Introduction
This business idea is for the production and marketing of edible cashew nuts, the business idea is premised on the production of 5,200 kgs of cashew nuts per month, which translates into 62,400 per year. The revenue potential is estimated at NGN 2,354,000 per month, translating into NGN 62,400,000 per year.
The project cost is NGN 28,248,000 with a net profit of 28% and a payback period of 3 years and 5 months.
Production Process
In the mechanized system, the raw cashew nuts are decorticated using a hand-operated machine, mounted on a work table. The
decorticator splits the nut when placed between two horizontally mounted blades, especially spread to suit the contour of the raw nut. The outer shell is conveniently split by the sliding and splitting action of blades. An operator can process 25-30 kg of nuts per day.
Production Capacity
The plant can have a capacity of 9000 kgs per year
Capital Investment Requirements (CBN exchange rate -$1 to 415.75 NGN) as of 1st April 2022.
| Capital investment item | Units | Qty | Cost in
NGN |
Cost in USD |
| Cashew Decorticator | No. | 1 | 350,000 | 841.852 |
| Packing bags | No. | 300 | 15,000 | 36,079 |
| The total cost of machinery | 365,000 | 877.931 |
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 |
| Cashew nuts | kgs | 450 | 300 | 2,340,000 | 28,080,000 | 67,540.589 |
| Sub-total | 2,340,000 | 28,080,000 | 67,540.589 |
General costs (overheads)
| Cost Per Month
NGN |
Cost Per Year
NGN |
Cost Per Year
USD |
|
| Utilities(water and power) | 2000 | 24,000 | 57.727 |
| Labour | 5000 | 60,000 | 144.318 |
| Rent | 2000 | 24,000 | 57.727 |
| Distribution costs | 5000 | 60,000 | 144.318 |
| Sub –total | 14000 | 168,000 | 404.088 |
| Total Operating Costs | 2,354,000 | 28,248,000 | 67,944.6783 |
- Production costs assumed 312 days per year with a daily capacity of 200 kgs of cashew nuts.
- Depreciation (fixed assets write-off) assumes 4 years life of assets write-off of 25% per year for all assets.
- Direct costs include materials, supplies, and other costs that directly go into the production of the product.
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 |
| Cashew nuts | 200 | 62,400 | 1,000 | 28,248,000 | 67,944.6783 | 62,400,000 | 150,090.198 |
Profitability Analysis
| Profitability Item | Per day | Per month | Per Year
NGN |
Per Year
USD |
| Revenue | 200,000 | 5,200,000 | 62,400,000 | 150,090.198 |
| Less production and operating Costs | 90,000 | 2,354,000 | 28,248,000 | 67,944.6783 |
| Profit | 110,000 | 2,846,000 | 34,152,000 | 82,145.5201 |
Market
Cashew nuts are highly demanded on the world market. A small local market also exists although cashew nuts are not very common in some African Countries. This could turn out to be the turning factor in the marketing of cashew nuts as they have an open market, with limited competition.
