Groundnut Oil and Cake Production in Nigeria; The Feasibility Report.

Peanut, or groundnut (Arachis hypogaea), is a species in the legume or “bean” family (Fabaceae). The peanut was probably first cultivated in the valleys of Peru.

It is an annual herbaceous plant growing 30 to 50 cm (1.0 to 1.6 ft) tall. The leaves are opposite, pinnate with four leaflets (two opposite pairs; no terminal leaflet), each leaflet 1 to 7 cm (⅜ to 2¾ in) long and 1 to 3 cm (⅜ to 1 inch) broad. The flowers are a typical peaflower in shape, 2 to 4 cm (0.8 to 1.6 in) (¾ to 1½ in) across, yellow with reddish veining.

Hypogaea means “under the earth”, after pollination, the flower stalk elongates causing it to bend until the ovary touches the ground. Continued stalk growth then pushes the ovary underground where the mature fruit develops into a legume pod, the peanut – a classical example of geocarpy. Pods are 3 to 7 cm (1.2 to 2.8 in) long, containing 1 to 4 seeds.

Groundnuts also have a variety of industrial end uses. Paint, varnish, lubricating oil, leather dressings, furniture polish, insecticides, and nitroglycerin are made from groundnut oil. Soap is made from saponified oil, and many cosmetics contain groundnut oil and its derivatives. The protein portion of the oil is used in the manufacturing of some textile fibres. Groundnut shells are used in the manufacture of plastic, wallboard, abrasives, fuel, cellulose (used in rayon and paper) and mucilage (glue).

Groundnuts are also used for food and as an ingredient in confectionery products. After the extraction of oil, the residual cake is processed largely for animal feed, but is also used for human consumption.

Nigeria currently produces about two million (2,000,000) MT representing five percent (5%) of world production and in the period between 1956 and 1967, groundnuts including its cake and oil, accounted for about seventy percent (70%) of Nigeria’s total export earnings and created the legendary groundnut pyramids which dotted the landscape of Kano.

Some of the other states where groundnut is produced in Nigeria include Kwara, Kaduna, Sokoto, Bauchi, Katsina, Zamfara, Nassarawa and most of the northern states.

Groundnut is the 13th most important food crop of the world. It is the world’s 4th most important source of edible oil and 3rd most important source of vegetable protein. Groundnut seeds contain high quality edible oil (50%), easily digestible protein (25%) and carbohydrate (20%).

Groundnut oil is also one of the edible oils that is in very high demand. Groundnut oil is majorly used for cooking food and for the production of soap, margarine, and cosmetics. The raw materials are also readily available. The production technology is simple and the equipment are locally fabricated.

Due to the ban on the importation of crude vegetable oil, the nation has witnessed a deficit in supply of the product though much improvement has been recorded in the local production of the product.

This report seeks to examine the financial viability or otherwise of establishing a crude groundnut oil production plant in Nigeria with groundnut seed as the raw material.

The demand for Groundnut Oil is high in Nigeria. Consumption of palm oil cuts across social, religious, age in Nigeria in general because it is consumed every day in almost every home in Nigeria mainly for cooking purposes.

The production plant comprises of a toaster, oil expeller, filter press, holding tank, semi-automatic filling machine,
pet bottle capping device and weighing machine. The plant would operate on a mechanical press process with fifty percent (50%) oil recovery rate and seven to eight percent (7-8%) oil residue.

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 Statement 5.7 Cash flow Statement 5.8 Viability Analysis 6.0 Business Risk and mitigation factor 6.1 Business Risks 6.2 SWOT Analysis

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