Devvelopment FFund (PTDF F)
9. NNP PC (Researchh and Deveelopment)
10. Portt Harcourt Refinery
R Coompany (PH
HRC)
11. NES SREA (National Enviroonmental Standard Reg gulation Evvaluation Aggency) , Abuuja.
12. NOSDRA (Nattional Oil SpillS Detectiion & Respoonse Agenccy), Abuja.

 Competitiive Edge
d biotechnological knoow-how: whhich makes Aratbiotechh the only company
1. Innoovation and c
manufaacturing Orgganic Bio-feertilizer in N
Nigeria withh federal ferrtilizer depaartment, Abuuja approvaal
and see attached doocuments. T
The only bioofertilizer (ssolid) registtered with Federal
F fertiilizer
departmment (patentt).
© 2016 AR
RATIBIOTECH
H Limited 16
2. Custtomer serviice: Custom
mer service iis our numbber one priorrity and prooducing bioffertilizer forr
each specific soil requirement
r t and crop yield
y with esstablishmennt of farmerss’ field schoool.

3. Facillities: All thhe facilities in terms off technologyy and raw materials
m thaat we could need are
already present loccally

4. Techhnology Aw ward: The biodegradab


b ble microbe (environmeental biotechhnology) is patented in n
Nigeriaa and an awaard winner ini Shell Niggerian conteent exhibitioon, Oct., 8-99, 2013, Sheell IA, Port
Harcourrt.98 compaanies particiipated and ssee attached
d document and other local and intternal award ds
and see section tenn attached.

Over 155 Academicc publicationns of the effficiency andd efficacy of


o the Aratibbioech fertillizer brand in
i
th
Proceeddings 7-9 Annual
A Connference of Organic Aggriculture Prroject in Tertiary Instittutions in
Nigeriaa (OAPTIN)) and see myy resume atttached.

© 2016 Aratibbiotech Limitted

Fiigure 3. Arratibiotech Bio-Agricuulture – Soluution

1.2 Orrganic Ferttilizer Tech hnology


OBD-P Plus® Technnology was invented bby Professo or B. A. Oso of the Department
D t of Botanyy and
Microbiology, form merly of Unniversity off Ibadan, Ibadan, Nigerria. It acts rapidly
r on refuse
r [garb
bage]
breakinng it down into
i nutriennt rich orgaanic fertilizeer within foour (4) weeeks as comppared to upp to 6
months in the absence of thee material. A biodegraader OBD-P Plus® is mixed with thhe slashed dried
refuse which
w is thhen loaded into a diggester. The microbial formulationn composedd of a pow wdery
substannce speciallyy producedd from Plannt extracts and heavilyy impregnaated with sppecial strainns of
micro-oorganisms capable
c of rapidly brreaking dow wn organicc matter. Itt breaks do own refuse into
nutrientt-rich-organnic fertilizerr within as sshort a periood as four (44) weeks.

© 2016 AR
RATIBIOTECH
H Limited 17
Meetingg with Agricu
ultural Fertiliizer Sector S
Stakeholders in Abuja witth the Fef M
Min of Agricu
ulture Chie Audu
A
2 nd Nov., 20
Ogeh , 22 015 ( see Apppendix 4 forr details).

1.3 S Similar Projeect Executed


d
Please, see Appendiix 3 below.

© 2016 AR
RATIBIOTECH
H Limited 18
PART TWO MARKET FEASIBILITY 19

CHAPTER TWO - PRODUCTS & SERVICES 20

2.1 Industry Trends 20


2.2 Market Segments 21
2.3 The Competition 22
2.4 The Customers 23

CHAPTER THRE - SITE AND LOCATION ANALYSIS

3.0 Factory -Input Sourcing and Procurement 25


3.1 Aratibiotech Franchise for ARATI Agro-Corridor 26
3.2 Operations and Production 28
3.3 Sales and Marketing 29
3.4 Costs Breakdown Structure- Financial Biofertilizer Plant 30

CHAPTER FOUR - MARKET ASSESSMENT 33

4.0 Market Analysis 33


4.1 Marketing Strategy 35
4.2 Sales Plan 37

© 2016 ARATIBIOTECH Limited 19


PART TWO
T MAR
RKET FEAS
SIBILITY
CHAPT
TER TWO - MARKKET FEASIBBILITY

2.1 Ind
dustry Tren
nds

Grape pllanted with Aratibiotech


A Biofertilizerr Suger Cane Planted withh Aratibiotecch Biofertilizzer
Minna, Niger
N State, Nigeria Uniiorin, Kw
wara state, Nigeria
N yieldd, 50 tons/ haa

© 2016 AR
RATIBIOTECH
H Limited 20
2.2 Maarket Segm
ments

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RATIBIOTECH
H Limited 21
2.3 The Competittion

Currenttly only ARRATIBIOTE ECH Limited produce B


Biofertilizerr in Nigeria.100 percernnt of the maarket
share iss inorganic fertilizer.
f

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RATIBIOTECH
H Limited 22
The twwo fertilizerr manufactuuring comppanies – th he Federal Super phossphate Ferttilizer Com mpany
(FSFC)) set up in 1976 and thhe Nationall Fertilizer Company of o Nigeria (NAFCON)
( ) set up in 1988
have both been grounded
g b poor puublic sectorr managem
by ment. They have been out of seerious
producttion for nearrly 10 yearss now. The two plans have h an insttalled capaccity of over 1 million metric
m
tons per annum. All A attemptss to turn theem around have failedd. This madde the Fedeeral governm ment,
under itts privatizattion policy to
t sell them
m out to privvate entrepreeneurs. It is expected that they will
w be
back onn stream as private
p enteerprises in thhe very neaar future.

A numbber of blendding plants emerged


e aftter the estabblishment off NAFCON N, that provided cheap urea,
u
the main input for blending. From F 1986 tto date morre than 25 suuch plants were
w establiished. Mostt of
them were established by the State Goverrnments (abbout 20) while the privaate sector ho olds the
5 They toggether had aan installed capacity off about 1.8 million
remainiing (about 5). m mettric tons perr
annum. With the closure
c of NAFCON,
N m
most of thesse plants esppecially thosse owned byy State
Governnments weree forced to shut s down aas they couldd no longerr source cheeap urea for blending. The T
few thaat are operatting are mosstly those ow wned by thee private secctor and 2 or
o 3 State Government
G
owned, which are operating
o att less than 330% capacitty. In additioon there aree 4 or 5 plannts producinng
crushedd rock phospphate, agricultural limee, granulated d limestonee and kaolinn for blendinng, and one for
micro nutrient
n fertiilizer produuction. These are also producing
p veery limited quantities. Aratibiotech
A h
Limitedd is the onlyy biofertilizeer plant in Nigeria.
N

2.4 The Customers

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The bioofertilizer Up-takers
U aree:
1. Federal Minnistrry of Agriculture
A aand Rural Developmen
D nt under thee growth enhhancement
scheme (GE ES).
2. The All Farrmer’s Assoociation of N Nigeria (AF
FAN) in 36 states of Niigeria.
3. State goverrnment miniistry of agriiculture
4. Local goveernment areaa (LGAs) annd 774 natioonwide.
5. Farms Planntation in West
W Africa
6. All federal research institues natioonally
7. Agriculturaal developmment board nnationally
8. Nigerian medicial
m plannt company, Abuja
N.B: See Appendix
A 4
Augustt 5-12, 20166 , ISHS, IIITA Ibadan
n, Nigeria

© 2016 AR
RATIBIOTECH
H Limited 24
TER THR
CHAPT REE - SITE
E AND LOCATION ANALYSIS
A S

3.0 Factory
F -In
nput Sourciing and Proocurement
We begin conduccting the feasibility of the buusiness initiiative from m the inpu ut sourcing and
procureement stage. The technnical dimenssion analysiis at this staage encomppasses the avvailability of
o the
requiredd inputs in the
t approprriate levels of quality and a quantityy with focuss on indigen
nous technoology
for bioffertilizer maachine fabriication ( ouur affiliate company
c ww
ww.aratisheea.com). Thhe assessmeent of
availabiility involvees an evaluation of cyccles and treends for bothh quantity and
a quality of the inpu uts. If
specificc human resources andd technologgies are reqquired to faacilitate thee effectiveness of the input
sourcing and procuurement staage, their avvailability is i assessed within the domain of the projectt site.
Likewisse, the infr frastructure support foor effectiveely procurinng inputs from
f origin
nation poin
nts to
processsing facility was addresssed using thhe framewoork in Figure 4 below.
The ecconomics of o input soourcing andd procurem ment emanaates directly y from thee technical and
operatioonal assessm ment. The prevailing
p m
market pricces of inputts as well as
a costs asso ociated withh the
procureement are assessed
a at the input sourcing
s and procurem a key facctors in the shea
ment stage are
butter price
p outcomme of the production.
p The objectiive is not too determinee the price but
b the rang ge of
prices thhat have beeen typical in the domaiin (locationn) over a reaasonable perriod of timee to allow fo
or the
capture of the trends and cyclles in the prrices. The price
p trends and cycles can be mattched againsst the
quantityy and qualiity trends and
a cycles to provide insights innto potentiaal bottleneccks in the input
sourcing and procu urement funnction of thee business innitiative undder consideration.

Source: Vincent
V Amannor-Boadu
Figure 4. work of Araatibiotech Limited Tecchnology Management for Franchiise
4 Framew

Note Soource
The value chain conceept was develooped by Michaael Porter of Harvard
H in his 1985 book, Competitive
C Advantage,
A con
ncept
note by Vincent
V Amannor-Boadu Vallue-Added Buusiness Develo opment Program, Departmeent of Agriculltural Econom
mics,
Kansas State
S Universitty.

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RATIBIOTECH
H Limited 25
3.1 Araatibiotech Franchise
F f Farm In
for n-Puts Tech hnologies
Aratibiootech Limitted Franchisse is availabble to investtors who wiill partner Aratibiotech
A Input
Technoologies for th he Agricultuure sector inn Nigeria ( Biofertilizeer Technologgy and Bioppesticide
Technoology) and see appendicces for detaiils. There iss only one Aratibiotech
A h Franchise for each
geo-pollitical zoness in Nigeria with a fee ofo N20,000 0,000.00 foor five yearss ( renewablle). Our focu
us is
to export organic food
f o the Targeet commodiity value beelow. Our paartners will build, own and
based on
Aratibiootech Limitted will operate for the investor wiith ownershhip structuree of seventyy percent
(investoor) and thirtty percent (A
Aratibiotechh Limited). Prospectivee investor who
w want thhe equity of
Aratibiootech Limitted should write
w for thee expressionn of interest as sharehollder.

Figuure 5. Fertillizer requireement in Geeo-Political zone, Nigerria

© 2016 AR
RATIBIOTECH
H Limited 26
Figure 6 . ARATI Agro-Corrido
A or Park: Nigger Delta Aggro-Ecology Job Creation
n Value chainn.

F
Figure 7. Agrro- Wealth and
a Job Creaation Framew
work for ARA Wealth ® Mannagement
ATI Agro-W

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H Limited 27
Figure 8. The commmercial aggriculture inn Nigeria will
w focus onn industrial agriculture
a in six differrent
agro-eccology in N
Nigeria.

3.2 Opeerations an
nd Productiion

The trannsformationn of inputs into outputts occurs at the operatiions and prooduction staage of the value
v
chain. For
F project proponentss, this is also the stage that will generally absorb the lioon’s share of o the
investm
ment capital by the invvestor to owwn the Aratiibiotech Lim mited manuufacturing plant.
p Thereefore,
from capital resouurce allocaation perspeective, the feasibility requiremeents at the operationss and
producttion stage have
h been conducted
c w all thee diligence necessary to
with t address all the requ uisite
producttion issues and fieldd evaluation of Aratibiotech feertilizer braand (2010--2016). Factory
producttion calendaar yearly =2230 days forr Biofertilizzer machine installed buutter capaciity production of
6 tons/dday (250 tonns monthly)).
The tecchnical feassibility assessment at operations
o and
a producttion stage of o the valuee chain has been
validateed by federaal ministry of agricultuure and ruraal developmment ( fertilizzer departm
ment, Abuja. The
proposeed plant hass the capaciity of 3000 tons biofeertilizer yeaarly. We seeeks partnerss in the six geo-
politicaal zones to establish faactory in eaach zone naationally. Within
W the value
v chain frameworkk, the
feasibility assessm
ment of the ooperations and
a production technollogies was conducted
c b laying ou
by ut the
physicaal process from
f input receipts to packaging and transfe fer to storagge and wareehousing an nd/or
deliveryy. Our businness model on the costt benefit anaalysis has inncrease the initial produuction yearrly by
twenty percent yeaarly in each plant with reference
r too the return on investment

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Warehousing, Storage and Delivery
Proposal value-added (architectural design to optimize capacity and effectiveness, see appendix 8
below) . Alternative sources of warehousing and storage of Aratibiotech fertilizer brand supply for
all year production and strategic alliance opportunities nationally with strategic location of our
factory in each geo-political zones in Nigeria. Our technologies for product tracking systems, space
utilization and turnover management systems, etc are all lined to national research institutes
nationally ( see Appendix 8)

3.3 Sales and Marketing


Marketing and sales is often taken for granted in feasibility studies. However, they provide a direct
insight into the structure, conduct and performance (SCP) characteristics within the project’s
marketplace. Consequently, sales and marketing feasibility assessment bridges the intra-firm with the
extra-firm feasibility dimensions. Market or industry structure and size distribution in the marketplace
for our product will be enhanced by thirty party marketing like www.huetzmobile.com.
Finally, the industry performance assesses the profitability of the project in the industry. This requires
information on prices, product quality, technical progress and industry capacity utilization cum
optimization. The field evaluation reports have attracted investors and off-takers in the industry both
local and internationally. A technically and environmental regulations that are in place and their
technical and economic compliance are all in the best global practice.

Customer Service and Support


What do customers want? Ask them. The final step in the value chain framework of the feasibility
assessment is finding out what customers’ needs are not being satisfied by the current marketplace
(see Figure 5). Since customers are the final arbiters on the success of a product, assessing how the
project’s offering addresses their unmet needs is fundamental to the project’s economic feasibility(see
Appendix 2, field application and evaluation based on agro-ecology of Nigeria). The purpose of the
customer service and support segment is to determine if the proposed project’s offer stands to make a
difference in satisfying customer needs. The results provide a credible input into the project’s
differentiation index and allow the proponents to identify the appropriate placement and promotional
options to employ including project capital structure by each investors to located in each geo-political
zones.

