Posted 8:01 PM by Luigi
Cassava processing in Nigeria

Not really about the Pacific, but I thought this might be of interest to some in our region. Posted to the web January 31, 2005 by Mr Godwin Uba of Global Trust Consulting Group 56, Ishaga Road (1st floor) Surulere, Lagos, Nigeria.

Setting up an integrated cassava processing project

There are great investment opportunities in setting up cassava processing plant. Internally, the market for processed cassava into chips & pellets, flour, ethanol and industrial starch expands everyday.

Internationally, the export market of processed cassava products particularly chips/pellets & industrial starch (dry) become more acceptable, creating more opportunities for Nigerians to go into cassava processing for export business.

Favourable economic policies

Recently, the federal government under president Olusegun Obasanjo has made it compulsory that wheat flour produced and sold within Nigeria must posses 10% cassava flour.

This new law has created a better opportunities for Nigerians to now think how to create more processing plants out of this policy.

Research has earlier shown that wheat flour containing 10% cassava flour still produces good quality bread and confectioneries.

Based on this new law also it is the general expectation that the industrial demand for cassava products will increase locally.

Nigerians should embrace this new policy because this is what is obtained in most parts the third world countries where the law of comparative advantages are more recognised and adopted.

For instance, in Malaysia, cassava flour has 100% application and yet the country produces good quality bakery products.

The same thing applies in Brazil and Madagascar.

In these countries, cassava are processed into industrial flour without adding any wheat, yet quality products are obtained.

Nigeria is a country blessed with abundant agricultural resources. Cassava is every where environment within Nigeria. Therefore this natural endowment should be fully exploited.

Export market exploitation

Apart from producing cassava flour for local market, prospective investors can consider going into production of cassava chips & pellets and industrial starch (dry) for export market.

Nigeria has all it takes to produce quality exportable chips & pellets and industrial starch (dry). At the moment the international prices of industrial starch and chips & pellets are relatively high.

The good thing president Obasanjo's administration has done to Nigeria is that the country's agricultural products have been well accepted internationally.

Many overseas countries in Europe, America and Asia want to do business with Nigerians in the area of cassava chips/pellets, industrial starch (dry) and other agricultural products.

For detailed information on the countries that purchase industrial starch, cassava chips & pellets in bulk, and some of other agro-industrial processed products, please contact the writer.

Integrating feed mill into the project

There are so many poultry farmers and other animal husbandry in Nigeria. The number is growing everyday with the ban on importation of frozen chicken & turkey.

The ban has created more investment opportunities to Nigerians in the area of raising chickens, turkey and other animals in commercial quantities.

The increase in farmers of this category has also made the business of feed mill a very lucrative one. The price of feed mill in recent time has been very competitive in the market.

Therefore anybody that wants to exploit the opportunity of investing into lucrative cassava processing project must also think of how to reduce or eliminate the envisaged accumulated wastes.

The environmental friendliness of any project is very important and must be considered when setting up any project in the country and any part of the world.

When a feed mill is integrated into the proposed cassava-processing project, the issue of waste elimination is taken care of.

Moreover, the investor stands a better chance of selling the produced animal feeds to teeming buyers of poultry and animal feeds at large.

Income is made from this project as well through the sale of produced feeds. The investor also can easily integrate poultry farming into the entire project, because the major inputs in poultry farming army have been taken care of.

It is quite indisputable that the highest cost element as well as the greated inputs in animal husbandry is the animal feeds.

Plants & machinery for these projects

The machines and equipment for the setting up of this project can be sourced from both local and international producers.

There are few hands in Nigeria who can produce some of the required processing machines and equipments.

To ensure that quality machines are procured there are foreign machine producers that will be recommended to prospective investors.

Marketing of envisaged product

There is good market for the products within the local and foreign markets. The buyers ranges from Europe, America and Africa.

Financial implications

The cost of this project depends on the scale and the type of products that prospective investors will like to go into.

For the four major products chips/pellets, Industrial starch, ethanol and flour the projected cost shown below.

The payback period is within two years for each of the products. The payback period may even come down if the products are to be exported.

The return on investment is over 60% and will increase as production and marketing increases.

The cost-benefit ratio is very high.

Implementation

The implementation will commence with detailed, comprehensive and bankable feasibility studies to be presented to prospective investors by the writer.

This will be followed by planning of the proposed project site; followed by procurement and installation of production machinery and equipment.

The next step will be organising the marketing and administrative structure.

Funding the project

The Federal Government of Nigeria, under the president Olusegun Obasanjo, is encouraging this project.

The Government has encouraged financial institutions in the country to ensure that prospective investors can benefit from the funds channelled to the Industrial and Agricultural Development Banks and Institutions.

Banks too can now fund this project through the SME funding scheme whereby 10% off the gross profits are channelled to funding of agro & allied industrial projects.