Groundnut Paste (Peanut Butter) 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%).

One of the products that can be produced from groundnuts is groundnut paste. Groundnut paste is a smooth paste made from dry-roasted peanuts, sometimes with added salt or sugar. It is a popular food in Australia, parts of Asia, parts of Europe and North America.

The U.S. and China are the world’s leading exporters of Groundnut Paste. It is most commonly served as a sandwich spread and has been traditionally paired with jelly or jam. In South Eastern Nigeria Groundnut Paste is usually served along with garden egg.

Groundnut Paste has a lot of Benefits to human being such as, protecting the heart, keep healthy skin, maintain hair health, strengthen the bones and prevent birth defects.

There is enormous increase in the demand of Groundnut paste in both Nigeria market and internationally.

The production plant comprises of a Groundnut Roaster, Processing Tank, Miller (Colloid Oil Mill), Motorized Mixer, Packaging Machine (Auto), Accessories, Generator, Project Vehicle, Wood Pallets and Weighing Machine.

The production capacity of the proposed plant is one (1) ton per day and would operate a single shift of eight (8) hours each at seventy-five percent (75%) of installed capacity for three hundred (300) working day.

This report seeks to examine the financial viability or otherwise of establishing a groundnut paste production plant 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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