© 2016 ARATIBIOTECH Limited 29


3.4 Costs Breakdown Structure- Financial Biofertilizer Plant

Table 1. Costs Breakdown Structure- Financial Biofertilizer Plan

S/N Description Amount (N)


1 Raw Material
Agricultural Wastes: 270,000.00
* Poultry
* Piggery
* Palm Kernel waste etcs
2 Biodegradable microbes 150,000.00
3 Cost per digester:
(i) Dryer 250 litres Diesel @N200 per litre 50,000.00
(ii) Generator Diesel 500 Litres @N200/Litre 100,000.00
(iii) Oil 10,000.00
(iv) Labour 50,000.00
4 Production of 230 Bags for 50 kg 70,000.00
Total 700,000.00

Table 2 . Production Cost of Biofertilizer

Parameters Amount (N)


1 Total units of digesters: 6 meter by 6 meter 25 units
2 Each digester produces: 200 bags of 50kg
3 Production capacity of 25 units of digesters: 5,000 bags of fertilizer
4 Production time: 1 month
5 Production cost of each digester: N700,000.00
6 Production of 25 units of digesters: N17,500,000.00
7 Total Production 50 kg each of 5,000 units 18,450,000
8 Sales of 5,000 units of biofertilizer @ N7000 50 kg each 35,000,000.00
9 Revenue from 5,000 units sales monthly 16,550,000.00
10 Production cost per 50 kg biofertilizer bag N3,690.00
11 Revenue per unit of 50 kg biofertilizer N3,310.00
12 Percentage of each of 50 kg unit sale of biofertilizer 47.30%

© 2016 ARATIBIOTECH Limited 30


Table 3. Laboratory Equipment

N/S Description Amount (N)


1 Autoclave 250,000.00
2 Oven 90,000.00
3 Water Bath 100,000.00
4 Weighing Balance 70,000.00
5 Spectrometer 400,000.00
6 Digestion Block 200,000.00
7 Fume Cupboard 150,000.00
8 Incubator 250,000.00
9 Furnace 250,000.00
10 Refrigerator 200,000.00
11 Microscope 150,000.00
12 Shaker 130,000.00
13 Desiccator 100,000.00
14 Sohkex Extractor 250,000.00
15 Hydrometer 100,000.00
16 Refactometer 100,000.00
17 Flame photometer 350,000.00
18 GPS 300,000.00
19 Chemicals, petri dish etcs 500,000.00
20 Lab Top/Printer 750,000.00
21 Digital Camera 300,000.00
Sub-Total 4,990,000.00
VAT @5% 249,500.00
Grand Total 5,239,500.00

Table 4. Production of Biofertilizer per digester


N/S Summary of Operations Costs Amount (N) Monthly Costs of Sale Monthly Sales @ 50 kg (N) Monthly Revenue (N) Yearly Sales (N)
Particulars Each Digester 25 digester
1 Marketing /Sales/Promotion 100,000.00
3 Laboratory chemicals 100,000.00
4 Production Costs 700,000.00 17,500,000.00
b Engineer 150,000.00
c Admin Office 400,000.00
d Managing Direction 200,000.00
Total 18,450,000.00 35,000,000.00 16,550,000.00 198,600,000.00

© 2016 ARATIBIOTECH Limited 31


Table 5. Equipment Fabrication for Biofertilizer Plant

N/S Equipment Fabrication Quantity Unit Costs Amount (N)


1 Slasher 3 2,500,000 7,500,000.00
2 Dryer 4 5,000,000.00 20,000,000.00
3 Mixer 3 2,500,000.00 7,500,000.00
4 Granulator / Grinder 3 2,500,000.00 7,500,000.00
5 Shaker 2 2,000,000.00 4,000,000.00
6 Sealer 2 1,000,000.00 2,000,000.00
Miscellaneous Lum sum Lump sum 5,000,000.00
A Sub-Total 53,500,000.00
Digesters (25 units) = 5,000 units of 50kg
fertilizer
1 Digesters ( height 10 by length 10 feet) 25 units 600,000.00 15,000,000.00
2 Gas collectors , cylinders , control valve Lum sum 4,000,000.00
3 Gas regulators / thermometers 25 units Lum sum 4,000,000.00
Miscellaneous Lum sum Lum sum 3,000,000.00
B Sub-Total 26,000,000.00
Total 79,500,000.00
VAT @5% 3,975,000.00
Grand Total 83,475,000.00

Table 6. Summary of Costs for Biofertilizer Plant 250 tons monthly

N/S Summary of Costs Amount (N) A Amount (N) B


Particulars Fixed costs Recurrent costs
1 25 units of 6 feet by 6 feet digesters (construction) 26,000,000.00
2 Logistics /production Truck (2) and Toyota Tacoma (2) 40,000,000.00
3 Biofertilizer Production Costs (25 Digesters) monthly 18,450,000.00
4 Production Machines (5,000 units 50 kg biofertilizer) 53,500,000.00
Dryer, weighing , sewing machine etcs
5 Laboratory Equipment 5,239,500.00
6 Generators 100 KVA (2) , 30KVA 10,000,000.00
10 Accommodation Operation yearly 4,000,000.00
11 Miscellaneous
134,739,500.00 22,450,000.00
Total Costs A+B 157,189,500.00

© 2016 ARATIBIOTECH Limited 32


CHAPT
TER FOU
UR - MARK
KET ASSE
ESSMENT

4.0 Market Anallysis

Nigeriaa has greatt potentialss for fertiilizer consuumption annd use. A study connducted by y the
Agriculltural Projeccts Monitorring and Evaaluation Unnit (APMEU U) in 1990 put
p the agro onomic poteential
at 7 miillion metriic tons. Wiith increaseed release of
o higher yielding andd fertilizer consuming
c crop
varietiees, this poteential is noow much higher than the 7 milliion metricss tons. It iss now geneerally
estimateed to be arround 12 million
m metrric tons perr annum. Despite
D this high potenntial, supplyy and
consummption, whicch peaked aat average oof 1 million n metric tons per annuum from 19984 – 1996 6, has
now droopped signiificantly to an average of 500,0000 metric tonns per annum m since thee deregulatioon of
the induustry in 19997.

The tw wo fertilizerr manufactuuring comppanies - the Federal Super phossphate Ferttilizer Com mpany
(FSFC)) set up in 1976 and thhe Nationall Fertilizer Company of o Nigeria (NAFCON)
( ) set up in 1988
have both been grounded
g b poor puublic sectorr managem
by ment. They have been out of seerious
producttion for neaarly 10 yearrs now. Thee two plans have an innstalled capaacity of oveer million metric
m
tons per annum. All A attemptss to turn theem around have failedd. This madde the Fedeeral governm ment,
under itts privatizattion policy to
t sell them
m out to privvate entrepreeneurs. It is expected that they will
w be
back onn stream as private entterprises in the very neear future. A number of o blendingg plants emeerged
after thhe establishmment of NA AFCON, thhat providedd cheap ureea, the mainn input for blending. From F
1986 too date more than 25 such plants w were establisshed. Most of them weere establishhed by the State
Governnments (abouut 20) whilee the private sector hollds the remaaining (abou ut 5). Theyy together haad an
installedd capacity of
o about 1.88 million meetric tons peer annum. With
W the cloosure of NA AFCON, mo ost of
these pllants especiially those oowned by State Govern nments weree forced to shut down as a they cou uld no
longer source
s cheaap urea for bblending.

© 2016 AR
RATIBIOTECH
H Limited 33
The few that are operating are mostly those owned by the private sector and 2 or 3 State Government
owned, which are operating at less than 30% capacity. In addition there are 4 or 5 plants producing
crushed rock phosphate, agricultural lime, granulated limestone and kaolin for blending, and one for
micro nutrient fertilizer production. These are also producing very limited quantities. Due to the lack
of local production most of the fertilizer used in Nigeria now is imported. The consequences of
relying on imported fertilizer include drain on foreign reserve, insufficient supply due to high capital
requirements for importation and consequent high retail prices for the farmers, which renders the
input unaffordable.

These developments and actions which to a large extent were uncoordinated have caused the
quantities of fertilizers available to farmers to remain abysmally low and very
expensive. Government blames private sector for failure to capitalize on its liberalization
policy. Local manufacture of fertilizers in Nigeria is almost zero in the last 10 years. All fertilizers
consumed in the country are imported. Combined with inconsistent government policies, supplies in
the last ten years have been erratic and insufficient with consequent high retail prices, which make the
commodity highly inaccessible and unaffordable Despite this deplorable situation, there is still hope
for the revitalization of local manufacture of fertilizers in Nigeria. The factors that favour this
aspiration include-
a) Large demand potential –Agronomic-12 million metric tons – Economic at least 3.5 million
metric tons.
b) Large expense of arable land and varied ecologies that is conducive for the cultivation of
variety of crops.
a) Government’s economic recovery policy of putting the private sector in the driver’s seat for
under taking economic activities.
b) Withdrawal of Federal Government from direct production and importation of fertilizers –
especially with the privatization of its two main production plants.
c) The existence of democratic governance and freer market economy.
d) The efforts being made by State governments to commercialize/privatize their fertilizer
blending plants.
e) The coming together of the fertilizer suppliers under one body to address the fertilizer
supply and distribution issues.
f) Availability of local raw materials – natural gas and phosphate rock.

In addition, substantial investment was made for fertilizer supply in Nigeria in the following areas:
Manufacturing – NAFCON now NOTORE Chemical Industries Limited with a combined installed
capacity of 1 million metric tons for Urea, Ammonia and NPK and Federal Super phosphate Fertilizer
Company (FSFC) with installed capacity for 100,000mt of single super phosphate are the 2 major
manufacturing companies in Nigeria. In addition there are 4 companies that produce small quantities
of crushed rock phosphate (Crystallizer), agricultural lime (Quest Two), granulated limestone (West
African Fertilizer Company) and micro nutrient fertilizers (Cybernetics).

Blending – There are about 25 bulk blending plants in the country, most of them are owned by State
Governments. About 5 of them are owned by private entrepreneurs. They have all together an
installed capacity of about 1.8 million metric tons.

© 2016 ARATIBIOTECH Limited 34


It must be noted however
h thaat most of thhe fertilizerrs being prooduced locallly are inorganic fertiliizers,
and quiite unfortunately it has been discovvered that continuous
c u of thesee fertilizers have deleteerious
use
consequuences for the
t soil and plant yield in the long run as highhlighted beloow:

1. As innorganic feertilizers aree both pow t quickly, they can burn


werful and taake effect too b and to
otally
destroy plants wheen applied exxcessively.
2. Exceessive use of inorganic fertilizers can
c also killl earthworm ms in the soil that
ms and micrroorganism
help in the plants' growth.
g
3. The nitrates conntained in ssome inorgaanic fertilizers can actuually pollutte groundwater that wee use
for drinnking.
4. Somee inorganic fertilizers may
m containn wastes thaat went throough a recyccling processs. As such,, they
may haave in them lead or othher heavy-m
metal residuues which canc be takenn in by growing plantss and
which, in turn, we eventually consume ass food.
5. Appllied excessiively or tooo liberally, inorganic fertilizers
f caan be washhed and trannsported by y rain
into waater sources (such as rivvers and lakkes) and endd up pollutiing them. Iff this happeens, it may result
r
to an inncrease in growth
g of several aquaatic plants which
w can then
t substanntially lesseen the supp
ply of
oxygen in water annd kill fish. This, conseequently, inccreases polllution.
The futuure of farming and ferttilizer application is orgganic bioferrtilizer. Bioologically acctive produccts or
microbiial inoculannts of bacteeria, algae and fungi either sepaarately or inn combination, which may
enhancee the availaability of nutrients
n foor the benefit of plantts are calleed biofertiliizers. They also
include organic feertilizers likke manuress which aree convertedd to a readdily availabble form du ue to
interacttion of micrroorganismss or their asssociation with plants.

Biofertiilizer is a suubstance whhich containns living miicroorganism ms which, when


w applieed to seed, plant
surfacess, or soil, colonizes the
t rhizosphhere or thee interior of o the plantt and prom
motes growtth by
increasiing the suppply or availaability of prrimary nutriients to the host
h plant.

4.1 Maarketing Strategy


The maain strategy to be adoptted by Aratibiotech is to o leverage on
o the fact that
t we are thet only loccal
manufaacturer of high grade orrganic biofeertilizer in Nigeria.
N Givven the trendd towards orrganic farm
ming
and the use of orgaanic farmingg input, andd the competitive pricinng strategy that
t the com mpany has
adoptedd that makess its product less expennsive in termms of unit price comparred to the heavily
subsidizzed inorgannic fertilizerr. The markeet penetratioon is sure.

Figure 9. Our optiimization prrotocol

© 2016 AR
RATIBIOTECH
H Limited 35
Also the endorsement that has been given to the Aratibiotech’s Biofertilizer by the Federal Ministry
of Agric. and Rural Development, and various Agriculture Research Institutes stand the fertilizer in
good stead in the market. We are also working hard in our research laboratory to maximize the shelf
life of the product and package 5kg bags to meet the needs of small and marginal farmers and also in
bulk package to meet the need of large commercial holding farmers. Distributors are to be sourced
from every state of the federation and as the company’s capacity increases, large storage facilities are
to be located in each of the six geopolitical zones of the country.

Marketing activity centres around consumers' satisfaction through management of the marketing mix:
Product, Prices, Promotion & product placement - the 4Ps of Marketing management. Marketing
management should constantly evaluate the changing marketing. Environment to make adjustment
needed to reach the goal. Identification and removal of the barriers to facilitate consumption are the
key functions of marketing management. This is a valid proposition in the fertilizer marketing
system. Our innovative strategies will benefit the consumers and the firm segmentation is considered
an effective marketing management strategy. Products, prices, distribution and promotions can be
segmented for increased impact. For instance the planters, farmers with large holdings respond
differently to different marketing mix as compared to small, marginal farmers and those farmers
cultivating irrigated areas.

The field survey has revealed that the needs, capabilities attitudes with regard to fertilizer use from
small, medium, large farmers and planters are different. Further the requirements of farmers with
irrigated facilities and those that are cultivating dry land vary too much. The type of products
required, the prices that they can afford, the communication needs, technology transfer from these
target groups are different. There is adequate demand from these segments to develop systems
tailored to the specific needs. Our survey has also revealed that the facilities meant for small and
marginal farmers and those cultivating dry lands are being largely availed by other segments of
farmers due to in adequate monitoring. Bulk movement, using paper bags, introducing 25 kg, 5 kg
bags for the specific needs of farmers help stimulating consumption from the sector.

Farmers Service Centres


Established farmers service centres where all essential inputs like fertilizers, seeds, agro-chemicals,
and technical guidance are provided under one roof. Agricultural implements like seed-cum-fertilizer
drills, sprayers, dusters, etc. are also provided to farmers on custom hiring basis and see Plate 1 and 2
below (Aratibiotech farmer field school Minna, Niger state below.

Village Adoption
Plan to adopt over 100 villages all over the country for their integrated socio-economic development.
Along with propagating improved agricultural technology, efforts are made for uplift of the village
community through promotion of family welfare, child care, adult education, conservation of energy,
social-forestry, medical check-up, veterinary check- up, etc.
Special Projects
In keeping with the nation's priorities, will promote dry land farming, production of oil-seeds and
pulses, increasing rice productivity in potential blocks and developing tribal and backward areas.
Farmers Integration Scheme
To fulfil its objectives of serving the farming community, a scheme for farmers integration under
which small groups of farmers from one part of the country are taken to another part. The object is to
expose them to modern agricultural practices and also assist them in familiarizing themselves with
cultural heritage, social customs and life styles of different regions of the country and thus achieve
the objective of national integration.
© 2016 ARATIBIOTECH Limited 36
4.2 Saales Plan
Farmerrs Commun nity Centrees
We willl establisheed Commuunity Centrees in triball and backw ward areas to serve as a a nucleuus for
supplyinng farm inpputs to a clluster of villlages, to disseminate latest agriccultural tech
hnology, serrving
the heallth services need of thee area and providing
p edducational and
a recreatioonal facilitiees.

