PROFILE ON PRODUCTION OF GROUNDNUT OIL

 

This profile envisages the establishment of a plant of a ground nut oil with a capacity of 1,600 Tons per annum and groundnut cake of 2,150 Tons per annum.

The present demand for the proposed product is estimated at 150,000Tons per annum. The demand is expected to reach at 300,000 by the year 2022.

The plant will create employment opportunities for 29 persons. The total investment requirement is estimated at about N115.497million, out of which N28.8 million is required for plant and machinery.

The project is financially viable with the following profitability indices:

 

Average Return on Assets                              99.3%

 Average Return on Equity                             75.1%

 Average Return on Sales                                6.8%

 Average Debt service coverage                      4.6

 Average proportion of Debt                           0.294

 Average proportion of Equity                         0.706

 Average Debt/Equity Ratio                            29.4:70.6

 Average Operating ratio                                 82.4%

 Average current ratio                                       1.13

 UnDiscounted Pay back period (yr)                    5.1

 Net present Value (N000)                             5194.1

 Internal Rate of Return                                  31.1%

Break Even point(Based on year1)(Sales)    185496.5

 Fractional capacity utilization                        0.547

 Selling Price N000.00                                280.0000

 

 

 

II. PRODUCT DESCRIPTION AND APPLICATION

Groundnut oil is a fixed non-drying oil. Its colour is yellow to greenish yellow. Soluble in ether, carbon disulfide and chloroform but insoluble in alkalies and water. Groundnut oil is edible and is used for cooking and salad oil and for the production of margarine.

The cake contains 39-45% crude protein. The total digestible nutrient is about 80%. Therefore, it is highly appropriate for animal feed.

 

III. MARKET STUDY

 

Ground nut oil as compared with the most common edible oil manufactured from cotton seed and rapeseed has the advantage of an excellent flavor and quite luscious. It is perfect for making mayonnaise and it is extremely useful oil for cooking. Ground nut oil is preferred because it has a mild flavor and burns only at a relatively high temperature. Peanut oil is also popular as high quality salad and is commonly used in margarine. Even though the supply of edible oil is met through both domestic and imported products the market is quite dominated by imports. In 1999-2005 the best supply offered by domestic manufacturers was 26% of the total supply which was attained on 2002, while the average for the same period was around 11%. Despite availability of raw materials like ground nut, linseed, nigger seed, sesame, rapeseed, cotton seed in the country, packed edible oil of foreign sources are flooding the market. 

 


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