Elubo (Amala-Isu) Flour Production in Nigeria; The Feasibility Report.

Nigerian agriculture is characterized by considerable regional and crop diversity. Analysis of this sector, particularly the food sub-sector, is fraught with serious data problems. However, the available statistics provide a broad overview of development in agriculture upon which we can make some broad generalizations about its role in economic development and structural change in Nigeria.

In the 1960s, the agricultural sector was the most important in terms of contributions to domestic production, employment and foreign exchange earnings. The situation remained almost the same three decades later with the exception that it is no longer the principal foreign exchange earner, a role now being played by oil.

The sector remained stagnant during the oil boom decade of the 1970s, and this accounted largely for the declining share of its contributions. The trend in the share of agriculture in the GDP shows a substantial variation and long-term decline from 60% in the early 1960s through 48.8% in the 1970s and 22.2% in the 1980s. Unstable and often inappropriate economic policies (of pricing, trade and exchange rate), the relative neglect of the sector and the negative impact of oil boom were also important factors responsible for the decline in its contributions.

On its diversity, Nigerian agriculture features tree and food crops, forestry, livestock and fisheries. In 1993 at 1984 constant factor cost, crops (the major source of food) accounted for about 30% of the Gross Domestic Products (GDP), livestock about 5%, forestry and wildlife about 1.3% and fisheries accounted 1.2%.

Nigeria is by far the world’s largest producer of yams, accounting for over 70–76 percent of the world production. According to the Food and Agricultural Organization report, in 1985, Nigeria produced 18.3 million tonnes of yam from 1.5 million hectares, representing 73.8 percent of total yam production in Africa.

According to 2008 figures, yam production in Nigeria has nearly doubled since 1985, with Nigeria producing 35.017 million metric tonnes with value equivalent of US$5.654 billion. In perspective, the world’s second and third largest producers of yams, Côte d’Ivoire and Ghana, only produced 6.9 and 4.8 tonnes of yams in 2008 respectively. According to the International Institute of Tropical Agriculture, Nigeria accounted for about 70 percent of the world production amounting to 17 million tonnes from land area 2,837,000 hectares under yam cultivation.

Yam, a tropical crop in the genus Dioscorea, has as many as 600 species out of which six are economically important staple species. These are: Dioscorearotundata (white guinea yam), Dioscoreaalata (yellow yam), Dioscoreabulbifera (aerial yam), Dioscoreaesculant (Chinese yam) and Dioscoreadumetorum (trifoliate yam). Out of these, Dioscorearotundata (white yam) and Dioscoreaalata (water yam) are the most common species in Nigeria. Yams are grown in the coastal region in rain forests, wood savanna and southern savanna habitats.

Yam is grown on free draining, sandy and fertile soil, after clearing the first fallow. Land is prepared in the form of mound or ridge or heap of 1 metre (3 ft 3 in) height. The yams recommended for such soil conditions in Nigeria are white yam or white guinea yam (Discorearotundata) and water yam or yellow yam (Discoreaalata). Planting is done by seed yam or cut setts from ware tubers.

One major achievement of the present civilian administration in Nigeria in the past twelve (12) years has been the revival of the growth of the middle class which has been witnessed in the country.

These growths continues to drive the increasing social and health awareness of the need for hygienically well packaged and prepared foods required for ease of preparation and good quality living standard of people.

These coupled with the geometrically exploding population and the continued rural-urban drift continues to fuel the demand for well packaged food stuffs especially elubo, a staple food in south western, Nigeria.

Elubo flour (Amala-Isu) Àmàlà is a Nigerian food made out of yam flour and/or cassava flour. Yam flour is yam that has been peeled, sliced, cleaned, dried and then blended into a flour.

Yam is white in colour. It turns into a brownish colour after it has been dried; this gives àmàlà its thick brown colour. Àmàlà is derived from Western Africa and is eaten mostly by the Yoruba people in Nigeria. It could be served with a variety of ọbẹ (soup), such as ẹfọ, ilá, ewédú, ogbono or gbegiri (black-eyed beans soup).

This report seeks to examine the financial viability or otherwise of producing elubo flour from yam in Nigeria.

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 Critical Success Factor of the Business 1.5 Current Status of Business 1.6 Description of the Business Industry 1.7 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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