NATIONAL OPEN UNIVERSITY OF NIGERIA

UYO STUDY CENTRE

BUSINESS PLAN FOR THE PRODUCTION OF COCONUT OIL

PRODUCTION AND SALES

BY

BASSEY IMMACULATA INEMESIT

FACULTY: SOCIAL SCIENCE

COURSE TITTLE: BUSINESS CREATION AND GROWTH

COURSE CODE: GST302

NOVEMBER, 2020
 Inem Coconut Oil

STUDENT PERSONAL DETAILS

NAME: Bassey Immaculata Inemesit

MATRIC NUMBER: NOU173036584

EMAIL ADDRESS: johnmonica556@gmail.com

PHONE NUMBER: 07036753753

SEMESTER: 2020/2

SEX: Female

DISABLITY: None

CURRENT PROFESSION: Student

PROGRAMME OF STUDY: B.Sc Mass Communication

FACULTY: Social Sciences

STUDY CENTRE: Uyo Study Centre

ZONE: South-South

SUSTAINABLE DEVELOPMENT GOAL: Boost Economic growth

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TABLE OF CONTENT

1.0 EXECUTIVE SUMMARY

1.1 OBJECTIVES
1.2 SUSTAINABLE DEVELOPMENT GOAL
1.3 OUR MISSION AND VISION STATEMENT
2.0 BUSINESS STRUCTURE
2.1 ROLES AND RESPONSIBILITIES
2.1.1 CHIEF EXECUTIVE OFFICER (CEO)
2.1.2 GENERAL FARM MANAGERS
2.1.3 HUMAN RESOURCES AND ADMIN MANAGER
2.1.4 ACCOUNTANT/CASHIER
3.0 SWOT ANALYSIS
3.1 STRENGTH
3.2 WEAKNESS
3.3 OPPORTUNITY
3.4 THREAT
4.0 FINANCIAL PROJECTIONS
4.1 MARKETING PLAN
4.2 FINANCIAL PROJECTIONS AND COSTING
4.3 START-UP BUDGET AND EXPENDITURE
5.0 PRODUCTION SUMMARY
5.1 PRODUCTION PLAN
5.2 PRODUCTION COST
6.0 MARKET ANALYSIS SUMMARY
6.1 MARKET SEGMENTATION
6.2 TARGET MARKET SEGMENT STRATEGY
6.3 EXTENTION OF MARKET
6.4 COMPETITION
6.5 BUSINESS COMPETITIVE EDGE
6.6 MARKETING STRATEGY
7.0 CASH FLOW FORECAST
7.1 PROJECTED SALES FOR THREE (3) YEARS
7.2 NET PROFIT FOR THREE (3) YEARS

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1.0 Executive Summary

Coconut is vastly found in the southern part of Nigeria, and other tropical

countries of Africa. At all these places the by-products of coconut are used in

some way or other in people’s daily life. Every part of the coconut tree and its

fruits are used or converted into other valuable products. The coconut fruit

contains coconut meat/kernel and coconut milk /water. Both products are

most popular edible commercial products in the industry. Coconut is rich in

dietary fibre, protein, dietary fat, carbohydrates, and micro minerals such as

potassium, phosphorous and vitamins such as niacin and riboflavin. While the

coconut milk contains micro minerals and nutrients that are essential to

human body. Based on these health benefits, the young coconuts, as well as

matured coconuts, have great demand in domestic and export markets.

Coconut is not just for eating in its raw form or coconut oil is not just for

cooking alone. Much research is going on the uses of coconut oil. Coconut oil

is popularly used in beauty, skin and hair care industry. The most important

ingredient in soap industry is coconut oil. Coconut has magical features on the

skin and helps in reducing skin aging by hydrating the skin. It acts as a natural

moisturizer on dry skin as well as on other skin types. Inem coconut oil helps

hair by nourishing hair roots and follicles and gives hair a healthy shiny look.

The soap industry depends on coconut oil for Production its soap as they are

more soluble in hard and saltwaters allowing lathering more.

1.1 Objectives
1. To train the people on how to be entrepreneurs and undertake in various
businesses even as students.

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2. To bridge the gap between entrepreneurial theories and real life practical, thus
enhancing the flow from the academic into the corporate world.
3. To give the students a chance of appreciating the structure and operations of
entrepreneurship.
4. To enlist and strengthen students’ involvement in the entire educational process
and prepare the structure of employment.
5. To ease the students’ transition from the academic to the industrial environment
after graduation.
6. To create and enhance job opportunities in Nigeria and help in economic stability.

