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Groundnut Oil Business Plan

INTRODUCTION

Groundnut is one of the most important oil seed crop in the world. It contains 48-50% oil, 26-28% protein and 11-27% carbon hydrates, mineral and vitamins.

Groundnut is either cultivated sole or mixed with other crops (mixed cropping) like maize, sorghum, cotton, Ben-seed (sesame) sunflower etc. 55%of the groundnuts producer in Nigeria practiced mixed cropping.

Groundnut is grown on 26.4 million hectares worldwide, with the total production of 37.1 million metric tons and average production of 1.4 metric tons per hectare (FAO, 2011). Groundnut is the 13th most important food crop and 4th in oil seed crop of the world. Groundnut seeds (kernels) contain 40-50% of fats, 20-50% and 10-20% carbohydrates (FAO 2009).

Groundnut seeds or nuts are nutritional source of vitamin E, Niacin, Falacin, calcium, phosphorous, magnesium, zinc, iron, riboflavin, this amino and potassium (FAO, 2009). Groundnuts (peanut) are consumed directly raw, roasted or boiled.

The extracted oils are used as culinary oil (suitable for cooking) and also by products of the extracted oil and groundnut haulms are used as livestock feeds. It is an industrial raw material (oil, cake and fertilizer) and as such the uses of vegetable oil plants make it an excellent cash crop for domestic markets as well as foreign trade for several developing countries.

The demand for domestic and industrial application of groundnut oil has continued to increase. It is estimated that for every Nigerian household of five, about two litres of groundnut oil are consumed weekly for cooking. However, groundnut oil is an essential multipurpose raw material for both food and non-food industries.

As a business, groundnut oil production and processing offers an opportunity for groundnut oil millers to earn steady income and also provide employment opportunities for countless number of men and women. On a national scale it also helps to reduce our dependence on other countries to meet our increasing food demand.

Major customers for groundnut oil products in Nigeria are the makers of margarines, butter, mayonnaise, soaps, waxes and polish. Other customers includes pharmaceutical companies, diary companies including makers of vegetable oil based cheese, ice cream, filled milk, etc. Groundnut oil is also a major ingredient in tin plating, lubricants and biodiesel. Households are definitely major customers of groundnut oil also.

The high demand for locally made crude groundnut oil and its associate products has led to an increase in vegetable oil mills springing up in many parts of the country.

This however is still a far cry from the ever increasing local demand for the product. Hence starting a groundnut mill of your own either on a large, small or medium scale is indeed a very wise decision as this will bring you immense financial benefit both in the short and long term.

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Table of content

Page

Executive Summary4
Business Description7
Products and Services12
Market Analysis13
Competitor Analysis15

Sales and Marketing Plan19
Operational Plan25
Management Plan 27
Financial Plan and Projections30

Executive Summary

Overview

PATILAD Groundnut Oil is a start-up groundnut oil production and processing farm that is involved in the sales and distribution of quality and affordable groundnut oil (varieties), groundnut cake, and other groundnut oil derivatives targeting consumers in the Northern Nigeria and also the international market.

We are located in Barnawa Kaduna State.

The Company

PATILAD Groundnut Oil is established as a limited liability company owned by Dayo Adetiloye, Adebayo Tijani, and other investors.

  The farm is managed and directed by Dayo Adetiloye, a veteran in the Agric. industry with 8 years’ experience, and Adebayo Tijani, an experienced Agro-allied specialist with over 15 years’ experience.

Products and Services

PATILAD Groundnut Oil will sell groundnut oil products, including groundnut cake.

We’ll also be offering hiring services of equipment to other businesses.

We produce, process, and package to meet the standard organization of Nigeria and international standards.

We are concerned about providing products that suit the many uses of groundnut oil either for edible or industrial uses.

The Market

According to the United States Department of Agriculture, the groundnut oil production in Nigeria is 920,000 metric tonnes (MT) (2012), which is far below 1,315 MMT domestic demands in 2012, within the period a deficit of 470,000 were imported the same year to supplement the domestic production.

This large deficit is definitely a huge market potential for small and medium-scale local groundnut oil.

What is more interesting about this fact is that the groundnut oil processed locally are cheaper and of higher quality provided the right condition are ensured.

Competition

Competitors for PATILAD Groundnut Oil are Sharada Oil Mills, Starlex oil, and Agon Bello Global Services.

PATILAD Groundnut Oil’s competitive edge includes the use of modern milling equipment which turns out high-quality products, excellent customer service, the expertise of its founders, unique branding and penetrative marketing, etc.

Financial Considerations

PATILAD Groundnut Oil seeks N10 million in long-term financing to cover start-up costs, equipment, building expenses, and working capital.

Funding for the launch of the business is provided primarily by equity from the partners and investors.

The business will reach positive cash flow in its 10th month of operation, allowing for expedited repayment of its loan obligations, as well as for dividends to be paid to the owners.

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