Figure 10. The leaarning cyclee of farmer field schoool

Plates 1.. Model of Farmers Fieldd School in M


Minna, 2011 for 100 farm
mers by Aratiibiotech Lim
mited

Plates 2.
2 Model of Farmers
F Fieldd School in M
Minna, 2011 for 100 farm
mers by Arattibiotech Lim
mited.

© 2016 AR
RATIBIOTECH
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Table 7 .Lists of Aratibiotech brand off-takers
N/S Up‐taker Company States  Coverage  Qty 50Kg  Sales (N) 50Kg  Payment Term
1 ZSPC Osun and western Nigeria 1,800 12,600,000.00 Cash & Carry
2 Laoange Ventures Limited Oyo and western Nigeria 3,600 25,200,000.00 Cash & Carry
3 Dosa Radoka (Nig.) Enterprise  Ogun 3,600 25,200,000.00 Cash & Carry
4 Aladewura Enterprise Lagos and western Nigeria 1,800 12,600,000.00 Cash & Carry
5 Optasia Nigeria Limited Ogun and western Nigeria 3,600 25,200,000.00 Cash & Carry
6 AL HAWASH Royal Company Limited Taraba State 6,000 42,000,000.00 Cash & Carry
7 BESTCO Nigeria Limited Northern Nigeria 5,000 35,000,000.00 Cash & Carry
8 Total (N) 25,400 177,800,000.00

Table 8. .Lists of Aratibiotech brand off-takers and contact

N/S Distributors Nationwide States


1 BESTCO Nigeria Limited Northern Nigeria
Alhaji Isa Badamasi
08087339607
2 Laoange Ventures Limited Oyo State
Trinity Shopping Plaza, Beside Fatai Filling Contact: Funso Amoo
Station, Eleyele, Ibadan 0803 9669882 , 0805
9853 395

3 OPTASIA Nigeria Limited Ogun & Western


Nigeria
08034351132
4 FARM FIRST Consult Limited Kogi State
10, road 22 Avenue, Gwarimpa Contact:
Abuja. Samuel Olayiwola
0809 2681774
5 ZSPC Company Limited Osun State
Agro Allied division Contact:
18 Moore Road, Ile Ife, Osun State Tope Elusogbon
0803 3039194

N.B: Please, see Appendix 4 for the expression of interest letter.

© 2016 ARATIBIOTECH Limited 38


PART THREE TECHNICA
AL
T THREE TECHNIC
PART CAL 39

CHA
APTER FIV
VE - AGR
RICULTUR
RE IN-PUT
TS TECHN
NOLOGIES
S 39

5.0 Products 40

5.1 Processingg Technologgy 41

5.2 Manufactuuring Plants Developmeent 43

5.3 Aratibiotecch Fertilizerr Brand 46

5.4 Aratibiotecch Biopesticcides 46

5.5 Critical Risk


R Factorss 56

Aratibbiotech Limiited Exhibitioon Stand

National Organic
O Agriculture Businness Summitt, Dec., 6-7, 2016, Abujaa

© 2016 AR
RATIBIOTECH
H Limited 39
5.0 Prroducts
Plus® Organ
OBD-P nic Biofertiilizer Techn
nology

OBD-P Plus® Technnology was invented bby Professo or B. A. Oso of the Department
D t of Botany y and
Microbiology, form merly of Unniversity off Ibadan, Ibadan, Nigerria. It acts rapidly
r on refuse
r [garb
bage]
breakinng it down intoi nutriennt rich orgaanic fertilizeer within foour (4) weeeks as comppared to upp to 6
months in the absence of thee material. A biodegraader OBD-P Plus® is mixed with thhe slashed dried
refuse which
w is thhen loaded into a diggester. The microbial formulationn composedd of a pow wdery
substannce speciallyy producedd from Plannt extracts and heavilyy impregnaated with sppecial strainns of
micro-oorganisms capable
c of rapidly brreaking dow wn organicc matter. Itt breaks do own refuse into
nutrientt-rich-organnic fertilizerr within as sshort a periood as four (44) weeks. OBD-Biofer
O rtilizer (Gateeway
Biofertiilizer ) is a registered
r f
fertilizer traade mark off Aratibiotecch Limited with
w CAC , Abuja.

Plate 3. Fertilizer Brand


B Producce using OBD
D-Plus biodeegrader Bioteechnology OBD-Bioferti
O ilizer (25kg))

Plate 4. ARATI OM
MF ( Organoo-Mineral Ferrtilizer) (25kkg)

N.B: ARATI OMF F is a blend of Gatewayy Biofertilizzer + Urea ( or other inoorganic ferttilizer on
request by clients) for differennt soil cropss requiremennt based onn the agro-eccology in Nigeria.
N

© 2016 AR
RATIBIOTECH
H Limited 40
5.1 Prrocessing Technology

Source: Otaiku
O 2013, www.aratishe
w a.com

Plate 5. Slasher

Source: Otaiku
O 2013, www.aratishe
w a.com Milledd Machine, Veertical dimenssion

Plate 6.
6 Milled Machine
M
© 2016 AR
RATIBIOTECH
H Limited 41
Source: Otaiku 20133, www.aratisshea.com

Plate 7. Granulatoor / Grinderr

© 2016 AR
RATIBIOTECH
H Limited 42
Dryingg Machine
visit ww
ww.aratishea.com
Visit Global
G shea Alliance weebsite or Gooogle searcch the subjecct as refer.
www.gllobalshea.coom/.../Shea-zero-wastee-managemeent-Shea-nuut-drying-m machine

Source: Otaiku, 20133, www.aratishhea.com

Plate 8. Drying Machine


M M
Model KRG 12
Specificcation: Lenngth x breathh = 5 feet byy 5feet, Heighht = 3 feet. Blower
B = 3.5
5 horse Power.
Burner 1.2
1 horse Pow wer. Power: Diesel/Electtric.
Techniqque: Hot Air Circulatory
C System with control paneel.
S

5.2 Manufacturing Plants Developme


D nt
PRODU
UCTS
Biologiical pre-treeatments
The purrpose of this pre-treatmment is inocuulation of feedstock.
fe A the anaerrobic digestiion is a com
As mplex
biologiccal process and its peerformance is influencced by miccrobial diveersity. Therrefore, balaanced
active inoculum
i iss essential for
f the possible degraadation to beb carried out.
o In this view, it is very
importaant to find an approprriate inocullum contain ning the neecessary microbes for the degrad dation
processs to proceeed AD cann open up currently underutiliseed or wastted nutriennt resourcess for
agriculttural use, improve
i thhe usefulnesss of traditional alterrnative ferttilizers (maanures etc.)) and
minimisse their detrrimental sidde effects (oodour, GHG
G emissions,, handling isssues etc.).

© 2016 AR
RATIBIOTECH
H Limited 43
Anaeroobic digestiion
During the anaerobbic digestioon process ( Four weekks), organicc compound ds are brok
ken down, firstly
f
via accetogenic bacteria
b to methane prrecursors, largely
l volaatile fatty acids (VFA As) and theen to
methane and other products viia methanoggenic bacterria. Under anaerobic conditions,
c o
organic form
ms of
nitrogenn (N) are converted
c innto ammoniium-N (NH H-N), i.e. reeadily availaable nitrogeen. The reeadily
availablle nitrogen (RAN) conntent of cattlle slurry is typically 500% and pig slurry c. 600% of total--N. It
might be
b anticipateed that a measurable inncrease in thet proportion of readily availablee N would occur
o
in thesee materials, as a resultt of the digeestion proceess (See Figgure 3 and 4 ). In adddition to nuttrient
impactss, a numberr of benefits are claim med to accruue as a resuult of AD, including
i a reduced risk of
odour nuisance
n andd a reductioon in viable pathogenic organisms..

Figure 11. Schem Gateway) prroduction frrom bio-waaste feedstock.


matic of bioofertiliser (G

Figure 12. Anaerob


bic digestion is a multi-sttage process

Post Trreatment
The diggestate afteer being wiithdrawn frrom the anaaerobic diggester was temporarily
t y stored in high
density polyethyleene for curring. Aerobbic post-treeatment of the anaeroobically diggested wastte or
digestatte bring abbout changees in pH, solids conteent and C/N N ratio and aeration was carried d out
intermitttently for 5 hour on a daily basiss for the treaatment. Appplication off digestate to
t soil may have
some positive
p effeects for soil and plantt growth beecause it coontains connsiderable quantity
q of plant
nutrientts and orgaanic matter that can suupport soil and plant health.
h Digeestate appliication has been
found to
t improve physical chharacteristiccs of soil liike soil struucture, infilltration, andd water holding
capacityy; chemicall characterisstics like inncreased pH
H in acidic soils,
s availability of nuutrients like N, P
and K and
a biologiccal characteristics of sooil.

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RATIBIOTECH
H Limited 44
Bioferttilizer Prodduction Maachines in tthe factory currently
 Dryer
The dryyer installedd for this purpose is opeen air dryer. The dryer is used twicce in production, both at
the wet phase of thhe productioon and after the digestioon period.
 Digesters
The diggesters are cubical
c P ®
conncrete designns for bioddegradation with the aid of microbbes (OBD Plus
technology material). The diigested orgaanic materiials releases methane gas (hollow w bored on n the
digesterrs to enablee the passagge of methanne gas) andd reduces thhe organic products
p to a digestiblee size
throughh biodegradaation and Peerkins 27 K KVA generaator.
 Slasher
This maachine cuts the materiaals into smalller pieces to
t enable it mix thorougghly in the mixer.
m The
slasher is designedd to run mecchanically annd poweredd by electriccity.
 Mixer
This machine
m mixxes the material(s) pouured into it. In this respect the organic
o wasste materialls are
w the OBD Plus® technology
mixed with t material. The
T machinne is referreed to as sig gma mixer. It is
powered by electricity
 Granulator / Grinderr
This maachine pulverizes the biodegraded
b d organic maaterial into ggranules. Thhis machinee is designed as
hammerr mill and powered
p by electricity.
 Shake
This is a machine designed
d forr sieving graanules of thhe organic material
m intoo desired sizzes. This
machine has a lot of
o perforated small holees at the feeeder stock too enhance thhe shaking processes.

 Sealer
The haand sealing machine is used to seal the organiic fertilizer bags
b after bagging
b the product wh
hich
marks the end of production
p p
processes, bbefore it is transferred
t t the store.
to

Qualityy Control
Environmental Managemen
M nt

Plate 9 . New design to


t capture bioggas produced Plate 10. Oldd design do noot capture biogas
produced.

© 2016 AR
RATIBIOTECH
H Limited 45
5.3 Aratibiotech Fertilizer Brand

Fertilizer Brand using OBD-Plus Biodegrader Biotechnology

Table 9. The Physio-Chemical Properties for Aratibiotech Fertilizer Brand

Parameters Fertilizer ARATIBIOTECH Fertilizer Brand


Standard * ARATI OMF SB SOMF OBD *
Minimum content of N 1-4 % 4.45 1.29 4.06 0.95
Minimum content of P 11.5 - 3% 2.47 1.37 1.97 3.10
Minimum content of K 1 – 1.5% 0.25 0.28 0.31 0.35
Moisture content not exceed 15 - 25%
Carbon Nitrogen ratio (C/N) 10:1 15 :1 10.84 37.84 12.99 37.56
pH 6.5 7.5 8.80 7.20 8.60 5.80
Odour Free (odourless) Free Free Free Free
Non biodegradable Materials i.e. Free
glass metal, plastics, stones, slogs, etc Free Free Free Free
Colour Variable Dark-Brown Dark-Brown Dark-Brown Dark-Brown
Texture Variable Powdery Powdery Powdery Powdery
Pathogens Free Free Free Free Free

Source: Federal Ministry of Agriculture and Rural development, Nigeria.

NB: Aratibiotech Limited fertilizer brand

ARATI OMF – Organo-Mineral Fertilizer


OBD - Bio-fertilizer.

5.4 Aratibiotech Biopesticides®


… microbial & phytoscience

 Introduction
What is a Biopesticide?
Biopesticides, a contraction of 'biological pesticides', include several types of pest management
intervention: through predatory, parasitic, or chemical relationships. The term has been associated
historically with biological control - and by implication - the manipulation of living organisms.
Biopesticide Controls of Plant Diseases
The need to feed an ever-growing global population combined with increasing demand for
sustainable agricultural practices has fuelled a significant rise in demand for biopesticides.
Biopesticides offer unique benefits all along the food value chain, providing additional options for
growers, buyers, dealers, consultants and retailers. While biopesticides have been around for more
than 50 years, the market has experienced its most significant period of growth in terms of both sales
and user acceptance over the past five years. The use of biopesticides has become a common practice
in many horticultural crop protection programs. Biopesticides are effective tools in integrated pest
management (IPM) programs for helping to manage resistance to synthetic chemical pesticides and
reduce worker and environmental exposure to synthetic pesticides. Multiple studies have documented
the development of resistance by pathogen and pest populations to chemical pesticides. Conversely,
the risks of developing resistance to biopesticides are extremely low - even as biopesticide use
continues to increase.

© 2016 ARATIBIOTECH Limited 46


Biopesticides Offer Significant Benefits to Growers
Managing pests in ways that leave little or no toxic residues, have minimal impact on non-target
organisms, and are not prone to pest resistance has always been a challenge in modern agricultural
systems. Additionally, enhancing product quality, residue management, labour and harvest flexibility
and worker and environmental safety are all challenges growers face. Consumers are becoming more
aware of environmental concerns and are asking for chemical-free crops. Nearly all biopesticides are
most effectively used as preventive treatments. Since they deploy multiple Modes of Action (MOAs)
to suppress pests and pathogens, development of resistance to these multiple factors by target
organisms is extremely unlikely. Combinations of two or more of the characteristics described below
prevent the development of resistance to biopesticides.

Methodology
Aratibiotech biopesticides’s approach places principal emphasis on primary research techniques to
ensure that the foundation of business intelligence and insight is accurate, current, and reliable.
Building on our decades in the science, innovation and leveraging our national research institutes
network cum international scientists . Our teams of seasoned professionals draw upon pragmatic
industrial and commercial experience to understand and interpret global impacts and local
perspectives to agriculture and speciality pesticides.
Aratibiotech Biopesticides Technologies
 Microbial species, such as fungi, viruses, or bacteria, acting as pesticides
Production of antibiotics and other growth inhibitors- (Bacillus spp., Pseudomona
spp., Trichoderma spp., Gliocladium spp., Streptomyces spp., etc)
Parasitism/Predation – Coniothyrium minitans (Parasite of Sclerotinia spp.) Trichoderma spp.
( Parasite of numerous soil borne fungal pathogens) – Bacteriophages ( Viruses that infect and
lyse bacteria) – Paecilomyces spp. (nematophagous and entomophagous species) etcs
 Natural materials with pesticide properties, such as diatomaceous earth, kaolin etcs.
 Plant extracts, such as seaweed, neem, pyrethrum, oils and others as appropriate
 Biological seed treatment, including a cross-section of technologies used as protectants and
stimulants.