1.2 Sustainable Development Goal

We have a goal to end hunger and poverty in a sustainable way by ending joblessness
and improving more on the nations’ economic growth.

1.3 Mission/ Vision Statement

Our vision is to establish a standard Coconut Oil Production Company whose product
will be not only be sold in Uyo –Nigeria, but also throughout Nigeria, Africa and in
other parts of the world.
Our mission is to establish a standard and world class Coconut Oil Production Company
that in our own capacity will favourably compete with leaders in the industry. We want
to build a coconut oil production business that will be listed amongst the top 10 coconut
oil brands in Nigeria.

2.0 BUSINESS STRUCTURE

Inem Coconut Oil Production Company is a business that is established with the aim of
competing favourably with other leading coconut oil brands in the industry. Therefore,
we will ensure that we put the right structure in place that will support the kind of growth
that we have in mind while setting up the business. We will ensure that we only hire
people that are qualified, honest, hardworking, customer centric and are ready to work

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to help us build a prosperous business that will benefit all the stake holders (the owners,
workforce, and customers). As a matter of fact, profit-sharing arrangement will be made
available to all our senior management staff and it will be based on their performance
for a period of five years or more depending how fast we meet our set target. In view of
that, we have decided to hire qualified and competent hands to occupy the following
positions.
 Chief Executive Officer (Owner)
 Plant Manager
 Human Resources and Admin Manager
 Merchandize Manager
 Sales and Marketing Manager
 Information Technologist
 Accountants / Cashiers
 Cleaners

2.1 ROLES AND RESPONSIBILITIES

2.1.1 Chief Executive Officer – CEO (Owner):

 Increases management’s effectiveness by recruiting, selecting, orienting, training,
coaching, counselling, and disciplining managers; communicating values,
strategies, and objectives; assigning accountabilities; planning, monitoring, and
appraising job results; developing incentives; developing a climate for offering
information and opinions; providing educational opportunities.
 Creates, communicates, and implements the organization’s vision, mission, and
overall direction – i.e. leading the development and implementation of the overall
organization’s strategy.
 Responsible for fixing prices and signing business deals
 Responsible for providing direction for the business
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 Responsible for signing checks and documents on behalf of the company

 Evaluates the success of the organization

2.1.2 Plant Manager

 Responsible for overseeing the smooth running of the coconut oil production
plant
 Part of the team that determines the quantity of coconut oil that are to be produced
 Maps out strategy that will lead to efficiency amongst workers in the plant
 Responsible for training, evaluation and assessment of coconut oil plant workers
 Ensures that the steady flow of both raw materials to the plant and easy flow of
finished products through wholesale distributors to the market
 Ensures operation of equipment by completing preventive maintenance
requirements, calling for repairs.
 Ensures that the plant always meets the expected safety and health standard.

2.1.3 Human Resources and Admin Manager

 Responsible for overseeing the smooth running of HR and administrative tasks
for the organization
 Updates job knowledge by participating in educational opportunities; reading
professional publications; maintaining personal networks; participating in
professional organizations.
 Enhances department and organization reputation by accepting ownership for
accomplishing new and different requests; exploring opportunities to add value
to job accomplishments.
 Defines job positions for recruitment and managing interviewing process
 Carries out staff induction for new team members
 Responsible for training, evaluation and assessment of employees
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 Oversees the smooth running of the daily office and factory activities.

2.1.3 Merchandize Manager

 Manages vendor relations, market visits, and the ongoing education and
development of the organizations’ buying teams
 Helps to ensure consistent quality of coconut oil
 Responsible for the purchase of raw materials and packaging materials (drums,
bottles, and plastics et al)
 Responsible for planning sales, monitoring inventory, selecting the merchandise,
and writing and pricing orders to vendors.
2.1.4 Sales and Marketing Manager
 Manages external research and coordinate all the internal sources of information
to retain the organizations’ best customers and attract new ones
 Models demographic information and analyse the volumes of transactional data
generated by customer purchases
 Identifies, prioritizes, and reaches out to new partners, and business opportunities
et al
 Responsible for supervising implementation, advocate for the customer’s needs,
and communicate with clients
 Develops, executes and evaluates new plans for expanding increase sales
 Documents all customer contact and information
 Represents the company in strategic meetings
 Helps to increase sales and growth for the company

2.1.5 Accountant / Cashier

 Responsible for preparing financial reports, budgets, and financial statements for
the organization

