Instant Noodles Production in Nigeria; The Feasibility Report

In the fast-paced world we live in today, convenience often takes precedence over tradition in our daily lives. One culinary innovation that epitomizes this convenience is the ubiquitous instant noodle. Instant noodles have evolved from humble beginnings into a global phenomenon, revolutionizing the way people eat and perceive food.

The story of instant noodles begins in post-World War II Japan, a country grappling with food shortages and a devastated economy. It was here that Momofuku Ando, an inventor and entrepreneur, took the first steps towards creating a convenient and affordable food solution.

In 1958, Momofuku Ando introduced the world to the first commercially successful instant noodle product, known as “Chikin Ramen” in Japan. Ando’s invention was a result of extensive experimentation with various methods of dehydrating noodles, ultimately leading to the revolutionary flash-frying technique. This technique involved cooking the noodles and then rapidly dehydrating them by frying in hot oil, resulting in a product that could be rehydrated quickly by adding hot water.

In the 1970s, Momofuku Ando unveiled another game-changer in the world of instant noodles: Cup Noodles. This innovation eliminated the need for a separate container and allowed consumers to enjoy a hot meal with utmost convenience. The noodles came in a foam cup, and all that was required was the addition of hot water.

Instant noodles are made with fine wheat flour and a combination of alkaline salts. Various additional ingredients are also added to the dough in smaller quantities such as starch, edible oil, gluten, and stabilizers like guar gum. Instant noodles are dried noodles that have been dehydrated in one of two ways: flash frying or air frying.

They are typically served with a small sachet and have grown in popularity due to their portability, ease of preparation, and storage. Instant noodles are ready-to-cook noodles that come in a variety of flavors and fillings, as well as healthy ingredients like dehydrated vegetables, wheat flour, meat, pork, beef, and seafood. They are either available in cups/bowls or packets.

Instant noodles come in different flavors, as well as vegetarian and non-vegetarian options. Moreover, the manufacturers keep formulating new flavors, colors, textures and seasonings/tastemakers, according to regional tastes and preferences, in order to expand their consumer base.

Particularly among customers leading busy and hectic lives, there is an increasing need for easy food products that are simple to prepare and consume. The increased demand for quick-to-prepare foods like instant noodles is fueled by increasing urbanization, a growing middle class, and an increase in working women.

Instant noodle’s quick preparation time, microwave heating, and inventive packaging methods are some of the elements contributing to their rising appeal among the working-class population.

The eating habits of consumers have changed as a result of growing urbanization and rising disposable incomes. Due to their busy lifestyles, the working populace now favors quick, inexpensive meals like instant ramen that require little preparation.

The demand for instant noodles has greatly benefited from this increase in their eating habits. To expand their consumer base and take into account regional tastes and preferences, producers also keep coming up with new flavors, colors, textures, and seasonings.

The global instant noodles market size was valued at USD 47.32 Billion in 2022 and is projected to reach USD 70.80 Billion by 2030, growing at a compound annual growth rate (CAGR) of three point ninety-nine percent (3.99%) from 2023 to 2030.

Nigeria has been rated one of the largest markets for noodles consumption globally. The World Instant Noodles Association (WINA), in its latest report, ranked Nigeria 11th in the global demand for noodles, putting Nigeria among the largest consumers of instant noodles.

The country consumed over two billion, seven hundred and ninety million (2,790,000,000) serving of instant noodles in 2022 growing at about six percent (6%) per annum.

The meal of instant noodles was scarcely popular in Nigeria until a few years back when it was introduced. By then, the seventy (70) gram pack sold for just two naira fifty kobo (₦ 2.50) but now it retails for between one hundred and fifty naira to four hundred and fifty naira (₦ 150 and ₦ 450) per pack depending on the size.

Several key factors have contributed to the remarkable growth of the instant noodle market in Nigeria:

a. Demographic Trends: Nigeria’s large and youthful population has been a significant driver of demand for instant noodles.

The country’s demographic composition, with a significant proportion of the population being young people, aligns well with the quick and easy meal option that instant noodles provide.

b. Urbanization: Nigeria has experienced rapid urbanization, with more people moving to cities in search of better economic opportunities. This urban lifestyle often demands convenient and time-saving meal options, making instant noodles a popular choice.

c. Busy Lifestyles: The demands of modern life, including long working hours and hectic schedules, have led to a preference for quick and hassle-free meals. Instant noodles fit this bill perfectly, requiring minimal preparation time.

d. Affordability: Instant noodles are generally affordable, making them accessible to a wide range of consumers, including those with limited disposable income.

e. Customization: Noodle manufacturers in Nigeria have adapted their products to cater to local tastes. Flavor profiles have been adjusted to suit Nigerian palates, leading to increased consumer acceptance.

There are about seventeen (17) players in noodle manufacturing with more than thirty thousand (30,000) people directly employed in the industry and more than two hundred thousand (200,000) distributors employed.

The production capacity of the proposed plant is one (1) unit of one hundred and fifty thousand (150,000) pieces per eight (8) hours for the one hundred to one hundred and twenty (100 -120) grams size, one (1) unit of one hundred and sixty thousand (160,000) pieces per eight (8) hours for the seventy (70) grams size, one (1) unit of 6T automatic feeding system steam boiler, three (3) units of packaging machines and two (2) units carton sealing machines.

Table of Contents

EXECUTIVE SUMMARY 1. Business Overview 1.1 Description of the Business 1.2 Vision and Mission Statement 1.3 Business Objective 1.4 Value Proposition 1.5 Critical Success Factor of the Business 1.6 Current Status of Business 1.7 Description of the Business Industry 1.8 Contribution to Local and National Economy 2. Marketing Plan 2.1 Description of product 2.2 Location 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. Technical Analysis 3.1 Description of the Location 3.2 Raw Materials 3.3 Production Technology / 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 4.3.1 Strategic Business Units 4.3.2    Management Support Units 4.4 Details of salary schedule 5. Financial Plan 5.1 Financial Assumption 5.2 Start- up Capital Estimation 5.3 Source of Capital 5.4 Security of Loan 5.5 Loan Repayment Plan 5.6 Financial Projections 6.0 Business Risk and Mitigation Factor 6.1 Business Risks 6.2 SWOT Analysis

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