Modes of Action (MOA) Aratibiotech Biopesticides®


i. Competitive exclusion: Many microbial biopesticides not only grow very effectively in the
environments from which they were originally isolated, they can also physically occupy these
niches to prevent establishment of pests and pathogens in these spaces. If these
microorganisms grow well on plant leaves or in close association with plant roots, they can
also provide host plants with a protective barrier against pathogens and certain pests.
ii. Production of secondary metabolites: Since bacterial and fungal biopesticide strains are
isolated from very competitive environments, each produces numerous secondary metabolites
for protection, survival and competition for nutrients.
iii. Predation and parasitism: Some biopesticide agents physically attack and completely
consume specific pathogens and pests. Other biopesticide agents actually act as parasites that
feed on detrimental organisms, leading to weakening and eventual death.
iv. Induced host resistance and enhancement of plant vigour: Certain microorganisms used
as biopesticides can stimulate subtle biochemical responses in host plants that enhance their
abilities to resist or better tolerate pest attack and diseases. In addition, certain microbial
biopesticides can also promote plant growth or enhance plant vigor by production of particular
secondary metabolites and increasing availability of plant nutrients.
© 2016 ARATIBIOTECH Limited 47
v. Alteration of the soil or plant host environment: Biopesticides made from soft chemicals
or biological extracts chemically or physically change conditions in the soil or on plant
surfaces to be unfavorable to the establishment and growth of pests and pathogens.
vi. Disruption of fundamental biological functions, development, and structures of target
organisms: Biorational chemicals and biological extracts can directly inhibit biochemical
processes, interfere with developmental pathways of pathogens, and compromise the physical
integrity of pests and pathogens. Because of the nature and diversity of the MOAs presented
above, plant pathogens and pests would need to undergo immense physical, biochemical,
physiological, and genetic changes to develop resistance to biopesticides. Therefore, the loss
of effective biopesticides due to development of resistant pests and plant pathogens is highly
unlikely.

Key for success


1) Not curative!
Need to be used in a preventive manner.
2) Integration!
a) There are no silver bullets.
b) Biopesticides need to be integrated with other pest management strategies.
3) Pathogen identification!
4) Proper diagnosis is key to controlling any disease.

Advantages - No harmful residues produced, i.e. biodegradable. Can be cheaper than chemical
pesticides when locally produced. Can be more effective than synthetic pesticides in the long-term (as
demonstrated, for example, by the Sesame Crop cultivation programme, see below).
Disadvantages. High specificity: which may require an exact identification of the pest/pathogen and
the use of multiple products to be used; although this can also be an advantage in that the biopesticide
is less likely to harm species other than the target. Often slow speed of action (thus making them
unsuitable if a pest outbreak is an immediate threat to a crop).
Plants are not defenseless. The difference between resistance and susceptibility is due to the
timing of pathogen recognition and the expression of defences.

 Aratibiotech Biopesticides ® Formulations


Biopesticide products fall into two major categories: microbial and biochemical. Within each of
these, there are various types of products, each with its own mode of action.
MICROBIAL - In this category, the active ingredient is a microorganism that either occurs naturally
or is genetically engineered. The pesticidal action may be from the organism itself or from a
substance it produces. The following microorganisms are used in microbial biopesticides:
 Bacteria- Biopesticides based on bacteria have been used to control plant diseases, nematodes,
insects and weeds. They control pests in a number of ways: by producing toxins outcompeting
the damaging pathogen, producing anti-fungal compounds and by promoting root and top
growth. Bacillus thuringiensis (Bt), which targets larvae and Pseudomonas syringae, which
controls bacterial spot are examples of microbial.

© 2016 ARATIBIOTECH Limited 48


 Fungi - Funngal biopestticides are rrelatively neew. They may
m be used to target neematodes, mites,m
insects, weeeds or otheer fungi. L Like bacteria, they mayy act by out-competi
o ing the targ
geted
pathogen or o producingg toxins. Thhey may alsso attack and parasitizee plant pathoogens or inssects.
Trichoderm ma harzianu um is a funggi that is also a fungicidde, targeting
g Pythium, Rhizoctonia
R a and
Fusarium.
 Nematodess - Nematoddes are coloourless rounndworms. Many M are paarasitic to plants
p and cause
c
serious dam mage to croops. Howevver, some arre actually beneficial, attacking innsect pests.. The
two main nematodees used for f biopessticidal purposes aree Steinernema spp. and
Heterorhab bditis spp.
 Protozoa- Protozoa
P arre single-cellled organissms that livve in both water
w and soil.
s While most
protozoa feeed on bacteria and deecaying orgaanic matter, many species are inssect parasitees. In
particular, one speciess of protozooa, Nosemaa locustae, is used to control grasshopper, lo ocust
and crickets on rangelaand.
 Viruses - Microbial
M biiopesticidess known as baculovirusses are a faamily of natturally occu urring
viruses kno own to infect only inseects and som me related arthropods.. Most are so host-speecific
that they innfect only one
o or a few w species off Lepidopteera larvae, which
w makees them ideaal for
managemennt of crop pests p with minimal haarm to beneeficial. Thee granulosiss virus of CydiaC
p
pomonella , the codlinng moth, annd the nucllear polyheddrosis viruss of Heliothhis/ Helicovverpa
spp., the co
orn earworm m, are two exxamples.
 Yeast - Soome yeast sppecies that naturally occur in plannts have been developed into prod ducts
that help tot control postharvestt decay and d/or stimullate the plaant’s immuune system.. For
example, Candida
C oleephila Straiin O, first isolated
i from Golden Delicious apples,a has been
developed into
i an effective biopessticide for the control ofo post-harvvest fruit rotts.

Application
n rate: ratio 1:4 Litres AR
RATI Biopessticide® is a broad based
d spectrum

BIOCH HEMICALS - Biochhemical pessticides aree naturallyy occurringg or syntheetically derived


compouunds that are
a structuraally similarr (and funcctionally iddentical) to their naturral counterpparts.
Unlike conventionnal chemiccals, whichh usually directly
d atttack and kill
k the peest, biochem mical
biopestiicides are characterizeed by a noon-toxic modem of acttion that may
m affect the t growth h and
developpment of a pest,
p its abiility to reprroduce, or pest
p ecologyy. Biochem micals mightt also be used to
effect thhe growth and
a developpment of treeated plantss and their fruit, includding duringg the posthaarvest
period. Biochemicaals fall into the categorries below:

© 2016 AR
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Sourcee: Buchanan, Gruissem annd Jones, 20000 (eds.)

Figurre 13. Biocchemistry & Molecularr Biology off Plants


 Plant Growth Regulators
R - Plant grrowth regullators (PGR Rs) are com mpounds thhat effect major
m
physioologic functiions of plannts, such as growth ratee, seed germ mination, boolting, fruit set
s and ripening,
branchhing and manym otherss. They maay be naturrally-occurrring or syn nthetically manufacture
m ed to
mimic the functio on of the natural
n subsstance. Man ny are plannt hormonees, but theree are also other
compoounds that have an im mpact on plant growthh, includingg a varietyy of seconddary metaboolites
producced by plantts and somee plant-assocciated microobes. As thee benefits of o PGRs havve become better
b
undersstood by gro owers, their use has inccreased. Theey provide valuev throug gh their abillity to maxiimize
producctivity and quality, im mprove conssistency in production and to oveercome gennetic and ab biotic
limitattions to plannt productivvity. There are
a five majjor classes of o natural plant
p hormoones. Under each
class there
t are a number off PGR prodducts that play p specifiic roles in optimizing crop yield d and
qualityy. Gibberellins, Cytokinnins, Abscissic acid, Ethhylene and Auxins .
There are
a a varietyy of concretee examples of how PG GR’s meet thhe needs off growers in the fresh
producee market. Th hese include:
i. .Improved fruitf qualityty: Gibberelllins reduce russet on ap pples, improve firmnesss in cherriees
and rind quuality in citrrus. Abscisicc acid enhannces the redd colour on red grapes and ethylen ne
aids in ripening of fruiit crops.
ii. Improved yield:
y Gibbeerellins incrrease the fruuit size of chherries, tablle grapes, piineapple and
bananas.
iii. Gibberellinns also imprrove fruit seet on citrus anda many other crops and a the leaff size and yield
are increaseed on spinacch and otheer leafy vegeetables. Cyttokinins alsoo increase the t berry sizze of
table grapes and ethyleene modulattion increasses fruit set on walnuts.

© 2016 AR
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iv. Overcomin ng genetic liimitations: Gibberellicc acid improoves seed germination
g of dwarf ricce
varieties annd increasess berry size on seedlesss table grappes. Both giibberellins and
a cytokinnins
can also inccrease fruit size in smaall apple varrieties.

Applicaation rate: raatio 1:4 Litrres ARATII PGR®

v. Reduce labbor costs: C Cytokinins annd auxins innduce thinnning of flow wers and fruiits. Ethylenee
modulationn allows groowers to mannage the tim ming of fruit maturity, and
a therefore, the harvvest.
Gibberellinns also allow w growers too delay the harvest on citrus
c and cherries.
c
vi. Extend posst-harvest lif ife: Ethylenne managemment and ethhylene recepptor blockag ge can enhan nce
the shelf liife of fruit. G
Gibberellins extend thhe green lifee of bananass and lemonns during
shipping annd storage.
 Insect Growth Regulators
R -Most cheemical inseecticides woork by killling insectss outright, often
targetinng the nerv vous system m. Often, beeneficial inssects are kiilled as welll. Insect grrowth regullators
(IGRs)) use a diffeerent and morem selectivve mode of action; theyy disrupt thee growth prrocess of inssects,
prevennting them from the reeaching repproductive stage. s The direct
d impaact of IGRss on target pests
combinned with thhe preservaation of benneficial inseects and poollinators aiids growerss in maxim mizing
yield and
a productt quality. IGRs can be divided into i two brroad categories: those that disrup pt the
hormonal regulattion of inseect metamoorphosis annd those thhat disrupt the syntheesis of chittin, a
principple component of insecct exoskeletoons.

Agriculltural appliccations curreently focus on the first category off compoundds, also known as
“hormoone mimics.” The most widely useed IGR is azzadirachtin, which structurally mim mics the nattural
insect molting
m horm mone ecdyssone. Immatture insects exposed to azadirachtiin may moltt prematureely or
die befoore they commplete a prooperly timedd molt. Inseects that surrvive exposuure are likelly to develo
op
into a deformed
d addult incapable of feedinng or reprodducing. Sincce beneficiall insects do not feed onn the
treated foliage, bioopesticide innsect growthh regulatorss are considered “soft” on beneficiial insects suuch
as honeeybees, ladyybugs, greenn lacewings and parasittic wasps.

Organiic Acids - Peracids


P are highly effeective sanitizzing agents used for coontrolling allgae and
pathogeens. Peracidds can be used for sanittation of greeenhouse suurfaces, shocck applicatiions for tank
ks
and piping, continuuous applicaation at a loow concentrration and as a bacterial or fungiciddal applicattion
to plantt foliage or roots.
r A furrther advanttage is that when
w peracids degradee, the byprodduct is oxyg
gen,
which is safe and beneficial.
b

Plant Extracts
E - Inn order to pprotect them
mselves from ungal predattors, plants have
m insect, annimal and fu
devisedd numerous biochemicaal defencess. Some disccourage feeeding by insects and herbivores,
h some
s
have annti-bacteriall or anti-fuungal activiity that pro
ovides protection or even
e immunnity from some
pathogeens, and othhers have a detrimentaal effect on nearby plannts in orderr to reduce competitio on for
resources. By studying the diverse cheemistries of o many different plannt species, scientists have
discoveered many useful
u comppounds that can be used as biopessticides. Theese are calleed plant exttracts
and proovide pest coontrol in a variety
v of w
ways:

© 2016 AR
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H Limited 51
Biopesticidee®
Applicaation rate: raatio 1:4 Litrres OTAI B

i. Insect grow wth regulatoors - Prevennt insects frrom reaching the reprod ductive stagge.
ii. Feeding deeterrents - are
a compounnds that, onnce ingestedd by the inseect pest, cauuse it to stopp
feeding. Crrop damage is inhibitedd and the inssect eventuaally starves to death.
iii. Repellents - are typicaally compouunds that rellease odour’s that are unappealing
u g to insects..
Examples include
i garllic or pepperr based inseecticides.
iv. Confusantss - imitate food
f sourcess and are ussed as traps or decoys to lure inseccts away froom
crops. Theyy can also bbe formulateed as concenntrated spraays designedd to overwh helm insectss
with so manny sources of stimuli thhat they can nnot locate tthe crop.
v. A
Allelopathy y - Some pllants naturaally producee biochemiccals to preveent competittion from
neighbourinng plants. Juuglone, the allelochem mical producced by blackk walnut trees (Juglanss
nigra), is to
oxic to many other plannts. Many reecently disccovered alleelochemicals have potential
for developpment as nattural producct herbicidees.
vi. Plant Grow wth Regulattion - Somee plant extraacts can act as effectivee contact herbicides thrrough
a variety off mechanism ms such as ddisrupting cell
c membraanes in plantt tissue, inh hibiting aminno
acid syntheesis or enzym me productiion.
vii. Mechanicaal Control - Some plantt extracts arre powerful natural ageents that actt directly on n
weeds.
D-limonenee, for exampple, is a deggreasing ageent that stripps the waxyy cuticle from weed leaaves,
causing neccrosis, dehyydration andd weed deathh.
viii. Fungicidall Control - B By disruptinng cell mem mbrane integgrity, deactiivating key enzymes an nd
interfering with metabolic processses, plant exxtracts can aact as contaact fungicidees.
ix. Induced Reesistance - Crops
C treateed with som
me plant extrracts producce and accuumulate elev vated
levels of sppecialized prroteins and other comppounds that inhibit the developmen
d nt of fungall and
bacterial diiseases. In effect,
e the crrop’s immune system is triggered to defend against
a
destructive diseases.

Pherom mones - Inssects releasee chemical signals, called pherom mones, to communicatte with otheers in
their sppecies for a variety of reasons.
r Theese might innclude findiing a mate, warning othhers of poteential
danger or
indicatiing the locaation of a foood source. By using syynthetic phheromones that
t mimic the
t action of o the
pests’ natural
n chemmical, growers can disrrupt mating cycles or lure
l pests aw
way from crops. Each year,
more thhan one milllion acres w worldwide aare treated with
w pherom mones to conntrol insect damage thrrough
mating disruption. Pheromonees are also uused in trapps, allowingg growers too predict innsect populaations
me applicatio
and tim on of controols.

 Minerals - Minerals pplay a key roole in a wide range of biopesticide


b e applicationns that can be
b
divided intoo three categories:
i. Barriers - act
a to keep pests
p away from plant tissues and//or impact pathogen
p waater supply.. An
example is kaolin clayy, which actss as a repelllent that coaats the plantt surface, making
m it
unsuitable for
f insect feeeding or eggg laying.

