Professional Documents
Culture Documents
(GGFPC)
EXECUTIVE SUMMARY
Cassava especially in the form of garri is one of the most popular and widely consumed food
crops in Nigeria.
Because it is such an important food in our dear country and an extremely versatile crop, it is in
fact, the cornerstone of food security in Nigeria. The competing needs for cassava cut across
both human and animal consumption. It is fast becoming a popular raw material in industrial
production and is now a preferred material for making biofuels. As Nigerias population
continues to grow rapidly, the demand for food staples like cassava is increasing. This high
demand for various forms of processed cassava is pushing prices to the ceiling. Several small
scale cassava farmers are making a fortune and additional income through this business.
According to a priori investigation, the profitable way for a farmer to market his cassava is to
add value to it; especially by selling it as garri.
The analysis of the present market situation shows that selling as toasted cassava granules (i.e.
garri) will survive the existing competition because demand for garri is elastic. On another hand,
an a priori fact gotten from a feasibility study carried out on the market for dried high quality
cassava peel DHQCP reveals a raving demand for it as well. Hence, my resolve to include
DHQCP is because it comes with no additional cost, but instead, with additional income, high
productivity and robust economics of scale.
This project is estimated to cost the sum of ten million nine hundred and eight thousand two
hundred and fifty naira only (N 10,908,250) is expected to return a profit of (N 9,128,250) in the
first year and break-even of all its invested capital within the first one and half (1 1/2) year of
operation. The innovative features of the business lie mainly on the production process. Instead
of the usual manual production process, everything thing will be mechanized. Green Gold Farm
& Processing Company Ltd. will mechanize the production process from peeling of the cassava
to frying of the garri and processing of DHQCP into animal feed. By this our cassava processing
plant will be hygienic. Our product is consumed at all seasons by all manner of people and
animals due to its nutritional value.
Finally, careful assessment of the environmental and organizational factors using SWOT analysis
reveals a project that has a promising future and a high propensity of success.
TABLE OF CONTENT
Cover sheet 1
Executive summary 2
Table of content 3
List of tables 4
Introduction 5
Production Plan 7
Financial Analysis 14
SWOT Analysis 25
Conclusion 26
Appendix 27
Business Profile
Personal Information
LIST OF TABLES
LIST OF FIGURES
Due to the very short shelf life (2-3 days) of harvested cassava tubers, inadequate road and
power infrastructure, most of the cassava produced in Nigeria is consumed locally, where it is
still unable to address the growing consumption. As a result, a lot of the cassava harvested every
year can get spoilt and never make it to the market. This wastage is estimated to be worth
millions of naira every year. However, by adding value to the cassava crop and processing it into
a ready-to-eat staple like garri, entrepreneurs can earn a very healthy profit on the open retail
market.
More so, it is worthy to note that as humans, animals, industries and biofuels continuously
compete for the valuable cassava crop, the prevailing local market prices will continue to
explode. Of all the forms of cassava that can generate income, garri is the cheapest and easiest
way for entrepreneurs to enter and exploit the processed cassava market. Garri production is a
low-cost and largely traditional process and can be done on a small scale.
Garri is one of the most staple Nigerian diets because not only is it cheap, but it is easy to make
and can be taken in majorly two ways that are fast to prepare. Those in the garri business know
that this is the fastest way to make money especially in the agro processing industry. Garri is one
of the major products from processed cassava the staple food for almost all Nigerians, as about
75% of Cassava is processed into garri. Some entrepreneurs are going into the garri processing
business especially as this product is recession proof. The recent economic downturn in the
country has seen more and more people turning to garri. Also, another factor in favour of the
garri processing business is the growth in the population which has pushed the demand for garri
and has also caused more garri processing businesses to crop up to be able to meet the growing
demand.
Cassava peels are perishable and are mostly disposed of by burning or allowing them to rot in
heaps, causing pollution. On the other hand, several researchers have confirmed the suitability of
cassava peel for feeding livestock and the potential of cassava peels as a good substitute for
maize for all classes of both ruminant and non-ruminant animal. High levels of HCN in cassava
peel based products are reduced substantially through the innovative processing where grating,
de-watering, fermenting and sun drying results in reduction of hydrocyanic acid (HCN) levels
below the permissible levels of 100 ppm. Cereal production particularly maize in Nigeria is not
sufficient to cater for the growing demand of food, feed and industrial uses. Identifying alternate
feed resources as a substitute for maize would reduce feed costs and spare maize (to a large
extent) for food and industrial uses.
