Shea Butter Production In Nigeria; The Feasibility Report

Until the late 1970’s when hydrocarbon was discovered in commercial quantity in Oloibiri, present day Bayelsa state, Agriculture remained the mainstay of the economy contributing over 90% of the Gross Domestic Product (GDP) of the country as against the less than 40% it now contributes with crop production accounting for an estimated 85%, livestock 10% and the balance made up by fisheries and forestry.

Any nation that requires economic development must look inwards to identify areas where it has comparative advantage over other nations and seek to develop the identified areas.

Apart from hydrocarbon, Nigeria has comparative in the Agricultural sector where a variety of products are produced due to the favorable climatic condition ,good soil condition and the fact that over 70% of the entire land mass of the country is arable.

Nigeria has comparative advantage in the cultivation, processing and export of crude Shea butter in Africa over her counterparts due to the large arable land available for production and the conducive climatic condition.

Presently Nigeria is the leading exporter of Shea nuts and butter in the world with a total trade value estimated at $400,000.

Shea butter is a slightly yellowish or ivory colored natural fat extracted from the seed of the African shea tree by crushing and boiling. It is widely used in cosmetics as a moisturizer and salve. Shea nuts are primarily grown in West and Central Africa in the semi-arid Sahel, referred to by traders as the “Shea Belt”.
Shea nut butter extraction involves procurement of dried nuts from suppliers. The nuts are fed into the machine to remove the fats. The fats are then collected and stored in appropriate containers. The cake is also packed in bags ready for sale to the feed millers.

The production capacity of the proposed plant is ten {10} tons per day and it would operate at 75% of the installed capacity operating double shift of nine {9} hours each and processing 7.5 tons of shea nut per day.

Nigeria, currently exports about 50,000 tons of shea butter annually, is believed to account for almost 60 per cent of the world’s supply of shea butter and allied derivatives valued at about $3.8 billion every year.

Government’s quest to diversify the country’s revenue earning sources from crude oil exports would be realized if it is able to claw back losses estimated at about $2.166 billion (about N340.6 billion) annually through smuggling of Shea butter across Nigeria’s borders.

The Shea butter industry in Nigeria is dominated by small scale with production capacity of less than 0.1 tons per day. The production plants are usually found in south western part of Nigeria, where there is a large market for the product.

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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