Grains are agricultural products that have a very high demand in the country. They usually include Simsim, groundnuts, soybeans, maize, popcorn, and cowpeas.
The project idea is based on adding value by packaging good quality grains and selling them at relatively low prices. The project expects to package 72,000 kgs of assorted grains per annum. Initial investment costs are estimated at NGN 45,448,400 generating revenue of NGN 50,013,60 at a net profit margin of 43% and a payback period of approximately 2 years.
Capital Investment Requirements (CBN exchange rate -$1 to 415.22 NGN) as of 27th May 2022.
| Capital investment item | Units | Qty | Cost in
NGN |
Cost in USD |
| Packing machine | No. | 1 | 16,000 | 38.533 |
| Dust woofers | No. | 1 | 3,000 | 7.22 |
| Weighing scale | No. | 1 | 2,500 | 6.021 |
| Total cost of machinery | 21,500 | 51.779 |
Production and operating costs
| Cost Item | Units | @
NGN |
Qty/
day |
Pdn cost/ month in NGN | Pdn cost/ year
In NGN |
Pdn cost/ year
In USD |
| Groudnut | Kgs | 40,000 | 71 | 1,040,000 | 27,040,000 | 65,122.104 |
| Soy beans | Kgs | 20,000 | 32 | 520,000 | 6,240,000 | 15,028.1778 |
| popcorn | Kgs | 9,000 | 64 | 234,000 | 2,808,000 | 6,762.680 |
| Cow peas | Kgs | 20,000 | 64 | 520,000 | 6,240,000 | 15,028.1778 |
| Packaging material | Pcs | 10,000 | 300 | 260,000 | 3,120,000 | 7,514.088 |
| Sub-total | 99,000 | 45,448,400 | 109,456.192 |
General costs (overheads)
| Cost Per Month
NGN |
Cost Per Year
NGN |
Cost Per Year
USD |
|
| Utilities(water and power) | 2000 | 24,000 | 57.801 |
| Labour | 5000 | 60,000 | 144.502 |
| Rent | 2000 | 24,000 | 57.801 |
| Distribution costs | 5000 | 60,000 | 144.502 |
| Sub –total | 14000 | 168,000 | 404.605 |
| Total Operating Costs |
- Production is assumed for 312 days per year.
- Depreciation assumes 4-year life of assets written off at 25% per year for all assets.
- A production Month is assumed to have 26 days.
Project product costs and Price structure
| Item | Qty /day | Qty/yr | @ | Pdn cost /yr
NGN |
Pdn cost /yr
USD |
TR
In NGN |
TR
In USD |
| Groudnut | 71 | 22,152 | 500 | 35,000 | 11,076,000 | 26,675.016 | |
| Soy beans | 32 | 9,984 | 500 | 16,000 | 4,992,000 | 12,022.542 | |
| Popcorn | 64 | 19,968 | 700 | 44,000 | 13,977,600 | 33,663.118 | |
| Cow peas | 64 | 19,968 | 1,000 | 64,000 | 19,968,000 | 48,090.169 | |
| Total | 45,448,400 | 109,456.192 | 50,013,600 | 120,450.845 |
Profitability Analysis
| Profitability Item | Per day | Per month | Per Year
NGN |
Per Year
USD |
| Revenue | 159,000 | 4,134,000 | 50,013,600 | 120,450.845 |
| Less production and operating Costs | 99,000 | 2,574,000 | 45,448,400 | 109,456.192 |
| Profit | 60,000 | 1,560,000 | 4,565,200 | 10,994.653 |
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Market Analysis
The market for grains readily exists and their demand continues to grow mainly across borders.
Risk
The business risk involved is price fluctuation, which may affect the targeted profits. However, this can be minimized by setting up buffer stocks in times of low prices and resell later when they are high.
