Nigeria is one of leading countries in Africa in the production of maize. In all over the country there are million tonnes of maize produced annually. For the country to grow there is need to develop on the real sector of the economy.
For the development of the real sector, there is need to develop the manufacturing and the agricultural sector. With development of these two sectors employment will be generated, GDP will increase, more export will be generated and foreign exchange earned.
It is also advisable to develop those products that the country has comparative advantage over other countries of the world. Such crops that do very well in Nigeria such as maize, cassava, yam etc should be processed and packaged to add value for preservation, local consumption and export to all other parts of the world.
In this investment profile we discuss on how to invest in the business of corn/maize processing and packaging into cornflakes & corn-chips for local consumption and export.
Cornflake is a fast food eaten almost all households in Nigeria by old and young. It can be easily prepared with milk with hot or cold water. The major raw material for production of cornflake is maize (corn). Maize is grown in all the parts of the country. Therefore the raw material for the project is readily available.
Other raw materials include sugar solution, malt and salt. These are also in abundant supply in Nigeria. Maize, the major raw material, is cultivated in all parts of the country and the cultivation is very easy, cheap and gestation period very short. Also the raw material, maize thrives well in all the states of the federation. The prevailing climatic and soil conditions in Nigeria are good for mass production of maize.
From records available, there is so much wastage of maize during the growing season due to lack of inadequate storage facilities. The waste could be prevented by the provision of cheap silos for maize storage and preservation. This project is seen as one of the ways to prevent wastages.
From our study, there is virtually no small scale commercial manufacturer of high quality corn flakes in Nigeria today. There are only two major companies producing cornflakes in Nigeria and their production output is very small to meet up with the increasing demand for cornflakes.
Cornflakes are a consumable demanded on daily basis. To meet up with the increasing consumption rate, more small scale investors are highly needed to boost the supply.
Small scale prospective investors who carried out a comprehensive studies backed up with effective marketing strategies should be able to economise costs to reap huge benefits resulting from the existing supply-demand gap in this area.
To set up this project, the required machinery and equipment include boilers, separators, sifter, mixer, granulators, rotary oven tanks, silos, screening and cooling equipment. These machines and equipment are locally available and details information will be given to prospective investors.
The plant will be able to process up to 5 metric tonnes of corn/maize in a shift of 8 hours, producing about 3 tonnes of cornflakes in a shift. It can be operated in a double shift of 8 hours each in a day.
The production process is simpler. Briefly put, it involves storing maize in the silos, cleaning and grinding process; mixing up with other ingredients such as sugar, malt and salt and drying the products with a rotary drying oven. After drying, the cooling process is carried out, followed by packaging process.
The project can be set up in any part of the country, since maize (corn) is grown in all the parts of the country. From preliminary feasibility carried out, the project can be started with a total sum of N8.0 million as shown below. Based on investment analysis carried out a turnover of N55.0 million is achievable in the first year working for average of 250 working days in a year. The payback period is within two years, and return on investment is over 56 per cent.
Details including production technology, process flow, size and structure of the local markets and ECOWAS sub-region, market share and effective marketing strategies to be adopted will be incorporated in a comprehensive feasibility studies report for prospective investors.
Prospective investors will be assisted in the procurement and installation of the machinery and equipment as well as sourcing of the required funds where it is not possible to embark on complete funding of the project.
Pre-operational Expenses N 250, 000
Land & Factory Building N1, 500,000
Plant, Machinery & Equipment N4, 500,000
Working Capital N1, 000,000
Utilities N 500, 000
Contingencies N 250, 000
Total N8, 000,000
Source: This Day Online