Sorghum Malt Production in Nigeria; The Feasibility Report.

Sorghum (Sorghum bicolor (L.) Moench) is a cultivated tropical cereal grass. It is generally, although not universally, considered to have first been domesticated in North Africa, possibly in the Nile or Ethiopian regions as recently as 1000 BC1. The cultivation of sorghum played a crucial role in the spread of the Bantu (black) group of people across sub-Saharan Africa.

Today, sorghum is cultivated across the world in the warmer climatic areas. It is quantitatively the world’s fifth largest most important cereal grain, after wheat, maize, rice and barley. In Africa, sorghum is still largely a subsistence food crop, but as report will show it is increasingly forming the foundation of successful food and beverage industries in Nigeria.

Nigeria is the second largest producer of sorghum, with the majority of domestic production used for household consumption/fodder. Sorghum is produced in virtually all the states in Nigeria, though some states produce more than others.

Some of states that sorghum in large quantity in Nigeria includes Plateau, Kano, Kaduna, Sokoto, Gombe, Bauchi, Zamfara, Benue, Kogi, Nassarawa and Taraba. The raw materials are also readily available.

Sorghum is increasingly being used as a substitute for more expensive and imported raw materials. A major portion of sorghum grain currently utilized by Nigeria industries (approximately 200,000 MT) is used by the larger beer sector, followed by the non-alcoholic malt beverage sector. Currently, several brands of larger beer with major sorghum content are being marketed.

Historically, malt drink was used as food for children and the sick, but has since become a mainstream beverage consumed by people of all ages. More importantly, malt-based drinks have developed a reputation over the centuries for their nutritional value, a message that is attractive for manufacturers to carry across in today’s climate of increasing health awareness.

There are more than twenty (20) breweries operating in Nigeria with an annual production capacity close to 20 million hectoliters.

The use of sorghum malt was encouraged by a ban on imported barley malt and an economic recession, resulting in a substantial reduction in the sales and production of barley based beer.

This report examines the financial viability of establishing a sorghum malt processing plant in Nigeria.

The production capacity of the proposed plant is six (6) tons per day and would operate a shift of eight (8) hours each at 80% of installed capacity for 300 working day producing about four point eight (4.8) tons of sorghum malt per day with malting loss at fifteen (15) %.

The plant would come with one hundred (100) MT capacity steel cone base bottom silo, for the storage and preservation of the raw material and finished product.

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 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 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 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 Cash flow Analysis 5.8 Viability Analysis 6.0 Business Risk and mitigation factor 6.1 Business Risks 6.2 SWOT Analysis

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