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ii. Smothering g and/or abbrasion - onne example is diatomacceous earth,, which con ntains fossiliized
microscopic plants, givving the com mpound a shharp surface that cuts through
t inseects’
exoskeletonns, a processs that leads to desiccattion of the innsect. Mineeral oils are often used to
smother inssects in the nesting or ccrawler phases.
iii. Carrier forr other bioppesticides - m
minerals aree also used as inert carrriers for commpanion
biopesticidees. In these applicationns, minerals are includeed in formullations to deeliver or
enhance peest control agents, but thhe mineral itself
i is connsidered inerrt. Talc, kaoolin,
montmorilllonite and atttapulgite arre just a few
w.

 Case Sttudy Bligh


ht of sesamee (Alternariia sesami)
Triaal Field - (FU
UNAAB) Auugust 2016 - todate,
Croop - Sesamum m indicum (seesame)
Bioppesticide –AARATI Biopeecticides
Leaad Investigattor: Prof. Viictor Olowe
Fedeeral Universiity of Agricuulture, Abeokkuta (FUNAA
AB)
Deppartment of Plant
P Physiology and Croop Protection
n
Mobbile: +234 80 03 3928 111
Emaail: olowevio o@funaab.eddu.ng

Sesamuum indicum L

Plate 11. Sesame grrown with A


ARATI Biopeesticide, FUN
NNAB, Abeookuta, Oct., 2016
2 and pictures by Prof.
Victor Olow
we.

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Figure 14. Blight of sesame patthology world distributionn map

Blight of
o sesame (A
(Alternaria sesami)
s

Plate 12. Blight of sesame


s crop .The causal organism. Alternaria
A sessame. Sympttoms - The pathogen
p attaacks
all parts of the plant at all stages - Small, darkk brown watter soaked,

List of symptoms//signs
Fruit - lesions: blaack or brow
wn
Fruit - lesions: onn pods
Leaves - abnormaal leaf fall
Leaves - necrotic areas
Stems - discoloraation of barkk

Symptooms
Brown to black, roound to irreggular and offten zonate lesions
l meaasuring up too 1 cm diam m. are produ uced
on the leaves
l and in severe atttacks the leaaves dry outt and fall offf . Stem lessions are eitther in the form
fo
of dark brown spotts or streakss. Dark browwn, circularr lesions aree produced on o the capsuules which h can
cause thhe capsule to
t drop. Thee most visibble symptom ms are the leeaf spots wh hich are darkk, irregular
patchess mostly on the edges annd tips of thhe leaves, but the stem rots can bee more signiificant note that
can cauuse seed rot,, pre- and poost-emergennce losses as
a well as stem rot and leaf spots.

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Impactt:
Althouggh considered an imporrtant fungall disease of sesame, theere is little information
i n about actuaal
econommic impact of o A. sesamii. Kumar annd Mishra (1992) state that most of o the commmon diseasess of
sesame cause yieldd losses of 20-40%.
2 Thiis yield losss is caused byb the prem
mature defoliation of thee
plants leeading to sm
maller capsuules and losss of capsulees due to innfection.

Preven
ntion and coontrol –App e®
plication off ARATI Biopesticide
B

A
Application
n rate: ratio 1:4 Litres A opesticide®
ARATI Bio

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5.5 Critical Risk Factors
Table 10. Projected Elements of a Potential strategy for Business Development

  Product sensitization
   Results 
‐ Communities are aware of 
(External) Inputs 
Biofertilizer potential 
 
‐ Improved processing 
 Capacity Building on  
technology  techniques are known and 
Develop Nigeria Agro‐Corridor 
improvement;   applied 
& Agro Parks 
quality standards  ‐ Improved soil health & quality  
(biofertilizer);  ‐ Groups are 
maintenance of  evolving/dynamism 
equipment;  Quality improvement training  ‐ Networks are developing 
bookkeeping/  ‐ Groups become business 
documentation;  partners  
group  organization    ‐ Investors are partners. 
 Basic infrastructure 
 Basic/ advanced  Organizational Development
equipment 
 ETC  Result 
‐ Better quality 
and larger 
Introduction/ upgrading of 
Access to finance 
quantities are 
equipment and infrastructure  available 
Biofertilizer

Result 
Aratibiotech Agric Farm In-Puts ‐ Supply 
Factory in Six Geo-political
Aratibiotech 
Zone in Nigeria via
Franchise Management Limited 
Agriculture Farm 
In‐Puts domestic 
and international 
markets 

From the strategies developed above, the following training programmes would be rolled out at
different stages:
i. Organic farming sensitization nationwide
ii. Agro-ecology corridor farming
iii. Quality training and Business Farmers School.

© 2016 ARATIBIOTECH Limited 56


PART FOUR - ORGANIZATIONAL STRUCTURE

CHAPTER SIX : BUILDING RESILIENCE

PART FOUR - ORGANIZATIONAL STRUCTURE 57

CHAPTER SIX : BUILDING RESILIENCE

6.0 Development Plan 58

6.1 Universities /Institutions Research Link 58

6.2 Staffing Requirements 58

6.3 Financial Planning & Capital Structure 61

© 2016 ARATIBIOTECH Limited 57


6.0 Development Plan

Table 11 . Project Schedule for for Aratibiotech Limited Biofertilizer Plant Development

Activities Months (2017) 1 2 3 4 5 6 7 8 9 10 11 12

Milestones duration 12 weeks


Franchise final investment decision and signing MoU
Digesters construction. site clearing and
Fabrication work
Civil work ,Mechanical, Installation/Test Run
Fabrication test running begins
Training off-takers in Farmer filed school
Work begin on the biopesticide Plant & Business Plan
Hand over to investor and Training of Staff

TV/Print/Radio/Viral/Mobile Marketing
First Production of bags of Biofertilizer

Milestones:

a. Machine Fabrication and testing ten (10) weeks


b. Factory Equipment installation and product test – run (ten (10) weeks)
c. With warehouse as Factory Plant in-place. Product commission twelve (12) from the day
of Project award and Memorandum of Understanding (MoU).
6.1 Universities /Institutions Research Link

i. Federal University of Agriculture, Abeokuta, Ogun state, Nigeria.


ii. University of Ibadan, Nigeria.
iii. Federal Ministry of Agriculture National Root Crops Research Institute (NRCI) Umudike.
iv. National Cereals Research Institutes (NCRI), Badeggi-Niger state
v. Institute of Agriculture Research and Training (IAR&T), Ibadan, Federal Ministry of
Agriculture.

6.2 Staffing Requirements


Operation Processes
1. Having gotten the materials to the factory through any or all the three means discussed above,
they are likely to come wet or dryers As the case may be. If they come wet, the first
production stage is to ensure that they are dried through the open air drier.
2. Depending on the size of the materials they may be required to run through a slasher to cut
them into smaller pieces and hence; if the size are considerable small after drying, they are
transferred to the mixer where OBD-Plus® technology material will be applied and ensure
thorough mixing to enable good and adequate biodegradation of the waste materials.
3. Having mixed the product thoroughly in a mixer they are transferred to the digesters for
biodegradation. The product remains in the digester for the minimum period of three weeks
and maximum of six weeks. This is to enable the organic wastes to biodegrade with the aid of
© 2016 ARATIBIOTECH Limited 58
4. the OBD-P Plus® a mateerial (microobes).The biodegradati
b ion processes reduces size and lo oss of
weight of the
t organic wastes maaterial. Afteer digestion period (bio odegradatioon) there is high
tendency for
fo the prodduct to becoome wet aggain and thherefore reqquire a re-d drying. Then n the
products arre off loadedd form the digester
d to the
t open airr dryer for the
t second drying.
d Morre so,
after the seecond drying, the produucts are trannsferred to the slasherr and allow it to stay a beat
long in the slasher to enable
e it slash well.
5. The next sttage which is pulverizaation requirres grindingg the product to powdeery substance or
to a very sm
mall grain size.
s This prrocess leadss to sifting through
t the use of an electric
e shakker to
sieve the prroduct.
6. Bagging iss the last manufacturring processs after shaaker processs because the produ uct is
collected frrom the shakker to the bagging unitt, where theyy are baggeed and sealeed.
Labourr
The labbor requirem
ments for thee biofertilizer plant are specified based
b on theeir functionss and
perform
mances.
i. Manager: th his is requirred to manaage all the acctivities of the
t factory both the staaff and the
machinery. One personn is requiredd for this poost.
ii. Machine opperator: Tw wo personnell’s are requiired to operrate and run
n the machinnes.
iii. Casuals’ labbor: two casual laborerrs are requirred for proccessing and transfer maaterials /
products inn productionn.
iv. Security: tw
wo security personnel aare requiredd to man andd secure thee factory botth day and
night.
Generallly, the total number off employeess required fo
or the mini--organic ferrtilizer plantt is seven (7
7)
people minimally
m w
while the maximum
m is 12 workerss as the casee may be.
Facilitiies

The maajor challengges are the power


p infraastructure att the site off the Plant (A
Abeokuta) and
a the badd road
networkk. We operate using alternative
a ppower (geneerator) whicch is very expensive
e a increasee our
and
operatioonal costs. We
W need a tthree phase transformeer at the sitee of the Plannt for operattional efficiiency
and immprove retuurn on inveestment. W We also reqquest for partnership
p with the federal
f ferttilizer
departm
ment, Abujaa in the salees and recoommendatioon to state aand federal governmen nt for patroonage
and pubblic private partnershipp (PPP) in thhe establishhment of ferrtilizer Plantts nationwidde with ourr firm
(Aratibiiotech Limiited).

Plates. 13
1 Ayodele Otaiku
O (Arattibiotech Lim
mited ) at the factory withh a client, Ab
beokuta Plan
nt
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Human Resource
Table 12 . Showing Aratibiotech Limited human resource

Name Mobile Phone Experiences


Qualifications
Prof. B.A. Oso PhD (London) Patent owner for OBD-Plus® Technology
(Environment Biotechnology). 38 years of
Formerly Teaching and Microbiology and
Botany Research, University of Ibadan,
Nigeria
Prof. Victor Olowe 08033928111 Plant Nutrition Specialist
Department of Plant physiology & Protection
Federal University of Agriculture, Abeokuta
Prof. G.O . Adeoye 08023422759 Organic agriculture specialist
Department of Agriculture
University of Ibadan
Prof. Samuel Arokuyo 08033412733 Climatic and Regional Planning
Department of Geography & Environmental
Management, University of Port Harcourt
Prof. F. E. Babatunde 08022627686 Department of Agronomy
08179403419 College of Agriculture
Osun State University
Dr. A.A.Soretire Soil microbiologist
Dr. (Mrs). A. A. Oketola Ph.D (Ibadan) Environmental/Analytical Chemist
+234 08024995515
Dr. (Mrs) .O. A. Fashae Ph.D (Ibadan) Geographic Information Systems.
Biogeomorphology.
Dr. Olumide Onafeso Ph.D Climatology Climatology/Meteorology and Air Quality
Studies; Climate Change/Physical Processes
Modelling
Adewale J. Adeyemi Msc. (UST,PH) HSE Manager:
+234 0803 720 3989 Environmental, Quality,
Health & Safety Specialist

Engr. O.F. Adekanye COREN 12,589 Design & Structural Engineer


Engr. A.H. Raji COREN 15,981 Design & Structural Engineer
Engr. Wale Rasaq HND, London City & guide Electrical & Mechanical Engineer
Engr. Uche Odozor BSc. AG-Air Tractor Specialist
08162007622 South Africa
Ayodele A. Otaiku Msc, Ph.D (in-view, Uniport) Land Degradation/Restoration Ecologist.
Managing Director Biogeoscientist.
Aratibiotech Limited +234 0803 3721 219 Soil nutrient fertility and management
0807 8603 471 Eco-innovation specialist

© 2016 ARATIBIOTECH Limited 60


6.3 Financial Planning & Capital Structure
Equity Financing
Equity investment is generally required for funding the start-up plant assets and the company’s initial
operating expenses, as there is no track record of transactions resulting in cash flows, which the
business uses in support of debt and interest payments. Presently, the stock market has been
functioning well in Nigeria, channelling substantial amounts of capital to the corporate sector. Short-
term debt is used to finance current assets that can be quickly turned back into cash; examples of this
type of debt are accounts receivable and inventories. Non-current liabilities in the form of long-term
debt, or loans, are used to finance long- term assets, such as the purchase of land and the construction
of a building.
Equity financing refers to the issuing of shares to investors in order to support a company’s business
operations. This mode of financing is especially important during a company’s start-up stage. In
this method of financing, investors make gains when there is an increase in the share price, as well as
through the distribution of dividends by the company in which the investor has purchased a stake.
Advantages of Equity Financing
The first advantage of equity financing is that it offers another source of funding besides arranging for
loans from banks or other financial companies. A company may use funds from business investors
when it begins its business operations to cover the start-up costs. The company can then use the cash
flow from its operations to directly grow the company or to diversify into other areas. Related to this is
the fact that investors tend to take a long-term view, and typically don’t expect an immediate return on
their investment. This allows the company to keep more cash on hand to expand the business, rather
than having to pay a portion of its profits to repay loans. For this reason, this method of financing is
less risky than debt financing because the company doesn’t have to pay back its shareholders. This fact
also makes equity financing a good option when a company cannot afford to take on (more) debt. A
second, related advantage to equity financing is that equity financing helps to confer legitimacy, by
enabling companies to tap into investor networks and thereby to enhance their credibility. The third
advantage of equity financing is that if companies have prepared prospectuses for corporate investors
and explained to them that their money is at risk in the companies’ brand new start-up business, then
investors will understand that if the business fails, they will not get their investment back.
Finally, equity financing offers additional advantages in terms of management of the company. Some
prospective investors may be able to offer valuable business assistance that a company may not be
able to provide for itself. Investors provide invaluable assistance in the form of management expertise,
business contacts and access to other sources of capital. Quite a number of good investors and venture
capitals (VC) assume the role of business advisors or even come on board fully as part of the
management team. This can be important, especially in the start-up period of a new business.
Disadvantages of Equity Financing
The most important disadvantage is that investors must be granted some ownership of the company
and a certain percentage of the profits. If the company’s business takes off, then the company will
have to share a portion of its earnings with the equity investors. Over time, the distribution of profits to
shareholders may exceed the sum that a company would have had to pay for loans.
Venture Capitals often request an equity stake especially when companies are just start-up companies
without a strong financial background. The potential for equity financing may be limited for this
reason, as company directors are sometimes unwilling to dilute their controlling power through equity
financing.