Description of Business
Many people are into cassava farming and garri production in Nigeria, yet the local and
international demand is still high. More so, many feed millers are demanding for the Dried High
Quality Cassava Peel (DHQCP) mash because its cheaper than and as efficient as the maize
substitute. To thrive in the business as a new entrant, creativity and innovativeness in farm
management, quality control, effective garri marketing and efficient delivery of dried high
quality cassava peel is necessary. The branding and packaging of the garri and DHQCP is
expected to be diligently explored and exploited. The company and brand name is Green Gold
Farm & processing Company Ltd. Inclusion of DHQCP production is of essence because it
creates additional income with no additional cost. This is due to waste conversion propensity and
the economics of scale (in using the same set of machine for both garri and DHQCP processing).
The proposed farm will be 5 hectares of land at Nasarawa State. The choice of this location is
due to the good topography (gently sloppy in nature) in the state and the closeness of the state to
F.C.T Abuja, where the demand for garri is very high. With the increasing rate of population and
also the insufficient cassava farmers /processers in F.C.T, and with high number of fish farmers/
animal feeds processers hence, our DHQCP has a ready market.
The vision of the proposed project is to create an investment pool that will generate an
independent and continuous source of income. The mission is to create supplementary
employment opportunities (every year) by sustaining the business, expanding, thereby etching a
landmark in the industry (in the long run).
Business Objectives
The objectives of the proposed cassava farming for garri and Dried High Quality Cassava Peel
DHQCP production project are:
Under normal conditions, about 90% of all cassava cuttings planted sprout within 2 weeks of
planting. Cuttings that do not sprout should be removed and disposed of away from the cropping
area in order to prevent the transmission of any disease that may have caused the failure of the
cuttings. New healthy cuttings should be acquired and planted by the third week after the initial
planting in order to maintain the planned plant density. However, the new cuttings should not be
planted in exactly the same hole from which the failed cuttings were removed, to avoid the risk
of repetition of the original problem. Drought conditions could cause a much higher failure rate.
In such a situation, the farmer should wait until rains resume before replacing failures.
2.1.2 Weeding
Weeds can retard the growth and reduce the performance of cassava. A well-weeded cassava
farm can yield 3040% more roots than a poorly weeded farm. Weed control forms a significant
part (30% 50%) of the labour costs in cassava production. The exact weeding frequency will
depend on the type and severity of the local weed problem, but in general: It is important to start
weed control 34 weeks after planting. This can be done at the same time as the replacement of
the failed cuttings (in week 3) in order to maximize the use of labour. Weeding should be
repeated in weeks 8 and 12, while the final weeding should be done between 20 and 24 weeks
after planting, depending on the rainfall. During dry phases weeding may not be required but it is
always recommended to destroy weeds before dry phases and after the resumption of rains. Once
the canopy of the cassava and of the intercrops (if any) has closed the shading will effectively
control most weed growth. The overall total number of weeding cycles depends, in part, on the
resilience of the weeds, and this depends on agro-ecological conditions. Weeding can be done
manually (hoe and cutlass), mechanically (using a tractor) or chemically (although there are no
specifically prescribed herbicides for cassava). However, mechanical weeding beyond the first 4
weeks after planting can damage the roots. Therefore, manual or chemical weed control is
preferred after this period. Farmers should use their local knowledge to decide which weeded
material should be left on the plot or removed and discarded. Generally, small broad-leaved
weeds can be left on the field because they will die from the heat of the sun and become mulch.
Bulky weeds, weeds with rhizomes and weed species with the capacity to form roots from stem
pieces tend to re-sprout if cut and left on the soil surface, so the farmer should uproot and
dispose of these types of weeds away from the field. Tall grasses should be uprooted and
removed from the field before they flower in order to prevent seed formation and germination,
which will further propagate the weed species.
Processing cassava roots into garri takes several steps, and these are:
Sieving wet cake into grits and roasting grits into garri;
Freshly harvested cassava roots are covered with soil and dirt and some may be damaged or
rotten. Only healthy roots (without rot or other damage) should be transported to the factory. At
the factory, the roots are peeled to remove the outer brown skin and inner thick cream layer and
washed to remove stains and dirt. The water source should be checked regularly to ensure it is
not dirty or contaminated.
Cassava roots are traditionally grated into a mash or pulp as part of the process to remove
cyanide and make the roots safe to eat. Traditional cassava graters are usually made from
perforated metal sheets. These rust quickly and are difficult to keep clean. They are also very
slow and labour intensive to use. Mechanized graters are needed to produce a sufficient quantity
of cassava mash to meet market demands and standards. Smallholder processors therefore need
to learn how to use and maintain these machines.