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 Provides managements with financial analyses, development budgets, and

accounting reports; analyses financial feasibility for the most complex proposed
projects; conducts market research to forecast trends and business conditions.
 Responsible for financial forecasting and risks analysis.
 Performs cash management, general ledger accounting, and financial reporting
 Responsible for developing and managing financial systems and policies
 Responsible for administering payrolls
 Ensures compliance with taxation legislation
 Handles all financial transactions for the organization
 Serves as internal auditor for the organization

2.1.6 Client Service Executive

 Ensures that all contacts with customer (e-mail, walk-In centre, SMS or phone)
provides the client with a personalized customer service experience of the highest
level
 Through interaction with customers on the phone, uses every opportunity to build
client’s interest in the company’s products and services
 Manages administrative duties assigned by the store manager in an effective and
timely manner
 Consistently stays abreast of any new company products, promotional campaigns
etc. to ensure accurate and helpful information is supplied to clients when they
make enquiries

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2.1.7 Distribution Truck Drivers

 Assists in loading and unloading coconut oil meant for distribution.
 Maintains a logbook of their driving activities to ensure compliance with federal
regulations governing the rest and work periods for operators.
 Keeps a record of vehicle inspections and make sure the truck is equipped with
safety equipment
 Assists the transport and logistics manager in planning their route according to a
delivery schedule.
 Local-delivery drivers may be required to sell products or services to stores and
businesses on their route, obtain signatures from recipients and collect cash.
 Transport finished goods and raw materials over land to and from manufacturing
plants or retail and distribution centres
 Inspect vehicles for mechanical items and safety issues and perform preventative
maintenance
 Comply with truck driving rules and regulations (size, weight, route designations,
parking, break periods etc.) as well as with company policies and procedures
 Collect and verify delivery instructions.
 Reports defects, accidents or violations.

PROCESSES FOR COCONUT OIL PREPARATION

Ensuring all the above steps are done effectively, processing takes after. Processing
is the fundamental part of the business. The strategy for processing decides the
quality of the final product. The fundamental procedure involved in the generation
of coconut oil is as follows:

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1. Coconuts are fed into the dehusking machine. The machine removes the
entire husk on the coconut. Husk can also be removed manually but you
need more labor to finish this task.
2. Coconuts must be deshelled and this should be managed without breaking
the kernel.
3. The deshelled kernels are passed through paring machine to remove
brown testa/skin of the kernel.
4. Pared kernels or coconuts are plunged in boiling water for a few of
minutes in a blanching tank.
5. The excess water present in the blanched coconuts is drained with the
help of vibratory screener.
6. Pared coconuts are fed into a disintegrator machine where they are cut
into little pieces and will be prepared for extraction.
7. Shredded coconuts are put into a milk extractor, the screw press machine
or hydraulic press machine whichever is installed will extract milk from
coconut. Extracted coconut milk is then filtered to remove if any small
coconut pieces or hard particles are present. The leftover coconut residue
is dried in an oven and packed as dried coconut flour.
8. The extracted milk without any coconut meat or particles is a
homogeneous mixture of coconut oil and water. The coconut milk is
passed through centrifugation machine. After centrifugation, oil and skim
milkareseparated. Coconut oil is isolated from coconut milk.
9. Finally, in the filtration stage, the oil is passed through the filter press and
stored in a tank for packing. Packing can be done in tin containers,

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polymeric nylon barrier pouches or HDPE containers depending on market

demand.

3.0 SWOT ANALYSIS

We are quite aware that there are several coconut oil production companies both large
and small in Nigeria which is why we are following the due process of establishing a
business to compete favourably with them. We know that if a proper SWOT analysis is
conducted for our business, we will be able to position our business to maximize our
strength, leverage on the opportunities that will be available to us, mitigate our risks and
be well equipped to confront our threats. This is the summary of the SWOT analysis
that was conducted for our Coconut Oil Production Company.

3.1 Strength:
Part of what is going to count as positives for INEM Coconut Oil Production Company
is the vast experience of our management team, we have people on board who are highly
experienced and understand how to grow business from the scratch to becoming a
national phenomenon. So also, our large national distribution network and of course our
excellent customer service culture will count as a strong strength for the business.

3.2 Weakness:
A major weakness that may count against us is the fact that we are a new coconut oil
production company and we do not have the financial capacity to engage in the kind of
publicity that we intend giving the business.

3.3 Opportunities:
The opportunities for coconut oil production companies is enormous. This is because
there are loads of beauty and skin care manufacturing companies who rely on the supply
of coconut oil. As a result of that, we were able to conduct a thorough market survey
and feasibility studies to position our business to take advantage of the existing market
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for coconut oil and to create our own new market. We know that it is going to requires
hard work, and we are determined to achieve it.

