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

 

  1. Production is assumed for 312 days per year.
  2. Depreciation assumes 4-year life of assets written off at 25% per year for all assets.
  3. 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.