De-watering and fermenting complete the process of removing cyanide from the cassava mash.
This is done traditionally by using stones or logs as weights to press excess water out of the bags
of cassava mash. The bags are then left to drain and ferment for a few days. As with traditional
graters, these methods are slow and unhygienic, and are therefore not suitable for a cassava
processing business. Several improved methods are available.
Bagged cassava mash can be left on the fermentation rack for one or more days before de-
watering. Alternatively, the bags of cassava mash can be pressed for the required number of
days, during which time the mash will ferment. At the end of the fermentation period, the mash
will become a firm, wet cake. Fermentation periods of longer than one or two days will produce
very sour products. Consumer tastes and preferences will therefore determine the length of the
fermentation period.
Garri is made by sieving the wet cake into small pieces known as grits and then roasting or
frying the grits in a hot frying tray or pan to form the final dry and crispy product. Garri is
normally white or cream, but will be yellow when made from yellow cassava roots or when fried
with palm oil. It is important to make sure the taste and smell is acceptable to local consumers.
The product should be free from mouldy, insects (dead or alive), dirt and any other material that
could be hazardous to health.
An innovative processing technology for converting fresh peels into high quality cassava peel
(HQCP) mash for use as livestock feed has been developed. The process is simple and can be
carried out by small-scale processors, more than 80% of them women, to transform waste into a
valuable feed resource, generate new incomes, create employment, improve livelihoods, and
clean up the environment around cassava processing centres. The various steps followed in
processing peels into DHQCP are listed below:
Sorting;
Grating;
Pressing;
Sieving;
2.3.1 Sorting
The quality of the finished product is as good as the quality of the raw material used so cassava
peels that enter the process should be fresh (harvested the same day) and free from contaminants.
When processing is delayed beyond a day, the peels start to ferment and become soggy/slippery
and difficult to grate. Stumps, large-sized wood tubers, and other foreign materials have to be
sorted out and discarded before grating the peels to avoid damage to the rasper.
2.3.2 Grating
Grating has to be done three times because of the tough nature of peels. With each grating, the
particle size reduces gradually. The reduced particle size facilitates rapid dewatering, drying, and
easier handling.
2.3.3 Pressing
Pressing the grated peel requires a hydraulic jack, wooden planks, woven bags, and a metal
frame which holds loaded bags of freshly grated peels. Grated peels are packed in small
quantities of 8−10 kg and the bags are stacked in the metal frame. Using planks and jacks, the
grated peels are squeezed to rapidly get rid of as much water as possible.
Approximately 50% of the weight of grated material is lost as the water is removed during this
process. The resulting cassava peel cake after dewatering has around 38−42% moisture and has a
shelf life of 5−7 days. As is, cassava cake can be fed directly to cattle, goats, sheep, and pigs.
2.3.4 Sieving
To process it further into dry mash, cassava peel cake is re-grated to loosen it into a free flowing
material that can be subjected to sieving to separate the fine mash (lower fiber, high energy
content) from coarse mash (higher fiber, lower energy content). Sieving can be done manually or
by using a mechanical device.
In garri business, the colour, taste and friability of the garri particles determine the market. More
so, consumer preference varies from place to place, and region to region. Hence, Green Gold
Farm & Processing Ltd. must give due consideration to the consumers choice of quality that
will satisfy their needs. More so, DHQCP will be of two (2) kinds: the fine mash (for poultry,
fish, and pigs); and the coarse mash (for cattle, sheep, goat and pigs).
While carrying out feasibility survey, questionnaire were administered to 1000 randomly
sampled buyers (across 5 major markets in Abuja, F.C.T, Nigeria); making a total of 1000
respondents. Out of which, 95% of them said they will prefer packaged garri to the open market
ones at the prevailing market price. Hence, a ready market for GGFPCs packaged garri is
guaranteed.
More so, when carrying out feasibility study, 15 outstanding feed millers in Abuja were reached
out to and they have all shown ardent interest in buying both fine and coarse mash of the
DHQCP. They are ready to buy 50kg of DHQCP (both fine and coarse mash) at N 3000. In other
words, there is ready market for DHQCP.
The proposed cassava farming for garri and Dried High Quality Cassava Peel (DHQCP)
production business will be solely owned by GREEN GOLD FARM AND PROCESSING
COMPANY LIMITED (GGFPC).