3.4 Threat:
We are quite aware that just like any other business, one of the major threats that we are
likely going to face is economic downturn and unfavourable government policies. It is
a fact that economic downturn affects purchasing power. Another threat that may likely
confront us is the arrival of a new coconut oil production company in same location
where ours is located.

4.0 FINANCIAL PROJECTION

Sources of Income

Below are the sources of income, we intend to explore to generate income for our
coconut oil company:
 Production of coconut oil
 Sales of coconut oil
 Hair care manufacturing
 Soap manufacturing

4.1 MARKETING PLAN

A marketing plan is a comprehensive document or blueprint that outlines the advertising

and marketing efforts for the coming year. It describes business activities involved in
accomplishing specific marketing objectives within a set time frame.

This involves the following:

 Financial data
 Product data

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 Sales and distribution

 Advertising, sales promotion
 Market data

To develop a good market strategy, the following must be put in place:

 The product
 The cost
 The target markets
 The distribution channels
 Advertisement

4.2 FINANCIAL PROJECTIONS AND COSTING

When it comes to calculating the cost of starting a commercial coconut farm, there are
some key factors that should be noted. The amount to lease/buy acres land in Akwa
Ibom State, the amount to buy production equipment, the amount to pay as salaries to
workers, cost of hiring consultants, cost of advertisement in different radio and
television stations and also how widely accepted our products are.

4.3 START-UP BUDGET AND EXPENDITURE

Starting a standard coconut oil production company is indeed a capital-intensive

business. This is so because the amount required to set – up a coconut oil production
plant is not a piecemeal. The bulk of the start – up capital will be sent on leasing or
acquiring a facility and in purchasing coconut oil extracting and processing machines.
Aside from that, you are not expected to spend much except for purchase and servicing
of distribution trucks, paying of your employees and utility bills. This is the key areas
where we will spend our start – up capital.

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DECSRIPTION AMOUNT
Fee for Registering the Business in 40,000
Nigeria
Legal expenses for obtaining 30,000
licenses and permits as well as the
accounting services (software,
P.O.S machines and other
software)
Marketing promotion expenses for 100,000
the grand opening of the company
Insurance (general liability, 35,000
workers’ compensation, and
property casualty) coverage at a
total premium
Cost for payment of rent for 36 360,000
months
Cost for construction of a standard 400,000
coconut oil production plant
Operational cost for the first 3 250,000
months (salaries of employees,
payments of bills et al)
The cost for Start-up inventory 170,000
(raw materials, drums, bottles, and
packaging materials et al)
Cost for coconut oil extracting and 90,000
packaging equipment

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Cost for store equipment (cash 20,000

register, signage)
Cost of purchase of distribution 600,000
van
The cost of Launching a Website 60,000
Miscellaneous 20,000

We would need an estimate of N2,175,000 to successfully set up a standard and world

class coconut oil production plant in Uyo – Nigeria. Please note that this amount
includes the salaries of all the staff for the first 3 month of operation.

5.0 PRODUCTION SUMMARY

5.1 Production plan:

In our coconut farm, we are planning to keep large quantities of coconut oil produce for
sale. For every 6 months, about 100 barrels of oil will be sold. Our production target is
to reduce cost of production by at least 20% in the next 3 years.
5.2 Production costs:
Our fixed costs include
 Insurance payments covering both general liability and product liability,
 Rented facility for about a year and a half.
 A house will be erected for the storage of the coconut produce.
 Materials for office and store furniture, shelving, a computer, phone system, and
tools.
 Long-term assets including the refrigerator unit for the shop, window displays
and a delivery van.
Raw materials used include
 Coconut
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6.0 MARKET ANALYSIS SUMMARY

6.1 Market segmentation:
The trend in the coconut oil industry is such that, any product that has been proven to
be reliable and healthy tends to sell our wildfire. Coconut oil has been proven to be one
of the most reliable ingredients in the manufacturing of soaps, skin products, hair
products and repellents.
Lastly, another trend in the coconut oil production industry is that in other to maximize
profits in the industry, some coconut oil production companies with financial capacity
go all the way to establish soap, skin products, hair products and repellents
manufacturing company. With this, there will be direct supply of coconut oil, thereby
cutting production cost and increasing profits especially if the coconut oil production
plant and the beauty and skin care manufacturing plant are all in same location.