© 2016 ARATIBIOTECH Limited 61


Capital structure
The capital structure of a company is such a vital factor that it enhances its operations. As a result, the
relevance of capital to the company’s operations and performance, many studies have previously been
undertaken to determine and possibly develop theories that will enhance the capital mix (i.e. the
adequate capital structure) suitable for corporate organizations to apply in order to maximize
shareholder value (Czarnitzki and Kraft, 2004, Hovakimian and Tehranian, 2002; Chiarella, et al,
1991; Schiantarelli and Sembenelli, 1997 and Efobi, 2008).
The capital of a company, according to Akinsulire (2002), is “a stock of money, possessed by a person
or a business firm, that could be invested, from time to time, in order to earn income, but for which it
is intended not to diminish.” Uremadu (2004) sees the capital of an organization as “those pool of
funds that the company commits to its fixed assets, to inventories, to account receivables, and to cash
or marketable securities” to lead to corporate growth. An economist views capital as any material or
item which can be consumed in the production process to create wealth. These materials or items are
said to be factors of production which are usually grouped into man, machine and money (including
information as the fourth category) ( Efobi, 2008).
In particular, and in consideration of our country’s peculiarities, can the capital structure behaviour of
the Nigerian manufacturing sector be adequately understood and possibly restructured or manipulated
towards achieving expected domestic growth? Finally, how do these firms (fertilizer sector
agribusinesses) finance their operations as depending solely on equity financing might not be to their
best interest following the most recent global financial or credit crunch as well as the bearish
dispositions of the global stock (capital) markets in the times? Understanding these mind bugging
issues and the underlying principles as well as concepts behind them would, no doubt, aid the
companies in question diversify their sources of capital base into other profitable sources rather than to
dogmatically sticking to a trend that has been used over and over again. Capital structure, in other
words, refers to the various financing options of the asset by a firm. A business concern can go for
different levels of the mixture of equity, debt and other financial facilities with equity having the
emphasis on maximizing the firm’s market value. Capital structure affects the liquidity and
profitability of a firm (Rahemen, Zulfiquar and Mustafa, 2007).
The Equity Management Process
Because of their unique structure, cooperatives face unique challenges in managing their equity
structure. Unlike investor owned firms, the majority of cooperative equity comes from retained profits.
Cooperative equity is also unique because it generally is not bought or sold, but rather it is redeemed at
face value by the association. Because of this structure, a cooperative board must manage the
cooperative’s equity structure through decisions to return profits to members in the form of equity
(creating additional equity) and decisions to redeem outstanding equity. An effective equity
management process should involve the following steps:
1. Determine income generation.
2. Determine the proportion of income that will be retained as unallocated equity or distributed in the
form of stock or equity credits.
3. Determine additional assets required.
4. Determine desired financial structure by computing the following:
a. Debt/equity b. Working Capital (current assets – current liabilities)
5. Determine equity redemption budget.
6. Determine equity redemption program.

© 2016 ARATIBIOTECH Limited 62


The critical point of this process is that the board of directors should actively manage their equity
structure rather than let equity be the residual effect of decisions on asset purchases or a predetermined
redemption process.
The Importance of Strategic Financial Planning
Strategic financial planning plays a key role in the effective equity management of a cooperative.
There are two main goals of financial planning; identifying sources of capital and identifying uses of
capital. This inflow and outflow of capital must be analyzed in order to determine the strategy for
managing cooperative equity. Deciding the desired debt/equity ratio and the desired amount of
working capital is an important step in determining the financial structure the cooperative will have.
Responsibilities of the Management Team
The management team carries out the equity retention and redemption decisions the board sets. The
manager’s ability to generate profits has an obvious impact on future equity management options. The
management team also has important perspectives concerning the need to replace assets and the ability
to service additional debt. The cooperative board and management team should work together to
analyse the interrelated decisions involved in equity management.

© 2016 ARATIBIOTECH Limited 63


PART FIVE - FINANCIAL PROJECTION
PART FIVE - FINANCIAL 64

7.1 Income Statement Projections 65

7.2 Cash Flow Projections 67

7.3 Statement of Financial Position 69

7.4 Break -even Analysis 72

7.5 Profitability Indicators 73

7.5.1 Net Present Value (NPV) 73

7.5.2 Payback Period (PBP) 74

7.5.3 Returns on Capital Invested 75

7.5.4 Net Profit Margins 76

7.5.5 Gross Profit Margins 77

7.6 Investment Repayment Schedule 78

8.0 Conclusions 79

© 2016 ARATIBIOTECH Limited 64


PART FIVE - FINANCIAL
7.1 Income Statement Projections
Table 13. Income Statement Projections
FIVE ( 5 YEARS PROFIT OR LOSS PROJECTION)   
YEAR 1 ( =N= ) YEAR 2 ( =N= ) YEAR 3 (=N=) YEAR 4 ( =N= ) YEAR 5 ( =N= ) NOTES
SALES 420,000,000 504,000,000 604,800,000 725,760,000 870,912,000 see sales schedule 1
COST OF SALES 221,400,000 265,680,000 318,816,000 382,579,200 459,095,040 see sales schedule 2
GROSS PROFIT 198,600,000 238,320,000 285,984,000 343,180,800 411,816,960
LESS OPERATING EXPENSES
ADMINISTRATIVE EXPENSES 3,972,000 4,766,400 5,719,680 6,863,616 8,236,339 2% of Gross Profit
MARKETING EXPENSES 4,200,000 5,040,000 6,048,000 7,257,600 8,709,120 1% of Gross Sales
INSURANCE EXPENSES 67,369,750 67,369,750 67,369,750 67,369,750 67,369,750 5% of the cost of the Asset
UTILITIES 19,860,000 23,832,000 28,598,400 34,318,080 41,181,696 10% of Gross Profit
EXPORT MARKETS - DUTIES & ETCS 4,200,000 5,040,000 6,048,000 7,257,600 8,709,120 1% of Gross Sales
DEPRECIATION 26,947,900 26,947,900 26,947,900 26,947,900 26,947,900 See Asset Schedules
PERSONNEL COST 3,972,000 4,766,400 5,719,680 6,863,616 8,236,339 2% of Gross Profit
REPAIR AND MAINTENANCE 3,972,000 4,766,400 5,719,680 6,863,616 8,236,339 2% of Gross Profit
CONSULTANCY + LEGAL +AUDIT 2,979,000 3,574,800 4,289,760 5,147,712 6,177,254 1.5% of Gross profit
CONTINGENCIES / LOGISTICS 1,986,000 2,383,200 2,859,840 3,431,808 4,118,170 1% of Gross Profit
MISCELLANEOUS EXPENSES 5,958,000 7,149,600 8,579,520 10,295,424 12,354,509 3% of Gross Profit
EXPENSES B/4 INTEREST & TAX 145,416,650 155,636,450 167,900,210 182,616,722 200,276,536
PROFIT/LOSS BEFORE INTEREST & TAX 53,183,350 82,683,550 118,083,790 160,564,078 211,540,424
RETURN ON INVESTMENT (ROI)
PROFIT/LOSS BEFORE TAX 53,183,350 82,683,550 118,083,790 160,564,078 211,540,424
TAX @ 32% 17,018,672 26,458,736 37,786,813 51,380,505 67,692,936
PROFIT AFTER TAX 36,164,678 56,224,814 80,296,977 109,183,573 143,847,488
RETAINED PROFIT 36,164,678 56,224,814 80,296,977 109,183,573 143,847,488
PROFIT B/D - 36,164,678 92,389,492 172,686,469 281,870,042
RETAINED PROFIT C/F 36,164,678 92,389,492 172,686,469 281,870,042 425,717,530

Assumption:
1. Factory production calendar yearly =230 days
2. Factory Production 250 MT monthly (5000 units)
3.With 20% increase yearly (from year 2) in Production which translate to 20 % increase in
production costs
4.Gateway biofertilizer capacity utilization yearly = 250 tons ( 12 x 250 ) = 3,000 tons
5.From year 2, monthly production increase by 50 tons = 300 tons monthly ( 3,600 tons yearly)
6.From year 3, monthly production increase by 50 tons = 350 tons monthly ( 4,200 tons yearly)
7.From year 4, monthly production increase by 50 tons = 400 tons monthly ( 4,800 tons yearly)
8.From year 5, monthly production increase by 50 tons = 450 tons monthly ( 5400 tons yearly)
9.Sales is N35,000,000.00 monthly (5000 units x N7000)
10.Each 50 kg of Gateway Biofertilizer is N7,000.00
11.Monthly Production Costs N18,400,000.00
12. Utilities = Power (generator) is ten (10) percent of gross profit.
13. NOTES = the assumption variables used in the income statement.

© 2016 ARATIBIOTECH Limited 65


Income Statement ‐ 250 Tons Biofertilizer monthly (5000 Units, 50kg)  Plant 
 1,000,000,000
 900,000,000
 800,000,000
 700,000,000
Naira(N) 

 600,000,000
 500,000,000
 400,000,000
 300,000,000
 200,000,000
 100,000,000
 ‐
YEAR 1  ( YEAR 2 ( YEAR 4 ( =N= YEAR 5 ( =N=
YEAR 3 (=N=)
=N= ) =N= ) ) )
SALES 420,000,000 504,000,000 604,800,000 725,760,000 870,912,000
COST OF SALES 221,400,000 265,680,000 318,816,000 382,579,200 459,095,040
GROSS PROFIT 198,600,000 238,320,000 285,984,000 343,180,800 411,816,960

Figure 14 .Gross Profit Sales of Gateway Biofertilizer

Income Projection  5 years Biofertilizer Plant by Aratibiotech Ltd   
450,000,000
400,000,000
350,000,000
300,000,000
Naira(N) 

250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
PROFIT/L PROFIT RETAINED
TAX @ RETAINED  PROFIT
OSS AFTER PROFIT
32% PROFIT B/D
BEFORE TAX C/F
TAX
YEAR 1  ( =N= ) 53,183,350 17,018,672 36,164,678 36,164,678 0 36,164,678
YEAR 2 (  =N= ) 82,683,550 26,458,736 56,224,814 56,224,814 36,164,678 92,389,492
YEAR 3 (=N=) 118,083,790 37,786,813 80,296,977 80,296,977 92,389,492 172,686,469
YEAR 4 ( =N= ) 160,564,078 51,380,505 109,183,573 109,183,573 172,686,469 281,870,042
YEAR 5 ( =N= ) 211,540,424 67,692,936 143,847,488 143,847,488 281,870,042 425,717,530

Figure 16. Income statement Projected for five (5) years.

© 2016 ARATIBIOTECH Limited 66


7.2 Cash Flow Projections
Table 14 . Cash Flow Projections
PROJECTED CASHFLOW PROJECTION (5 YEARS)
Cash Receipt/ Inflow YEARS =N= YEARS 1 =N= YEARS 2 =N= YEARS 3 =N= YEARS 4 =N= YEARS 5 =N=
INVESTOR FUND (N) 157,189,500 - - - - -
Sales Proceeds 420,000,000 504,000,000 604,800,000 725,760,000 870,912,000
TOTAL CASH RECEIPT 157,189,500 420,000,000 504,000,000 604,800,000 725,760,000 870,912,000
EQUIPMENTS 134,739,500
COST OF SALES 221,400,000 265,680,000 318,816,000 382,579,200 459,095,040
ADMINISTRATIVE EXPENSES 3,972,000 4,766,400 5,719,680 6,863,616 8,236,339
MARKETING EXPENSES 4,200,000 5,040,000 6,048,000 7,257,600 8,709,120
INSURANCE EXPENSES 67,369,750 67,369,750 67,369,750 67,369,750 67,369,750
UTILITIES 19,860,000 23,832,000 28,598,400 34,318,080 41,181,696
EXPORT MARKETS - DUTIES & OTHER CONSIDERATIONS 4,200,000 5,040,000 6,048,000 7,257,600 8,709,120
PERSONNEL COST 3,972,000 4,766,400 5,719,680 6,863,616 8,236,339
REPAIR AND MAINTENANCE 3,972,000 4,766,400 5,719,680 6,863,616 8,236,339
CONSULTANCY + LEGAL +AUDIT 2,979,000 3,574,800 4,289,760 5,147,712 6,177,254
CONTINGENCIES / LOGISTICS 1,986,000 2,383,200 2,859,840 3,431,808 4,118,170
MISCELLANEOUS EXPENSES 5,958,000 7,149,600 8,579,520 10,295,424 12,354,509
PRINCIPAL REPAYMENT 52,396,500 52,396,500 52,396,500
INTEREST REPAYEMENT + MANAGEMENT FEE
TAXATION - 17,018,672 26,458,736 37,786,813 51,380,505
TOTAL CASH OUTFLOW 134,739,500 392,265,250 463,783,722 538,623,546 576,034,835 683,804,181
NET CASH FLOW 22,450,000 27,734,750 40,216,278 66,176,454 149,725,165 187,107,819
OPENING BALANCE B/D - 22,450,000 50,184,750 90,401,028 156,577,482 306,302,647
CLOSING BALANCE C/F 22,450,000 50,184,750 90,401,028 156,577,482 306,302,647 493,410,466

NOTE:
i. Our projection is based on inflows from sales of Fertilizer locally
ii. Inflows and outflows is in Naira
iii. Loan interest is 15% per Annum (If interest need to be calculated). Projected to be payable on
yearly basis.
iv. The capital invested will be recouped within 3 years and fifteen days.

Total Cash Receipt Project , 5 Years Biofertilizer Plant by Aratibiotech Ltd


 1,000,000,000
 900,000,000
 800,000,000
 700,000,000
Naira (N) 

 600,000,000
 500,000,000
 400,000,000
 300,000,000
 200,000,000
 100,000,000
 ‐
YEARS YEARS 1 YEARS 2 YEARS 3 YEARS 4 YEARS 5
=N= =N= =N= =N= =N= =N=
INVESTOR FUND (N) 157,189,50 ‐ ‐ ‐ ‐ ‐
Sales Proceeds 420,000,00 504,000,00 604,800,00 725,760,00 870,912,00
TOTAL CASH RECEIPT 157,189,50 420,000,00 504,000,00 604,800,00 725,760,00 870,912,00

Figure 17 Total Cash Receipted

© 2016 ARATIBIOTECH Limited 67


Cashflow Projection, 5 years Biofertilizer Plant by Aratibiotech Ltd
 800,000,000
 700,000,000
 600,000,000
Naira (N) 

 500,000,000
 400,000,000
 300,000,000
 200,000,000
 100,000,000
 ‐
1 2 3 4 5 6
TAXATION ‐ 17,018,672 26,458,736 37,786,813 51,380,505
TOTAL CASH OUTFLOW 134,739,50 392,265,25 463,783,72 538,623,54 576,034,83 683,804,18
NET CASH FLOW 22,450,000 27,734,750 40,216,278 66,176,454 149,725,16 187,107,81
OPENING BALANCE B/D ‐ 22,450,000 50,184,750 90,401,028 156,577,48 306,302,64
CLOSING BALANCE C/F 22,450,000 50,184,750 90,401,028 156,577,48 306,302,64 493,410,46

Figure 18 Cash flow projections for 5 years

© 2016 ARATIBIOTECH Limited 68


7.3 Statement of Financial Position
Table 15 Projected Statement of Financial Position for five (5) years

FIVE (5) PROJECTED STATEMENT OF FINANCIAL POSITION 
YEAR 1 =N= YEAR 2 =N= YEAR 3 =N= YEAR 4 =N= YEAR 5 =N=
NOTE
NON CURRENT ASSETS
PROPERTY, PLANT & EQUIPMENTS 1  107,791,600          80,843,700      53,895,800        26,947,900                     ‐
CUURENT ASSETS
CASH & BANK EQUIVALENT    50,184,750          90,401,028   156,577,482      306,302,647    493,410,466
TOTAL ASSETS 157,976,350 171,244,728 210,473,282 333,250,547 493,410,466
EQUITY & LIABILITIES
INVESTMENT (CAPITAL)  104,793,000          52,396,500
PROFIT / LOSS RESERVES    36,164,678          92,389,492   172,686,469      281,870,042    425,717,530
 CURRENT LIABILITIES
TAXATION    17,018,672          26,458,736      37,786,813        51,380,505      67,692,936
TOTAL EQUITY & LIABILITIES  157,976,350        171,244,728   210,473,282      333,250,547    493,410,466