The proposed farm will require a qualified farm manager with profound knowledge and
experience in farm management, two farm assistants with innate skill and experience in cassava
farming, two processors with adequate knowledge and technical know-how of both garri
production and DHQCP production, one Sales person/store keeper with adequate knowledge of
record keeping and marketing skills, and one security officer who is physically fit. Table 1
explains further in details:
The farm manager is assumed to be paid N 30,000 per month while each farm assistant will be
paid N 20,000 monthly, sales person/store keeper will be paid N 20,000 per month, the two
permanent workers will be paid N 10,000 per month each, and security will be paid N 10,000
per month.
The following table summarizes all the costs that would be involved in executing this project.
Generator 180,000
7,286,500
Variable Cost
56,250
Agro-chemicals (super gro
and insecticide) for hectare
Fuel 135,000
240,000
Salary for 2 permanent staffs
per annum, (10,000 per
month)
3,621,750
3,621,750
TOTAL 10,908,250
TOTAL 398,750
150,000
100,000
50,000
0
Soil Cassava
Fertilizer Insecticide Fuel
improvem cutti ng
1,440,000
Total
Total 1,580,000
600000
500000
400000
3-D Column 1
300000
3-D Column 2
200000 3-D Column 3
100000 3-D Column 4
0
Planting of Weeding 3 Fertilizer Spraying of Land making of
Cassava times Application chemicals preparation ridges
Total 7,286,500
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
Cassava Sieving Weighing Land Files Nap sack
peeler machine machine sprayer
RETURNS
The type of variety that will be planted (i.e. TMS 419) will give about 20 tons of cassava (per
hectare) after 10 months. Therefore, from the available 5ha of land, 100 tons of cassava tubers
are expected. And experience has it, that those 4 tons of cassava tubers is equivalent to 1 tons of
garri, where 1 ton is equal to 1,000Kg. Therefore; 100/4 = 25 tons, where 25 tons is equal to
25,000Kg. And the garri will be bagged in 100Kg rubber. Therefore, the total number of bags
realizable form 25 tons is 250 bags of garri.
Hence, (250 x 15,000) = N 3,750,000
At a start, Green Gold Farm & Processing Company Ltd. will randomly source for 150 tons of
cassava peels in the first year of production. 150 tones is equivalent to 150,000kg. And the Dried
High Quality Cassava Peel (DHQCP) will be bagged in 50kg rubber bag. Therefore, the total
number of bags realizable from 150 tones is 3,000 bags.
TOTAL 12,750,0
REVENUE 00
The depreciation of hoe, cutlass, wheel barrow, grater, presser and fryer is shown in table 10;
using the straight line method:
i.e. dt = C S
Where dt = depreciation;
C = cost of asset;
S = salvage value.
L = Useful life
Total 192,500
= N 8,935,750
While,
= ₦ 1,841,750/ ₦ 9,128,250
= 0.20
This means that for every naira invested in this project, a 20K gain will be realized.
= ₦ 12,750,000 / ₦ 10,908,250
= 1.168 ≈ 1.2
Hence, this project can be adjudged to be a viable venture since the Benefit-Cost Ratio is
greater 1.
The Break-Even Point is the point or level of financial activity at which expenditure equals
income, or the value of an investment equals its cost, with the result that there is neither a profit
nor a loss. Hence, any return accruable thereafter is a continuous gain or plus to the business.
TFC = N 7,286,000
Unit VC = N 1,207
= N (3000 1,207)
= N 1,793
Note that Contribution is the gross margin per unit of DHQCP.
To break even in this proposed DHQCP production, the amount of bags that must be sold:
TFC / Contribution;
= 4,063.8 ≈ 4,064
In order words, one will break even producing DHQCP immediately after the sale of 4,064bags
of DHQCP in the second year of production. Therefore, any return accruable from subsequent
sales is a profit in continuum. Hence, signifies the birth of a surplus after paying for the initial
outlay. Therefore, payback period is less than a year and a half (i.e. 1 1/2years).
Net Present Value (NPV) and Internal Rate of Return (IRR) were used to assess the risk of the
farm. The NPV is equal to the present value of future net cash flows, discounted at the cost of the
capital. The NPV, calculated with 15% discounting rate was positive, implying that the venture
is viable. The payback period (expected number of years required to recover the original
investment) is about 1 ½ years. The quick payback period implies low risk in the proposed
investment.
