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Establishing a Sesame Seed Cleaning and Dehulling Plant in Nigeria, the Feasibility Report

August 2013 | 34 pages | ID: E98EE860550EN
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Sesame seeds (or sesamum or benniseed) are the seeds of the tropical annual Sesamum indicum. The species has a long history of cultivation, mostly for its yield of oil.

Once harvested, the seed is cleaned and dried to about 8% moisture and may then be stored before crushing. The seed is typically crushed intact for the oil. This, however, yields a meal that is made bitter and somewhat indigestible by the presence of the fibrous husk. As such the meal is only useful as cattle feed.

The quality of the meal can be improved by removing the seed coat, dehulling, before crushing.

Dehulling is also important for the production of the ground seed pastes such as tahini and for confectionery uses. The dehulled seeds are extensively used in the ground form where they comprise the base material of tahini, a paste used as an ingredient in Eastern Mediterranean and Middle Eastern foods.

This report is to examine the financial viability or otherwise of establishing sesame seed cleaning and dehulling plant in Nigeria.

Sesame can be processed to several different stages, such as simply cleaning, or cleaning and dehulling, cleaning/dehulling/drying, cleaning/dehulling/drying/crushing for oil, etc. In Nigeria, the primary processing facilities focus almost exclusively on cleaning. There are a few commercial cleaning facilities, and they are all privately held. Two are in Kano with a cleaning capacity of about 100 tonnes a day, and one is in Lagos with a cleaning capacity also of about 100 tonnes a day.

A commercial cleaning facility is about to be installed in Nassarawa State, with a capacity to handle about 200 tonnes a day.

There are also dehulling/cleaning/color-sorting facilities in Lagos, but most of the sorting is done manually by women, some located at storage facilities in Lafia and Makurdi. There are no commercial crushing plants for sesame seed oil.

Nigeria is a leading producer of sesame seed in the world with an annual production of about 120,000 tons and at such sourcing for the raw materials would not be a challenge.

The production capacity of the proposed business is one and half {1.5} tons per hour at 75% of the installed capacity working for double shift of 8 hours each. The required startup capital estimate of the business is N 230,252,500.00 and it would be funded from 30% equity N 69,075,750.00 and 70% loan N 161,176,750.00. The loan would be used to finance our purchase on installation of the production plant and the working capital.

We expect to generate a net profit after tax of N 125,696,855.22 and N 143,096,617.98 in the first and second year with the repayment plan of two {2} years with moratorium period of two {2} months. The assumed interest rate for the loan is 25%.
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 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 Milestones

4. 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 Account
5.7 Cash Flow Analysis
5.8 Viability Analysis

6. BUSINESS RISK AND MITIGATION FACTOR

6.1 Business Risks
6.2 SWOT Analysis


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