Current Assets Biofertilizer Plant


600,000,000
500,000,000
400,000,000
Naira (N) 

300,000,000
200,000,000
100,000,000
0
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
=N= =N= =N= =N= =N=
CASH & BANK EQUIVALENT 50,184,750 90,401,028 156,577,482 306,302,647 493,410,466
TOTAL ASSETS 157,976,350 171,244,728 210,473,282 333,250,547 493,410,466

Figure 19 .Current Assets

© 2016 ARATIBIOTECH Limited 69


Equity & Liabilities Biofertilizer Plant
450,000,000
400,000,000
350,000,000
300,000,000
Naira (N) 

250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
0
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
=N= =N= =N= =N= =N=
INVESTMENT (CAPITAL) 104,793,000 52,396,500
PROFIT / LOSS RESERVES 36,164,678 92,389,492 172,686,469 281,870,042 425,717,530

Figure 20. Equity & Liabilities

Current Liabilities Biofertilizer Plant


600,000,000
500,000,000
400,000,000
Naira (N) 

300,000,000
200,000,000
100,000,000
0
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
=N= =N= =N= =N= =N=
TAXATION 17,018,672 26,458,736 37,786,813 51,380,505 67,692,936
TOTAL EQUITY & LIABILITIES 157,976,350 171,244,728 210,473,282 333,250,547 493,410,466

Figure 21. Current Liabilities

© 2016 ARATIBIOTECH Limited 70


Movement in Non-current Asset
Table 16 . Movement in Non-current Asset
NON CURRENT ASSETS YEAR 1 =N= YEAR 2 =N= YEAR 3 =N= YEAR 4 =N= YEAR 5 =N= NOTE 1
PROPERTY, PLANT & EQUIPMENTS
AS AT 1ST JANUARY - 134,739,500 134,739,500 134,739,500 134,739,500
ADDITIONAL 134,739,500 - - - -
DISPOSAL - - - - -
AS AT 31ST DECEMBER 134,739,500 134,739,500 134,739,500 134,739,500 134,739,500
DEPRECIATION
AS AT 1ST JANUARY - 26,947,900 53,895,800 80,843,700 107,791,600
CHARGE FOR THE YEAR 26,947,900 26,947,900 26,947,900 26,947,900 26,947,900
DISPOSAL
AS AT 31ST DECEMBER 26,947,900 53,895,800 80,843,700 107,791,600 134,739,500
NET BOOK VALUE 107,791,600 80,843,700 53,895,800 26,947,900 -

Movement of Non Current Asset

NET BOOK VALUE
AS AT 31ST DECEMBER
DISPOSAL
CHARGE FOR THE YEAR
AS AT 1ST JANUARY
DEPRECIATION
AS AT 31ST DECEMBER
DISPOSAL
ADDITIONAL
AS AT 1ST JANUARY
PROPERTY, PLANT & EQUIPMENTS

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
PROPER
AS AT AS AT AS AT AS AT
TY, CHARGE NET
1ST ADDITIO DISPOSA 31ST DEPRECI 1ST DISPOSA 31ST
PLANT & FOR THE BOOK
JANUAR NAL L DECEMB ATION JANUAR L DECEMB
EQUIPM YEAR VALUE
Y ER Y ER
ENTS
YEAR 1   =N= ‐ 134,739 ‐ 134,739 ‐ 26,947, 26,947, 107,791
YEAR 2   =N= 134,739 ‐ ‐ 134,739 26,947, 26,947, 53,895, 80,843,
YEAR 3   =N= 134,739 ‐ ‐ 134,739 53,895, 26,947, 80,843, 53,895,
YEAR 4   =N= 134,739 ‐ ‐ 134,739 80,843, 26,947, 107,791 26,947,
YEAR 5   =N= 134,739 ‐ ‐ 134,739 107,791 26,947, 134,739 ‐

Figure 22. Movement of Non- current asset

© 2016 ARATIBIOTECH Limited 71


7.4 Break -even and Ratio Analysis
Table 17 . Break -even and Ratio Analysis
RETURNS ON CAPITAL EMPLOYED

S/N ITEMS BASIS YEAR 1 =N= YEAR 2 =N= YEAR 3 =N= YEAR 4 =N= YEAR 5 =N=
1 A RETURN ON CAPITAL EMPLOYED (ROCE ) Profit Before Interest & Tax * 100 39 61 88 119 157
CE= Non Current Assets only (FIXED ASSETS)

Profit After Tax * 100


B RETURN ON CAPITAL EMPLOYED (ROCE ) Capital Employed 23 33 38 33 29

CE = Share Capital+Reserves+ Lonterm Loan+ Current Liabilities

Note A1 . It means we are looking at the overall profitabilities of the company on the tangible assets
acquired
B1 . It means we are looking at the overall profitabilities of the company on the Total equity
capital employed

(A) Return On Capital Employed (ROCE) : It is a profitability ratio that measures how efficiently a
company can generate profits from its capital employed (capital and debt) by comparing net operating
profit to capital employed. In other words, return on capital employed shows Investors how many
Naira (=N=) in profit each Naira of capital employed generates.
ROCE is a long - term profitability ratio because it shows how effectively assets are performing while
taking into consideration long - term financing. It measures the proportion of adjusted earnings to the
amount of capital and debt required for a business to function.
INTERPRETATION: Based on the above computation (A), ROCE will increase from 39% to 157%
Using the profit before Tax of the company on the tangible assets acquired

INTERPRETATION: Based on the above computation (B), ROCE will increase from 23% to 29%
Using the Profit after tax of the company on the Total equity + Liabilities as
(capital employed)

© 2016 ARATIBIOTECH Limited 72


7.5 Profitability Indicators
7.5.1 Net Present Value (NPV)
Net Present Value (NPV ) Is one of the modern/ Discounted cash flow techniques that use
Discounted cash flows to evaluate projects meaning that it considered time value of money for the
determination of viable projects.
i. Internal Rate of Return (IRR). Is another appraisal techniques. It is the rate that equates the PV
of all inflows with the PV of outflows.
ii. It is the rate that equates the NPV to Zero. It is also known as Hurdle rate, Target rate,
Marginal efficiency cost of capital, cut off rate and DCF Yield (Rate of Return).
Any rate above the IRR, the project will cease to be worthwhile.
iii. Modern/ Discounted cash flow techniques using NPV and IRR Techniques

Table 18. Net Present Value (NPV)


Net Present Value (NPV ) and Internal Rate of Return (IRR)
YEAR ITEMS CASHFLOW =NDISCOUNTED FACTOR 15 % =N= PRESENT VALUE =N= DISCOUNTED FACTOR 42% =N= PRESENT VALUE =N=
0 OUTLAY - 134,739,500 1.0000 - 134,739,500 1.0000 - 134,739,500
0 WORKING CAPITAL - 22,450,000 1.0000 - 22,450,000 1.0000 - 22,450,000
1 INFLOW 27,734,750 0.8696 24,118,139 0.7042 19,530,811
2 INFLOW 40,216,278 0.7561 30,407,528 0.4959 19,943,252
3 INFLOW 66,176,454 0.6575 43,511,019 0.3492 23,108,818
4 INFLOW 149,725,165 0.5712 85,523,014 0.2459 36,817,418
5 INFLOW 187,107,819 0.4972 93,030,007 0.1732 32,407,074
5 WORKING CAP. RECOUPE 22,450,000 0.4972 11,162,140 0.1732 3,888,340
NPV 130,562,347 - 21,493,787

Decision: NPV using this Modern/ Discounted cash flow techniques the NPV is POSTIVE meaning
the project is viable at 100% capacity therefore the management can go ahead to invest.
Net Present Value (NPV ) : Represent an unrealised capital gain that become realised when the
project is undertaken.
The cash inflows considered above are net of Interest payment Reason, if interest is being considered
in the investment, it will amount to double counting.
The essence of compounding & Discounting is to account for Time Value of Money.

IRR = (+Lower rate) + NPV (LR) (High Rate ‐ Lower Rate)


(+NPV)‐ (‐NPV)

15% 130,562,347 * (0. 42 ‐0.15)


152,056,133

0.15 0.86 0.27

15 0.23
IRR = 15.23

Decision: IRR .The result of the above calculation shows that the IRR is 15.23 %. The indication is
that borrowing at a rate higher than the IRR of 15.23% will make the project to be unviable except
where the rate to finance the project is lower, it will become viable.

© 2016 ARATIBIOTECH Limited 73


7.5.2 Payback Period (PBP)
Payback Period Technique (PBP): is used to determine how quickly a project repays its outlay.
Meaning the earlier the payback the better for the company in term of viability and profitability.
Table 19. Payback Period (PBP)

Payback Period  (PBP )
YEAR        CASHFLOW   =N= CASH IN FLOW  =N= CUMMULATIVE CASH IN FLOW  =N= BALANCE  =N=
0 ‐157,189,500 ‐157,189,500
1                    27,734,750                                                    27,734,750 ‐        129,454,750
2                    40,216,278                                                    67,951,028 ‐          89,238,472
3                    66,176,454                                                  134,127,482 ‐          23,062,018
4                  149,725,165
5                  187,107,819                                                                   ‐                          ‐
                                                 229,813,260

3  +  23,062,018/149,725,165

3.15years

Decision:
The project is viable because it takes the company 3 years and 15 days to recoup it investment as
against 5 years set up by the Management.

© 2016 ARATIBIOTECH Limited 74


7.5.3 Returns on Capital Invested
Table 20. Returns on Capital Invested
FACTORS BASIS YEAR 1   =N= YEAR 2   =N= YEAR 3   =N= YEAR 4   =N= YEAR 5   =N=
CAPITAL INVESTED (TAKEN AS BASE FIGURE)    157,189,500  157,189,500 157,189,500     157,189,500    157,189,500
PROFIT BEFORE TAX      53,183,350     82,683,550 118,083,790     160,564,078    211,540,424
PROFIT AFTER TAX      36,164,678     56,224,814   80,296,977     109,183,573    143,847,488
RETURN ON CAPITAL EMPLOYED                       39                     61                    88                      119                    157
RETURN ON CAPITAL EMPLOYED                       23                     33                    38                        33                       29
CUMMULATIVE CASH POSITION    104,006,150     74,505,950   39,105,710 ‐         3,374,578 ‐      54,350,924
SHAREHOLDERS FUNDS    193,354,178  213,414,314 237,486,477     266,373,073    301,036,988

Summary : Return on Capital Employed, Biofertilizer Plant by Aratibiotech Ltd


350000000
300000000
250000000
200000000
Naira(N) 

150000000
100000000
50000000
0
‐50000000
‐1E+08
CAPITAL RETURN RETURN
CUMMUL
INVESTED PROFIT PROFIT ON ON SHAREHO
ATIVE
(TAKEN BEFORE AFTER CAPITAL CAPITAL LDERS
CASH
AS BASE TAX TAX EMPLOYE EMPLOYE FUNDS
POSITION
FIGURE) D D
BASIS
YEAR 1   =N= 157,189,5 53,183,35 36,164,67 39 23 104,006,1 193,354,1
YEAR 2   =N= 157,189,5 82,683,55 56,224,81 61 33 74,505,95 213,414,3
YEAR 3   =N= 157,189,5 118,083,7 80,296,97 88 38 39,105,71 237,486,4
YEAR 4   =N= 157,189,5 160,564,0 109,183,5 119 33 ‐3,374,578 266,373,0
YEAR 5   =N= 157,189,5 211,540,4 143,847,4 157 29 ‐54,350,92 301,036,9

Figure 23. Return on Capital Employed

© 2016 ARATIBIOTECH Limited 75


7.5.4 Net Profit Margin

Table 21. Net Profit Margin


S/N FACTORS BASIS YEAR 1  =N= YEAR 2  =N= YEAR 3  =N= YEAR 4  =N= YEAR 5  =N=
NET PROFIT  NET PROFIT/SALES 
1 MARGIN *100                       9                   11                    13                       15                       17

Net Profit Margin, Biofertilizer Plant by Aratibiotech Ltd


 18
 16
 14
 12
Naira (N) 

 10
 8
 6
 4
 2
 ‐
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
=N= =N= =N= =N= =N=
1 NET PROFIT MARGIN
9 11 13 15 17
NET PROFIT/SALES *100

Figure 24. Net Profit Margins

Net Profit Margin (NPM): It is the percentage of revenue left after all expenses have been deducted
from sales. The measurement reveals the amount of profit that a business can extract from its total
sales.
INTERPRETATION:
1. There is extremely healthy net profit margin in the first year of 10%.
2. Although the net profit margin increase in increased on yearly basis.
3. A rise from 10% to 17% between year 1 to year 5 is an indication of good control of overheads.

© 2016 ARATIBIOTECH Limited 76


7.5.5 Gross Profit Margin
Table 22. Gross Profit Margins
S/N FACTORS BASIS YEAR 1  =N= YEAR 2  =N= YEAR 3  =N= YEAR 4  =N= YEAR 5  =N=
GROSS PROFIT  GROSS 
1 MARGIN PROFIT/SALES *100                     47                   47                    47                       47                       47

Gross Profit Margin, Biofertilizer Plant by Aratibiotech Ltd


 50
 45
 40
 35
Naira (N) 

 30
 25
 20
 15
 10
 5
 ‐
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
=N= =N= =N= =N= =N=
1 GROSS PROFIT MARGIN
GROSS PROFIT/SALES 47 47 47 47 47
*100

Figure 25 Gross Profit Margins


Gross Profit Margin (GPM): This is a financial metric used to assess a Company's financial health and
business model by revealing the proportion of money left over from revenue after accounting for the
cost of goods sold (COGS).
INTERPRETATION:
The gross profit margin appears to be consistent over time. the gross profit margin suggests that
company is financial healthy to absorb other expenses having taken care of its cost of goods sold.

© 2016 ARATIBIOTECH Limited 77


7.6 Investment Repayment Schedule
Table 23. Investment Repayment Schedule
INVESTMENT REPAYMENT SCHEDULE
YEARS DESCRIPTIONS PRINCIPAL AMOUNT (=N=) YEARLY REPAYMENT ( =N=) BALANCE OUTSTANDING ( =N=)
PRINCIPAL AMOUNT 157,189,500 157,189,500
1 INVESTMENT REPAYMENT 52,396,500 104,793,000
2 INVESTMENT REPAYMENT 52,396,500 52,396,500
3 INVESTMENT REPAYMENT 52,396,500 -
157,189,500 157,189,500

© 2016 ARATIBIOTECH Limited 78


8.0 Concllusions
ARATI A
Award

Plate 14. A
ARATI won the Shell Nigerian
N Coontent Deveelopment (NNCD) Exhibbition, Port Harcourt,
H
Rivers statee, Nigeria, 2013:
2 Ninetty-eight (988) companies was invitted for the 33rd Shell Niigerian
Content Deevelopment,, 8-9th Oct.., 2013 exhiibition. ARRATI won the t Best Exhhibitor at th he 3rd Shell
NCD evennt: Bioremeddiation, soill restorationn and growthh of exoticss crops in thhe tropics technologies

Clients Proofile
Environmenntal /Agricuulture Manaagement Proojects:
1. Hyddrocarbon Bioremediat
B tion of OML L 58, Obagii wastes Pitss (Total E&
&P) Port Harrcourt, 20077.
2. UND DP Organicc Fertilizer Production,
P , Kotopo, Abeokuta,
A 20
009.
3. UND DP Nylon Recycling
R Plant,
P Igandoo-Isheri, Allimosho LG
GA, Lagos, 22009.
4. NES SREA/Riveers State Bioofertilizer P
Plant (2012).
5. Ecoology/ Restooration Project (2012-22013)
Clients Proofile for Bioofertilizer
1. Shea Treee domesticaation Projecct in Univerrsity of Dev velopmental Studies, Taamale, Ghan na
2. Ope Farm ms, Ogun sttate , Next gen
g Farmerss Lagos statte, etcs.
3. Six Fedeeral Universsities wheree thirty (30)) papers has been published duringg the calibraation of our
biofertiliizer, ARATI Organo-M Mineral Fertitilizer and Biopesticide
B s.

