A FEASIBILITY STUDY ON SOYAMILK PROCESSING

BY

EKELE, STEPHEN OGIRA

19/12721/MSC

DEPARTMENT OF AGRIBUSINESS MANAGEMENT

FEDERAL UNIVERSITY OF AGRICULTRUE, MAKURDI,
BENUE STATE

SUBMITTED TO: PROF. A. C. IHEANACHO

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TABLE OF CONTENT

Background of the Business

Market Analysis

Technical Element

Project Site

Plant and Equipment

Personnel

Project Implementation Plan

Finance

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INTRODUCTION

Soya milk is a high protein, iron rich milky liquid produces from pressing
ground, cooked soyabeans. Creamy white soy milk resembles cow’s milk but in
fact differs from its dairy counterpart in number of ways. Not only is it higher in
protein and iron content, but it is cholesterol-free, low sodium. It is however,
lower in calcium and must be fortified with calcium when given to growing
children. Those who are allergic to cow’s milk or unable to digest lactose, the
natural sugar found in cow’s milk, find soya milk easy to digest since it is
lactose-free.

Those who are calorie-conscious can purchase reduced fat soya milk (called lite
soyamilk) but this is often lower in protein as well. Some do not enjoy the taste
of original soya milk, so manufacturers now offer flavoured soya milk. Soya
milk can be substituted for milk in nearly any recipe. Those who merely want to
boost protein intake often add powdered soya milk to other beverages; others
find it economical to purchase it in powder form and then make soya milk when
they add water to the powder. Children under one year of age should be given a
formula of soyamilk specifically developed with their nutritional needs in mind.

Soya milk that is intentionally curdled is known as tofu.

NAME OF BUSINESS PROMOTER

Yeshuas soyamilk

PROJECT IDEA AND OBJECTIVES

To live a healthy life style, protein, calcium, vitamins and minerals should be in
the food in required amount.

Most of the nutrition earned from meat, fish, milk, eggs, vegetables and
greenery can also be achieved with a daily intake Yeshuas soyamilk, which
ensures a comprehensive nutritional balance.
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The size of the business is medium scale and the target market is the local
market.

The major ingredient is soyabean while other ingredient include, care sugar,
vitamin mineral blend (Tricalcium phosphate, calcium carbonate, vitamin A
palmitate, vitamin D2 Riboflavin B2 Vitamin B12 sea salt, natural flavor, gellan
gum).

The available sizes are 100mls and 500mls, the shelf life is 1year and the ideals
storage conditions (store in an air tight condition).

The reasons for the selection of the product are:

 High demand for ready to use products.

 Immense progression in the healthy food in current situation.
 To provide a supplement which contains energy, proteins and all required
main nutrients to specially children.
 High availability of raw materials (local) and get maximum usage.
 To provide balance diet instead of high calorie instant food without food
additives.
 Good protein source for vegetarians.
 To reduce nutritional anaemia, third degree protein energy malnutrition
and underweight among children

Economic and Market Overview

Identifying: (Through a questionnaire)

 Customer preference of consuming legumes and cereal products

 Awareness of nutritional values of native tuber crops
 Consumption and purchasing patterns of leguminous food.
 Preferred quantity size and awareness of packaging
 Effective advertising media.
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Table 1: Average Frequency of Consumption

Frequency of Consumption Percentage (%)

Never 6

Occasionally 47

More than 3 times a week 27

Once a week 7

1 – 2 Times per day 13

Table 2: Average Frequency of Purchasing

Frequency of Purchasing Percentage (%)

Daily 3

Twice a week 4

Weekly 13

Once in two weeks 20

Monthly 60

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Table 3: Awareness of Nutritional Value

Awareness of Nutritional Value Percentage (%)

Not Important 10

Less Important 2

Moderately Important 70

Very Important 90

Table 4: Purchasing Places of Leguminous and other cereal product

Purchasing Places Percentage (%)

Grocery 40

Super Market 25

Whole Seller 2

Retailers 33

Table 5: Preference of Buying Yeshuas Product

Preference Percentages (%)

Yes 73

No 27

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Table 6: Preference of Packaging Sizes

Preference Percentages (%)

100mls 7

200mls 40

500mls 53

Table 7: Awareness of Packaging

Awareness Percentage %

Not important 7

Less important 33

Moderately important 27

Very important 33

Table 8: Preference of Advertising Media

Preference Media Percentage %

Email 7

Social Media 33

Radio 27

News Paper 33

Television 41
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MARKET ANALYSIS

Marketing Mix

Product Price

 High nutritional value Strategy

 Convenient size Internal cost reduction
 Precooked – ready Discount and allowances
Production prices
 No chemical and additives Pricing Methods
Cost plus pricing
 Made form wholesome ingredient Competitive based pricing

Place Promotion

Consumer

 Channels – supermarkets, Advertising – TV, Social,

Whole sellers, retail market media radio and news paper
 Location Event Sponsoring, Store Promotion
 Inventory Trader
Personal selling – (local industries)
Sales promotions

SWOT ANALYSIS

Strengths Weakness

 High nutritional value Not an established brand

 Value added (Lack of brand heritage)
 Ready to use

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  Use of local raw material and availability
 Low production cost
 High profit margin

Opportunities Threats

 Increased awareness of consumers Already established food

on healthy food. Brand
 High population of vegetarians Oil price and electricity is
 Changing customer attitudes high

Segmenting, Target Group Identification and Position

Geographic Segmentation – Both urban and rural areas

Psychographic Segmentation – Having busy lifestyle

- Having positive Attitude toward leguminous

food.

Behavioural Segmentation – More concern about health benefits and nutritional

value.

- Seeking of ready to use food.

Demographic Segmentation – Especially for children (other adolescent and elders)

- Low, Medium and high income.