Market Segmentation

3%
7%0% Hotels and restaurants

13% 32% Bakeries and food joints

Retail shops
Homes
19% Individuals

26% Others

6.2 Target market segment strategy:

When it comes to selling coconut oil, there is indeed a wide range of available
customers. Our target market cannot be restricted to just a group of people or

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organization, but all those who resides in our target market locations. In view of that,
we have conducted our market research and we have ideas of what our target market
would be expecting from us. We are in business to engage in the production and
wholesale distribution of coconut oil to the following groups of organizations.
 Soap manufacturing companies
 Hair care manufacturing companies
 Skin care manufacturing companies
 Repellent manufacturing companies
 Every manufacturing organizations in our target market location that make use of
coconut oil as part of their raw ingredients.

6.4 Competition
A close study of the coconut oil production industry reveals that the market is becoming
much more competitive over the last decade. As a matter of fact, you must be highly
creative, customer centric and proactive if you must survive in this industry. We are
aware of the stiffer competition and we are well prepared to compete favourably with
other coconut oil production companies in Uyo – Nigeria and worldwide. INEM
Coconut Oil Production Company is launching a standard coconut oil production brand
that will indeed become the preferred choice for manufacturing organizations that are
into the production of beauty and skin care products in Uyo – Nigeria and globally.

6.6 Marketing strategy

Before choosing a location for INEM Coconut Oil Production Company we conduct a
thorough market survey and feasibility studies for us to be able to penetrate the available
market in our target market locations. We have detailed information and data that we
were able to utilize to structure our business to attract the numbers of customers we want
to attract per time and for our coconut oil to favourable compete with other leading
brands in the United States of America and Canada. We hired experts who have good

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understanding of the coconut oil production industry to help us develop marketing

strategies that will help us achieve our business goal of winning a larger percentage of
the available market in Lagos, Abuja, Uyo and other cities Nigeria. In other to continue
to be in business and grow, we must continue to sell our coconut oil to the available
market which is why we will go all out to empower or sales and marketing team to
deliver our corporate sales goals. In summary, INEM Coconut Oil Production Company
will adopt the following sales and marketing approach to sell our coconut oil:
 Introduce our coconut oil brand by sending introductory letters to beauty and skin
care manufacturing companies, coconut oil merchants and other stakeholders in
Lagos, Abuja, Uyo and other cities Nigeria.
 Open our coconut oil production company with a promo to capture the attention
of residence who are our first targets.
 Engage in road show in targeted communities from time to time to sell our
products
 Advertise our products in community-based newspapers, local TV, and radio
stations
 List our business and products on yellow pages ads (local directories) Leverage
on the internet to promote our coconut oil brands Engage in direct marketing and
sales
 Encourage the use of Word of mouth marketing (referrals)

6.7 Payment Options

The payment policy adopted by INEM Coconut Oil Production Company is all inclusive
because we are quite aware that different customers prefer different payment options as
it suits them but at the same time, we will ensure that we abide by the financial rules
and regulations in Nigeria. Here are the payment options that INEM Coconut Oil
Production Company will make available to her clients,
 Payment via bank transfer

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 Payment with cash

 Payment via online bank transfer
 Payment via check Payment via bank draft
 Payment via PayPal

7.0 Cash Flow Forecast

Expenditure from operations

Yr1 Yr2 Yr3
N N N
Cash spending 2,000,000 1,700,000 900,000
Bill payment 175,000 90,000 90,000
Subtotal 2,175,000 1,790,000 990,000

7.1 Projected Sales for Three (3) Years

YEAR 1 YEAR 2 YEAR 3
N3,100,000.00 N4,700,000.00 N6,000,000.00

7.2 Net Profit for Three (3) Years

YEAR 1 YEAR 2 YEAR 3
N1,000,000.00 N2,500,000.00 N4,000,000.00

8.0 SUSTAINABILITY AND EXPANSION STRATEGY

One of our major goals of starting our coconut oil Ventures is to build a business that
will survive off its own cash flow without the need for injecting finance from external
sources once the business is officially running. We know that one of the ways of
gaining approval and winning customers over is to retail our products a little bit
cheaper than what is obtainable in the market and we are well prepared to survive on
lower profit margin for a while.

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We will make sure that the right foundation, structures, and processes are put in place
to ensure that our staff welfare are well taken of. Our company’s corporate culture is
designed to drive our business to greater heights and training and retraining of our
workforce is at the top burner.

We know that if that is put in place, we will be able to successfully hire and retain the
best hands we can get in the industry; they will be more committed to help us build the
business of our dreams.

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