Interested investors should write expression


e oof interest for
f the Aratiibiotech Lim
mited franch
hise and
select the ggeo-politicall zone addreessed to Araatibiotech Limited.
L
N.B:
There is on
nly one Araatibiotech Limited
L fraanchise perr geo-politiical zone inn Nigeria.

© 2016 ARATIB
BIOTECH Lim
mited 79
Bibliography
Akinsulire, O. (2002). Financial Management. Lagos: Ceemol Nigeria Limited.
Czarnitzk, D. and Kraft, K. (2004) .“Capital Control, Debt Financing and Innovative Activity.” Centre
for European Research.

Efobi, R.U. (2008). “The Impact of Capital Structure on Corporate Profitability in Nigeria.” An
Unpublished M.Sc. Dissertation Submitted Impartial Fulfillment For the Award of a M.Sc. Degree in
Accounting, Department of Accountancy, CBS, CU, Ota, Ogun State
Hovakimian, A.G., Hovakimian, G. and Tehranian, H. (2002). “Determinants of Target Capital
Structure: The Case of Combined Debt and Egypt Financing.” Seminar presentation at Baruch
College, New York.

Otaiku, A.A (2013). Shea Zero Waste Management: Sheanut drying machine
www.slideshare.net/watradehub/enviro-sustainability-aratishea-shea-zero-waste-mgt Apr 18, 2013 -
TECHNOLOGIES Client: Global Shea Alliance Conference, March 4-6, 2013 Abuja, Nigeria.
Otaiku, A.A (2013)..Shea zero waste management: Shea nut drying machine & biofertilizer
www.globalshea.com/.../Shea-zero-waste-management
Otaiku A.A (2016) .Shea Based Organic Fertiliser’s Impact on Crop Cultivation by Ayodele Otaiku
Global Shea Alliance Conference , Ghana, .Shea 2016 Enhancing Farm Value Accra, March 22, 2016
Raheman, A., Zulfiqar, B. and Mustafa, M. (2007). “Capital Structure and Profitability: Case of
Islamabad Stock Exchange”. International Review of Business Research Papers, Vol.3, No.5
(November2007) pp. 347-361.

ADERIBIGBE, S.G., SAKARIYAWO, O.S SORETIRE, A.A ., SOREMI, P.A.S AND OTAIKU, A.A
(2017). Response of hybrid maize (ZEA MAYS L.) to application rates and sources of organic fertilizer in the
humid rainforest. Journal of organic agriculture and environment vol.5, no 1, june

SORETIRE, A. A , SAKARIYAWO, O.S, SOREMI, P.A.S ., ADERIGBE,S.G., OLOWOKERE, F.A.1,


FAGBEMI, A.O., OTAIKU, A.A. AND DURE, M.O (2013). Nodulation and nitrogen fixation in soybean [
Glycine Max (l.) Merrill] as influenced by different sources and rates of commercially produced organic
fertilizers. Journal of Organic Agriculture and Environment Volume 1.,December,

SAKARIYAWO,O.S , SORETIRE, A.A, ADERIBIGBE,S.G, OTAIKU, A.A , OYEKANMI,A.A,


LAWAL,I.O , ADEBAYO,A.G , SHOKALU,A.O (2011). Agro-Ecological Sustainability Of Organic Manure
Application In Soybean Production In Alfisols Of Rain-Forest Transitory Zone Of Nigeria , Proceedings of the
7th National Conference on Organic Agriculture, 13-17th November, University of Agriculture, Makurdi,
Nigeria.

Otaiku A.A. and Mmom P.C (2017). Shea Cake Waste Conversion to Biopesticide: Environmental Protection
of Diseases and Pest of the Shea Tree. Global Shea Alliance (GSA) Conference, Shea 2017, Seed of Change,
Cotonou, Benin, March 13-14

Schiaantarell, F. and Sembenelli, A. (1997). “The Maturity Structure of Debt: Determinant and Effect
on Firm’s Performance: Evidence from the United Kingdom and Italy. Washington DC; the World
Bank Policy Research Department.

© 2016 ARATIBIOTECH Limited 80


Uremadu, S.O. (2004). Financial Management: Concepts, Analysis and Applications, Enugu:
Precision Publishers Limited.
http://www.globalshea.com/uploads/files/conference_presentations/enviro-
sustainability_aratishea_shea_zero_waste_mgt_43.pdf
https://www.scribd.com/presentation/19448974/OBD-Plus-Technology-201

https://www.battelle.org/docs/.../bioremediation-symposium-preliminary-program.pdf

http://aratibiotech.com/bio-agriculture/
http://aratibiotech.com/consulting/
http://aratibiotech.com/pc3r-technology/

Visit: YOU Tube: Waste –to-wealth Technology


https://www.youtube.com/watch?v=pG2ODAx3ICY
Gateway fertilizer Plant, Abeokuta, Nigeria
Visit . wwwgsa.com and search
Shea Based Organic Fertiliser’s Impact on Crop Cultivation by Ayodele Otaiku
Shea 2016 Enhancing Farm Value Accra, Ghana March 22, 2016

© 2016 ARATIBIOTECH Limited 81


APPEN
NDICES
Appendixx 1 - Certificcates & Perm
mit

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Registratio
on as Orga nic Manufa
facturer Certificate

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Appendix 2 - Field Appplication an
nd Evaluationn in differentt Agro-ecology, Nigeria

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Appendix 3 - Biofeertilizer dessigned and developed by Aratibiiotech Limiited
Abeokuta P
Plant, Nigeriia
Anaerobic Digesters For
F Biodeg gradable W Waste Mana agement
Project: Gaateway Orgganic Biofertilizer Plannt
Product Naame: Gatew way Organ nic fertilizerr (OBD-Bioofertilizer)
Duration: 2009 -20100
Location: A
Abeokuta , Ogun state,, Nigeria.
Lead Conssultant: Ayyodele A. Otaiku
O Moobile +234 80
03 3721 219 (Aratibiotecch Limited)
aootaiku@gmaiil.com , ayoodele.otaiku@
@aratibiotech
h.com
Technologyy: OBD-Pllus Technollogy (Enviroonmental/A
Agriculture Biotechnolo
B ogy) Patent.

P.C Mmom with sample of Biofertiilizer in the Dryer at thee demonstrattion Plant , Abeokuta.
Plate 1. Dr.P A

Plate 2. Dr. P
P.C .Mmom and Ayodeele Otaiku w
with OBD-B
Biofertilizer (25kg). Prodduce using
OBD-Plus bbiodegrader Biotechnolo
ogy

Plate
P 3. AR
RATI OMF Organo-Mine
O eral- Fertilizeer (25kg)

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NATIONAL
L ENVIRONM
MENTAL ST
TANDARD R ON AGENCY – Port Harrcourt, Nig
REGULATIO geria
Project: NE
ESREA Biofertilizer
B Plant
Product Naame: Riv-B Biofertilizerr Plant
Duration: 2012 -20133
Location: P
Port Harcouurt , Rivers State, Nigerria.
Lead Conssultant: Ayyodele A. Ottaiku Moobile +234 803 8 3721 219
aotaikku@gmail.co om , ayoddele.otaiku@@aratibiotecch.com
Technologyy: OBD-Pluus Technolo ogy (Enviroonmental/Ag
griculture Biotechnolog
B gy) Patent.
Supervisorr: Dr. P.C .MMmom

Dryer veertical view. pen Dryer sidde horizontaal view.


Op

Vissit internet: YOU


Y Tube: Waste
W –to-w
wealth Techno
ology
https://www.youutube.com/watch?v=pG22ODAx3ICY Y
Gaateway fertiliizer Plant, Ab
beokuta, Niggeria

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Appendix 4 - Lists of Off-takers
O an
nd Federal M
Ministry of Agriculture
A , Abuja Invvitations

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Appendix 55- Farmers Field Sch
hool (FFS) Programm
me
Farmer fielld research is an art as much as a science beccause it imp plies a proceess which iss creative annd
holistic as well as anaalytic and diagnostic.
d IIt requires a discoverin
ng attitude as well as the scientiffic
methods neecessary to obtain unaambiguous rresults. Theese two attrributes of ffarmer field d research are a
equally impportant. It has
h been arg gued that trraining farmmers on expperimental ttechniques enhance theeir
skills and inntuition neccessary to in
nteract withh a complex x environmeent; it causees farmers' own researrch
to resemblee formal reesearch and d see Figuree 1 below. Agriculturaal Produce Training: Farmers
F fieeld
schools.
i. Root and Tubers
ii. Grain leggumes
iii. Fruits, P
Pasture, Graasses and Leegumes
iv. Fibre croops
v. Fats & oiils seeds
vi. Cereals
vii. Tree croops
viii. Vegetaables (Applle, grapes ettcs)
viii. Livestoocks & Fishheries.

Plates 1. Moodel of Farmeers Field Sch


hool in Minnna, 2011 for 100
1 farmers by
b ARATIB
BIOTECH Limited

Plates 2. Moodel of Farmeers Field Sch


hool in Minnna, 2012 for 100
1 farmers by ARATIB
BIOTECH
Lim
mited.

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Appendix 66- Aviation
n Technolog
gy (Air Traactor for Pollution
P Control )

PC3R Aviattion ®
ARATI P
The AT-8022 Air Tractorr will be adap pted for polllution control, remediatio
on and post re
remediation restoration
r
ecology .Ouur patented biiodegradation n materials ffor hydrocarbbon clean-upp will deployyed using AT
T-802 Air
Tractor on laand degradattion sites globally.

AG-AVIAT TION support servicess, is an Aerrial applicaation Compaany with am mple experrience in croop
seeds nutrittion, operattions in pestt control annd general aerial
a appliccation servicces that suppport fertilizzer
application, pesticidess, herbicidess, rodents, bbirds contro
ol, fire fighting, oil spiill pollution
n and controol.
Our crop sseed appliccation and other backk-stop serviices coincid des to imprrove crop yields by an
upwards off 25-30 % per hectare. In less thann 5 SECOND DS PER HE ECTARE, oour Air Tracctor (AT 8002)
has the abillity to eradicate any pest in any croop, control fire outbreaak, fertilize the ground and seed riice
from the airr in the mosst efficient, accurate annd accountabble way.

 Ourr core businness area cov


vers;
 Croop Spray Serrvices
 Envvironmental Pollution Control
C
 Firee Fighting Services
S
 Qelea bird conttrol
 Air Tractor Salles and serv
vices supporrt
 Ag--Pilots Trainning.

gric Air plaane manufacturers baseed in Texass USA. AG


Air Tractorr is world’ss largest Ag G-AVIATIO
ON
AFRICA iss the sole representativee and excluusive operato
ors in Africa and Sub SSaharan.

The followiing points are


a to be notted:

i. Presssure for higgher yields will continuue


ii. Prooducing morre food on less
l land wiill continue
iii. Eveer expandinng Nigeria population
p w
will continu
ue
iv. Dem mands on food
fo producttion will coontinue
v. Dem mand for joob creation will
w also coontinue

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Appendix 7 – Exhibitioons, Confereences & Worrkshop

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ORGANIC AGRICULTURE PROJECT IN TERTIARY INSTITUTIONS IN NIGERIA
ROOM 224, COLPLANT BUILDING, UNIVERSITY OF AGRICULTURE, ABEOKUTA
_____________________________________________________________
November 26, 2013

Mr. Ayodele Otaiku


Managing Director
ARATIBIOTECH,
Victoria Island, Lagos
Lagos State

Dear Mr. Otaiku,

APPRECIATION

I write, on behalf of the Organisers of the 9th National Conference on Organic Agriculture held at Abeokuta, Ogun
State from November 11 to 15, 2013, to profoundly thank and appreciate you for your sponsorship of 40
customised high quality conference bags, 60 pens, 200 pieces of promotional stickers and 5 large size banners in
support of the conference in reference.

It will be recalled that the conference ‘Organic agriculture for national food security, biodiversity and climate
change adaptation’ was well attended by scientists, organic agriculture practitioners, policy makers,
manufacturers, private organisations and other stakeholders in the organic agriculture sub-sector from all over
Nigeria and some West African Countries all of whom took turn to visit the exhibition stand where your company’s
products, technological advancement and outstanding service delivery stood out.

I am particularly pleased about your additional offer, during our discussion at the conference, to sponsor the
hoisting of a dedicated website for OAPTIN at which time you asked that I furnish you with the content of the
website as soon as possible to enable you commence the web design. I have intimated the National Secretary
(OAPTIN), Dr. O. S. Sakariyawo, who is statutorily empowered to manage the website, to kindly follow up with
you on this.

Once again, I appreciate and applaud you for your unequalled generosity. It is our special prayer that ARABITECH
will continue to grow in width and bound in the years ahead.

While looking forward to more fruitful years of mutual relationship between OAPTIN and ARABITECH, it is
hoped that the conference materials including the book of abstract, jotters, pens, bags etc will leave your company
in perpetual memory and archive of our members and associates.

Thank you, Sir

JsatungwuS

Dr. J. J. Atungwu
(Chairman, LOC)

© 2016 ARATIBIOTECH Limited 107


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Appen
ndix 8 Aratibiootech Limited B
Biopesticide Pllant Architecturral Model 3-Design, Nigeria

AD
DMIN
ENTRANCE

R
RETAIL SHOPS
S

PA
ARKING SPACE
&
Y
LOADING BAY FARMERS BUSINESS
S
NING SCHOOL
TRAIN
WAREHOUSE

PRODUCTION AREA
A

Araatibiotech Biopessticide Plant, Pro


oposed for Six Geo-Political
G Zon
ne, Nigeria
Maanagement and IInvestment : Fraanchise
uild, Operate andd Maintenance : Franchise owner ( 70%) and Arratibiotech Limiited (30%)
Bu

© 2016 ARATIBIOTEC
CH Limited 110
0
View publication stats

AR
RCHITECTURAL
L DESIGN BIRD V
VIEW PROPOSE
ED BIOPESTICIIDE PLANT, NIG
GERIA, WEST-AF
FRICA

N
N.B: 1. Bill of Qu
uality (BoQ) is aavailable on requuest by Investor.
2. For Invesstor in the Biofeertilizer Plant , A warehouse can be converted to the Biofertilizerr Plant for Produ
uction.

© 22016 ARATIBIOTEC
CH Limited 111