Pet Preform, Bottle and Cap Production in Nigeria; The Feasibility Report.

Plastic have played a vital role in the growth phase of the Nigerian economy and continue to do so. From packaging to agriculture, automobiles and electronics plastics have revolutionized all areas because of its functionality, economics, aesthetics and reliability.

Plastic packaging has become indispensable to the world. A global trend has emerged to produce hi-tech, sophisticated and eye-catching plastic packaging. PET (polyethylene terephthalate) has recorded the fastest growth rate in the global plastics market and this is evident from the revolution witnessed in the fields of mineral water, beverages, edible oil, detergents etc.

PET excels by its inherent values like strength, safety, cost-effectiveness and being lightweight, unbreakable and recyclable. Today, the food and beverages industry is increasingly using PET to replace glass and other materials.

PET (polyethylene terephthalate) is a packaging medium for a wide variety of liquid food products such as edible oils, syrups, mineral water, alcoholic beverages, juices and honey. It has now been adopted for storing all types of foods.

Mineral water and soft drinks account for a major share of the total demand. Others include processed foods, edible oils and sauces. Kitchen containers are another major usage centre.

The Nigerian food and beverage industry is expected continue to experience growth amid uncertainties in the economy.

The growth drivers in the food and beverage industry are the growth in the population, 170 million by some estimates, and the rise in income levels over the last 10 years, improvement in marketing strategies implored by the bottlers, better distribution channels, introduction of new products and better packaging.

The carbonated soft drink industry in Nigeria is dominated by the world’s biggest soft drink manufacturers, Coca Cola with its Fanta, Sprite, and Schweppes brands and PepsiCo, with its Pepsi and Miranda brand.

In the last ten (10) years, new competitor has emerged in this sector. La Casera is experiencing unprecedented growth because it is a non-cola carbonate soft drink and has a popular Apple flavour variant that appeals to Nigerian consumers. Other new entrant are rite foods Nigeria Limited (Bigi Brand).

Bottled Water Industry has seen growth of over thirty-one percent (31%) volume in the last ten (10) years. The market is segmented into large multi-nationals, large corporate firms and hundreds, if not thousands of small and medium size enterprises (SMEs).

Analysts (BMI) expect the growth to reach 8.5 litres per capita in 2016. At that rate, it is expected that the sale of bottled water will overtake carbonates as the most widely consumed beverage by volume.

Growth drivers for the bottled water industry are the hot weather, growing population and health considerations. We anticipate the sector will become more segmented as competition grows and consumers preferences and taste evolve.

The above data suggest a large, expending and sustainable market for PET preform and bottles in Nigeria.

The market for PET preform and bottles is national. With a population of over one hundred and seventy (170,000,000) million people and an estimated national population growth rate of 5.7% per annum, an average economic growth rate of 3.5% per annum in the past five (5) years, Nigeria has a large market for PET preform and bottles.
Our research indicates that the main driver of growth for PET bottles in Nigeria has been the food and beverage sector with water industry accounting for about sixty-five percent (65%) of PET usage in Nigeria.

The demand for PET plastics is estimated to rise at about seven percent (7%) annually over the next ten (10) years. With the growing demand for carbonated soft drinks, water and edible oil, PET Preform bottles are also increasing in demand.

This report is to examine the financial viability or otherwise of establishing a PET (polyethylene terephthalate) preform plant in Nigeria using PET (polyethylene terephthalate) resins as raw materials. The plant would also include a PET blowing machine and CAP making machine using PP resins as the raw materials.

Table of Contents

EXECUTIVE SUMMARY 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 Marketing Plan 2.1 Description of product 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 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 Milestones 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 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 Profit and Loss Analysis 5.7 Cashflow Analysis 5.8 Viability Analysis Business Risk and mitigation factor 6.1 Business Risks 6.2 SWOT Analysis

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