Introduction
The business idea is for the production and marketing of mayonnaise cream. Mayonnaise is a thick, creamy sauce or dressing that is
made of oil, egg yolks, lemon juice or vinegar and seasonings. The total potential revenue is estimated at NGN 37,440,000 per year, the
production capacity is estimated at 200 containers per day and the total investment cost is estimated at NGN 1,472, 900. The net profit is 26% while the payback period is 1 month.
Production process
A method of producing mayonnaise comprises directing coagulated egg yolk and milk protein into a container in which they are mixed
together and adding salt and a small amount of oil and colorants.
The mixture is then directed through a dosing pump to a first heater in which the mixture is briefly heated to a temperature in the range
of about 80°C-100°C.
The emulsion is then stirred with vinegar and other additives to form mayonnaise. The mayonnaise is pasteurized by heating it
briefly in a second heater to about 80°C-100°C or it is sterilized by heating it to a higher temperature of 110°C- 130°C.
Thereafter, the pasteurized mayonnaise is cooled in a second cooler and it is continuously filled into sterilized containers.
Capital Investment Requirements (CBN exchange rate -$1 to 415.58 NGN) as of 22nd April 2022.
| Capital investment item | Units | Qty | Cost in
NGN |
Cost in USD |
| Dynamic mixer | No. | 1 | 4700 | 11.309 |
| Heater | No. | 2 | 8600 | 20.694 |
| Cooler | No. | 2 | 5000 | 12.031 |
| Packaging | No. | 200 | 34,000 | 81.813 |
| Total cost of machinery | 52,300 | 125.848 |
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 |
| Oil | litres | 16,000 | 10 | 416,000 | 4,992,000 | 12,012.128 |
| Vinegar | litres | 4,000 | 5 | 104,000 | 1,248,000 | 3,003.032 |
| Milk proteins | kgs | 10,000 | 12 | 260,000 | 3,120,000 | 7,507.579 |
| salt | kgs | 100 | 2 | 2600 | 31,200 | 75.076 |
| eggs | trays | 24,000 | 20 | 624,000 | 7,488,000 | 18,018.191 |
| Sub-total | 1,406,600 | 16,879,200 | 40,616.007 |
General costs (overheads)
| Cost Per Month
NGN |
Cost Per Year
NGN |
Cost Per Year
USD |
|
| Utilities(water and power) | 2000 | 24,000 | 57.751 |
| Labour | 5000 | 60,000 | 144.377 |
| Rent | 2000 | 24,000 | 57.751 |
| Distribution costs | 5000 | 60,000 | 144.377 |
| Sub –total | 14000 | 168,000 | 404.254 |
| Total Operating Costs | 1,420,600 | 17,047,200 | 41,020.261 |
- Production costs assumed 312 days per year with a daily capacity of 200 tins of mayonnaise
- Depreciation (fixed assets write-off) assumes 4 years life of assets written off at 25% per year.
- 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 |
| Mayonnaise | 200 | 62,400 | 600 | 17,047,200 | 41,020.261 | 37,440,000 | 90,090.957 |
Profitability Analysis
| Profitability Item | Per day | Per month | Per Year
NGN |
Per Year
USD |
| Revenue | 120,000 | 3,120,000 | 37,440,000 | 90,090.957 |
| Less production and operating Costs | 54,100 | 1,420,600 | 17,047,200 | 41,020.261 |
| Profit | 65,900 | 1,699,400 | 20,392,800 | 49,070.696 |
Market Analysis
Mayonnaise is commonly served with sandwiches and with salads.
Therefore, the product has a high demand. It is supplied to supermarkets, shops, hotels, and restaurants as major outlets.
Sources of raw materials
Raw materials are locally available in shops and markets.
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