Mechanized Paddy Rice Cultivation, Milling and Packaging in Nigeria; The Feasibility Report.

Rice is the seed of the grass species Oryza sativa (Asian rice) or Oryza glaberrima (African rice). As a cereal grain, it is the most widely consumed staple food for a large part of the world’s human population, especially in Asia. It is the agricultural commodity with the third-highest worldwide production (rice, 741.5 million tonnes in 2014), after sugarcane (1.9 billion tonnes) and maize (1.0 billion tonnes).

The health benefits of rice include its ability to provide instant energy, regulate and improve bowel movements, stabilize blood sugar levels, and slow down the aging process. It also plays a role in providing vitamin B1 to the human body. Other benefits include its ability to aid in skin care, boost metabolism, aid in digestion, reduce high blood pressure, help in weight loss, boost the immune system, and provide protection against dysentery, cancer, and heart diseases.

These benefits can be found in more than forty thousand varieties of this cereal available throughout the world. The two main categories are whole grain and white rice. Whole grain is not that processed, so it is high in nutritional value, whereas white rice is processed so that the bran or outer covering is removed, leaving it with fewer nutritional value. People choose different types of rice depending on their culinary needs, availability, and its potential health benefits as well.

Rice is an increasingly important crop in Nigeria. It is relatively easy to produce and is grown for sale and for home consumption. In some area’s there is a long tradition of rice growing, but for many, rice has been considered a luxury food for special occasions only. With the increased availability of rice, it has become part of the everyday diet of many in Nigeria.

There are many varieties of rice grown in Nigeria. Some of these are considered ‘traditional’ varieties, others have been introduced within the last twenty years. Rice is grown in paddies or on upland fields, depending on the requirements of the particular variety; there is limited mangrove cultivation. New varieties are produced and disseminated by research institutes, or are imported from Asia. Some varieties of rice grown in Nigeria includes Fadama rice, Upland rice, Lowland rice and Indigenous red grain specie (Oryza glaberrina).

Nigerians consume about five point five million (5,500,000) tonnes of rice annually, and even though the amount of rice locally produced is three point six million (3,600,000) tonnes, and the amount imported is one point nine million (1,900,000) tonnes, it’s still enough to put Nigeria as one the highest importers of rice in the world.
Nigeria currently spends roughly N 365 billion yearly on the importation of the remaining one point nine million (1,900,000) tonnes, simply because local production alone has failed to satisfy the very high demand for rice in the country. Every State in the country has chosen an optimal variety of rice according to the soil and weather conditions. Take a close look at top 8 states with rice farming preferences and their choice of rice! Ekiti State – Igbemo Rice Nasarawa State – Olam Rice Ebonyi State – Ebonyi Rice Niger State – Mama Happy Rice Kano State – UMZA Rice Ogun State – Ofada Rice Anambra State – Anambra Rice Kebbi State – Labana Rice.

This report seeks to examine the financial viability or otherwise of establishing a mechanized rice plantation and processing plant in Nigeria.

The size and locations of the farm is three hundred and seventy (370) hectares of land located in Enugu State. Three hundred and sixty (360) hectares would be used for the farm while the remaining ten (10) hectares would be used for the construction of the office, warehouse and other civil works.

The installed capacity of the proposed plant is one (1) ton of paddy rice per hour and the plant is expected to operate double shifts of eight (8) hours each at 75% capacity of the installed in the first, second, third, fourth and fifth year of operations and producing three hundred and thirty (330) tons of whole rice, sixty (60) tons of bran, sixty (60) tons of broken rice and one hundred and thirty-two (132) tons of husk b-monthly.

The paddy is expected to yield 22% of husk, 3% Impurities, 10% Bran, 55% Head Rice and Broken rice of 10%. All the bye products from the mill such as broken rice, husk, chaff, and bran are effectively used. Broken rice is sold to secondary rice market where it is used to produce biscuits and as fillers for other food products. The bran is sold to fish and animal feed compounders.

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 2.0 Agricultural Practice 2.1. Varieties 2.1 Planting 2.2 Manures and Fertilizers 2.3 Weeding 2.4 Climate / Irrigation 2.5 Harvesting and Yield 2.6 Herbicides 2.7 Soil Type 2.8 Diseases and Pests 3. Marketing Plan 3.1 Description of product 3.2 Product Packaging and delivery 3.3 The Opportunity 3.4 Pricing Strategy 3.5 Target Market 3.6 Distribution and Delivery Strategy 3.7 Promotional Strategy 3.8 Competition 4. Production Plan 4.1 Description of the Location 4.2 Raw Materials 4.3 Production Equipment 4.4 Cultivation / Production Process 4.5 Production Cost 4.6 Stock Control Process 4.7 Pre-Operating activities and expenses 4.7.1 Operating Activities and Expenses 4.8 Project Implementation Schedule 5.0 Organizational and Management Plan 5.1 Ownership of the business 5.2 Profile of the promoters 5.3 Key Management Staff 5.3.2 Management Support Units 5.4 Details of salary schedule 6. Financial Plan 6.1 Financial Assumption 6.2 Start – Up Capital Estimation 6.3 Source of Capital 6.4 Security of Loan 6.5 Loan Repayment Plan 6.6. Profit and Loss Account 6.7 Cash Flow Analysis 6.8 Viability Analysis 7.0 Business Risk and mitigation factor 7.1 Business Risks 7.2 SWOT Analysis

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