Castor Oil Production in Nigeria; The Feasibility Report.

Castor (Ricinus communis L.) is cultivated around the world because of the commercial importance of its oil. Castor oil, produced from castor beans, has long been considered to be of important commercial value primarily for the manufacturing of soaps, lubricants, and coatings, among others.

Castor oil has long been used commercially as a highly renewable resource for the chemical industry. It is a vegetable oil obtained by pressing the seeds of the castor oil plant (Ricinus communis L.) that is mainly cultivated in Africa, South America, and India. Major castor oil-producing countries include Brazil, China, and India.

This oil is known to have been domesticated in Eastern Africa and was introduced to China from India approximately 1,400 years ago. India is a net exporter of castor oil, accounting for over 90% of castor oil exports, while the United States, European Union, and China are the major importers, accounting for 84% of imported castor oil.

Castor is one of the oldest cultivated crops; however, it contributes to only 0.15% of the vegetable oil produced in the world. The oil produced from this crop is considered to be of importance to the global specialty chemical industry because it is the only commercial source of a hydroxylated fatty acid.

Even though castor oil accounts for only 0.15% of the world production of vegetable oils, worldwide consumption of this commodity has increased more than 50% during the past 25 years, rising from approximately 400,000 tons in 1985 to 610,000 tons in 2010. On average, worldwide consumption of castor oil increased at a rate of 7.32 thousand tons per year.

In general, the current rate of castor oil production is not considered sufficient to meet the anticipated increase in demand.

Nigeria imports over N30 billion worth of castor oil every year despite having arable and fertile land, and climatic conditions suitable for its farming.

This report examines the financial viability of establishing a castor oil processing plant in Nigeria.

The production capacity of the proposed plant is four (4) tons per day and would operate a double shift of eight (8) hours each at 80% of installed capacity for three hundred (300) working day producing about one hundred and sixty (160) tons of castor oil bi-monthly.

Table of Contents

EXECUTIVE SUMMARY 1.0 Business Overview 1.1 Description of the Business 1.2 Vision and Mission Statement 1.3 Business Objective 1.4 Critical Success Factor of the Business 1.5 Current Status of Business 1.6 Description of the Business Industry 1.7 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of products 2.2 Product Packaging and delivery 2.3 The Opportunity 2.4 Pricing Strategy 2.5 Target Market 2.6 Distribution and Delivery Strategy 2.7 Promotional Strategy 2.8 Competition 3. Production Plan 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Equipment 3.4 Production Process 3.5 Production Cost 3.6 Stock Control Process 3.7 Pre-Operating activities and expenses 3.7.1 Operating Activities and Expenses 3.8 Project Implementation Schedule 4.0 Organizational and Management Plan 4.1 Ownership of the business 4.2 Profile of the promoters 4.3 Key Management Staff 4.3.2 Management Support Units 4.4 Details of salary schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Startup Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Profit and Loss Statement 5.7 Cash flow Statement 5.8 Viability Analysis 6.0 Business Risk and mitigation factor 6.1 Business Risks 6.2 SWOT Analysis

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