Target Market Segments

 Growing children above 2 years

 Children in school age
 Pregnant mothers
 Health conscious adolescents and elders
 Vegetarian consumers
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Position as

 Nutrias food
 Rich in protein, calcium, zinc and iron
 Ready to consume
 Convenient pack size

Likely Competitors

 Vitamilk
 Holandia Soyamilk
 Kirklard Soyamilk

TECHNICAL ELEMENT

The proposed production volume is one (1) tons / day at one hundred percent
capacity utilization and the plant would operate at 90% of the installed capacity
for a single shift of eight (8) hours per day for 300 working days per annum and
producing 18,000 cartons of 100mls and 500mls glass bottles of twelve pieces
of soyamilk per annum.

PRODUCTION INPUTS

 Soyabean grains
 Cane sugar
 Vitamin mineral blend
 Sea salt
 Natural flavor
 Gellan Gum
 Glass bottles
 Cartons (Packaging)

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UTILITY REQURIEMENT

 Public power supply and standby 1.5KVA generator

 Borehole with overhead tanks to ensure steady supply of water
 Fuel

SOURCES AND COSTS OF INPUTS

Raw soyabeans is mostly cultivated by rural small scale farmers. In Benue

State, Local Government Area that tends to cultivate is products are majorly the
Tiv speaking areas consisting of Makurdi, Gwer-East, Gwer-West, Guma,
Tarka, Gboko, Ushongo, Konshisha, Buruku, Katsina-Ala, Ukum, Kwande,
Logo and Vandeikya local government areas. From the aforementioned local
government areas, Tarka local government area are more into soyabeans
production because it soil and environmental condition favours it growth
resulting to high yields.

Soyabeans for production will be gotten or purchased directly from the farmers
at the farm gate and from the gain market too in order to meet the production
capacity.

The best availability of soyabeans is sold at the rate of 15,000 per 100kg.

Other inputs such as vitamin and mineral permits purchased from suppliers in
the local market.

PROJECT SITE

Geographical Location: The selected site for the factory is Gwarche, after
Wannune, Tarka Local Government Area of Benue State. This site was selected
because of the availability of raw material, population base (less residential
work force availability and cost, good access route, away from flooding, disease
and infections area).

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As the site is far from residential areas, they will be less environmental and
infrastructural impact on the surrounding population.

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PERSONNEL
Job Title Number of Employers
General Manager 1
Human Resources Manager 1
Sales and Marketing Manger 1
Production Manager 1
Production Executive 2
Quality Assurance Manager 1
Quality Assurance Executive 1
Financial Assistant 1
Marketing Executive 1
Accountant 1
Engineers 2
Sales Representatives 4
Floor Level Workers 15
Driver 4
Security Men 4
Indirect Workers 1

Project Implementation Plan

Activities Time Table
 Construction Plans 1 year, 6 Months
 Machinery Commissioning Plan 2 Months
 Staff Recruitment Plan 4 Weeks
 Production Plan 2 Months
 Marketing Plan 4 Weeks

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FINANCE

Cost of site 1,850,000

Cost Estimate for Buildings and Equipments 25,376,675
Total Investment Cost 27,226,675
Labour Cost (Wages and Salaries) 5,731705
Cost of Raw Material 45,000,000
Total Production Cost 77,958,380

Project Financing Sources

 Personal saving
 Investors
 Taking loans

Income Statement Projections

1st Year 2nd Year 3rd Year 4th Year 5th Year
Revenue 80,005,283 81,120,000 82,867,200 84,240,000 85,800,000
Cost of Sales 31,963,245 32,427,913 33,180,389 33,838,263 34,622,937
Cross Profit 48,042,038 48,692,087 49,686,811 50,401,737 51,177,063

Operating Expenses
Overheads 20,421,216 18,328,400 19,273,830 15,440,000 17,040,000
Depreciation 1,917,048 1,725,343 1,615,305 1,601,000 1,562,000
Total Operating 22,338,264 20,053,743 20,889,135 17,041,000 18,602,000
Expenses
Net Profit before 25,703,774 28,638,344 28,797,676 33,360,737 32,575,063
tax (15%)
Income tax 3,855,566 4,295,751 4,319,651 5,004,110 4,886,259
Net profit after 21,848,208 24,342,593 24,478,024 28,356,626 27,688,804
income tax
BREAK EVEN POINT

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Selling Price / Unit – 180

Variable Cost/Unit – 111.50

Fixed Cost – 27,266,675

Per unit contribution to fixed cost = selling price – variable cost

= 180 – 110.50

= N69.50

Break Even Point/unit = Fixed cost

Per units contribution to fixed asset

= 27,266,675

69.50

= 392,326 units

Pay Back Period

Year Net Cash Flow

0 27,266,675

1 21,848,208

2 24,342,593

3 24,478,024

4 28,356,626

5 27,688,804

Payback period = 1 year + (25,418,467) x 12

24,342,593

= 1 year + 3 months

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Net Present Value at 10%

Year Net Cash Flow Dfc10% NPV 10%

0 27,266,675 1 27266,675

1 21,848,208 0.909 19,860,021

2 24,342,593 0.8264 20,116,719

3 24,478,024 0.7513 18,390,339

4 28,356,626 0.6830 19,367,576

5 27,688,804 0.6209 17,191,978

94,926,633

- 27,266,675
67,659,958

CONCLUSION

- According to the market survey, there is potential and growing market for
the product
- The value for the NPV at 10% discount rate is positive, the initial investment
will be recovered
- The payback period is 1 year and 3 months
- The break even points in terms of units is 392,326 units
- By considering all factors, we can conclude that establishing of a Yeshuas
Soyamilk Manufacturing Plant is feasible and profitable.

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