More so, given the positive NPV, the project can therefore be accepted as viable. We will also
accept the feasibility and sustainability of the proposed garri cum DHQCP production given the
fact that IRR (i.e. the rate at which Net Present Value equals zero) is greater than the assumed
market interest rate (i.e. 117% > 15%). It therefore implies that if the project is established with
an initial outlay of ₦ 10,908,250 on a loan of the said amount, then a surplus of ₦ 31,831,614 is
realizable (after paying the initial outlay) in 5 years’ time because the internal rate of return
(which is 117%) is about 9 times the assumed interest rate on loan (which is 15%).
Given that the status quo (of labour cost and prices of other input materials) remains the
same in the next 5 years, the NPV and IRR are analyzed as follows:
NPV AND THE CASSAVA ENTERPRISE FOR THE FIRST 5 YEARS 15% DISCOUNT
RATE
(1+0.15)^2
(1+0.15)^3
(1+0.15)^4
(1+0.15)^5
NPV=TOTAL PV ( for 5
years)INITIAL IRR=117%
OUTLAY
NPV=(42,739,864.45-
10,908,250)=31,831,614.45
The IRR is the discounting rate that equates the present value of the projects expected cash
inflows to the present value of the projects cost. If the net present value exceeds the cost of the
funds used to finance the project, a surplus remains after paying for the capital. The IRR for this
proposed project is 117%, implying that the venture is profitable to operate even if the planning
horizon is only five years. In fact, the IRR is 9 (nine) times the discounting rate.
The findings of the analysis indicate that the proposed garri processing cum DHQCP production
is viable and financially feasible. The results obtained indicate a positive NPV and acceptable
IRR. Hence, this business is sustainable because production and market capacity can be built to
sustain improvements over time.
Gross Margin per plastic of garri = Gross Margin / Total Production (plastics)
Production costs of garri per plastic = Total variable cost / plastic of garri produced
Percentage return on variable cost = (Gross Margin /Total variable cost) x 100
= N (12,750,000 – 3,621,750)
= N 9,128,250
Production costs of garri per bag = Total variable cost / bags of garri produced
= 3,621,750/ 250
= 14,487 ≈ 2292
Percentage return on variable cost = (Gross Margin /Total variable cost) X 100
= (2.52) * 100
= 252%
= (1.17) X 100
= 117%
= 0.84 X 100%
= 84 %
Strengths: One of the factors critical to a successful outcome of any investment at all, is the
availability of time to personally concentrate on its management. I do have the time, passion,
determination and tenacious doggedness beaming on all shady paths to breakthrough. I believe
so much in the project. More so, am fully equipped with the technical know-how and skills of
cassava farming, garri production and production of dried high quality cassava peel (for feed).
And I will effectively and efficiently manage the project given my wealth of experience in
project management (especially with regards to farming), and skills that will come to bear in all
of the production and marketing processes involving administration, procurement, inventory
management and the supply chain.
Experience, they say, is the best teacher. Its indeed a pedagogue that stands as a guide in the
path of any successful entrepreneur, making him more courageous, determined and wise.
Lessons from my past business management experience have been learned and would be re-
invigorated while executing future plans to extract the best from my courage, devotion and
wholesome commitment.
Weaknesses: Paucity of funds is usually a greater constraint. Without means of finance, even the
best of ideas may not come to fruition or reality. However, aside the available equity, additional
funding will be sourced from a reputable commercial bank to offer the necessary financial
backbone.
Opportunities: The high market demand for garri and dried high quality cassava peel DHQCP
leaves a loop hole to exploit and a goldmine to diligently explore.
Threats: At any season in mono-cropping, most of buffer crops/weeds are generally absent or
limited, hence, exposing a planted sole crop to insect pest infestation. To curtail this however,
maize would be planted along side with the cassava which will in turn give a marginal income.
Threat of theft is unlikely to rear its ugly head in our location because for over ten years I ve
been working on the farmland, Ive never recorded any incident of theft. There is also no
foreseeable threat of the herdsmen on the farmland, given its location.
7.0 CONCLUSION
The proposed cassava farming for garri and Dried High Quality Cassava Peel (DHQCP)
production has a reasonably high chance of success at the start and its profitable. Aside the
profitability, most fascinating about this proposed project is that it directly depicts sustainable
agriculture as it were, because it increases productivity, bolsters economics of scale, its
environmentally sound, and economically viable and ensures continuous stream of income.
Increasing employment generation is also a key benefit of this enterprise as the business expands
over time. The products have the propensity to be produced efficiently and can be marketed
effectively.
APPENDIX
BUSINESS PROFILE
PS.: * means, even though 5 years was stated as time frame; however, the project is intended to
be sustained for life
**means there will be no additional cost as a result of economics of scale because it s the same
machine, material and man power used in garri production that will be also used in DHQCP
production.
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