Executive Summary of Tomatoes Business Plan in Nigeria.
PATILAD will plant and process tomatoes while also serving directly as raw materials buyers from farmers for tomato paste. Thereby we will be reducing poverty for small holder farmers, who are among the country’s most vulnerable population and decreasing Nigeria’s dependence on an imported food products.
Nigeria is ironically the world’s 13th largest tomato producer and the world’s largest importer of tomato paste. Although approximately 200,000 Nigerian farmers grow over 1.5 million metric tonnes of tomatoes every year, half of their harvest is lost before reaching the market, and the remaining 50% is subject to significant downward pressure on price due to common gluts in the markets and the perishable nature of the crop.
Farmers, who are among Nigeria’s most financially vulnerable population, bear the burden of both these post-harvest losses and this price uncertainty.
Smallholder tomato farmers lack access to a consistent, large market for their produce, rendering them unable to consistently make a profit and dis-incentivized to increase their yields or change their farming practices. As a result, domestic supply cannot meet local demand for fresh tomatoes, which exceeds 2 million metric tonnes or $2.5 billion annually. The country supplements local demand for fresh tomatoes with $360 million (over 300,000metric tonnes) of imported tomato paste annually.
A well-located commercial tomato processing operation focused on continuous production rather than absorbing seasonal harvest gluts can increase incomes over five times for participating smallholder farmers, who comprise 75% of Nigeria’s workforce.
PATILAD will follows a low margin, high volume base of the pyramid model where profit is driven by both scale and technological innovation to control costs. We project that PATILAD will become profitable within three years of launch following investment focused on expanding the farmer network, our nucleus farm and expanding tomato paste processing capacity.
Over this period, we anticipate that PATILAD will undergo two key capital raises: a ₦5,000,000 in seed equity in the first quarter of year two to fund our farm expansion and begin processing tomato paste.
Following the successful scale-up, ₦20,000,000 growth equity subscription in quarter one of year four is required to fund expansion of the business model. Once PATILAD reaches scale we believe that profit margins will approach 15%. The project set up cost is ₦10 million using imported machines.
The project is very profitable. With aggressive marketing strategies, good management and export oriented, the payback period would be less than 2 years. The return on investment is very encouraging at 25 per cent of profit.
We forecasted a 40% market share. The business will generate a very high gross margin and a modest net margin after year one and comfortable margin after year three. By year three the business will have developed a respectable yearly net profit.
Too be among the top 3 Agricultural processing company by 2025
- Constant growth in sales in 12 months.
- To generate customer satisfaction so that at least 60% of our customer base is repeat business.
- To provide quality product at reasonable prices with exemplary services.
– To be a one stop-shop for tomato products in Nigeria
– To help young people to create interest and start farming in Nigeria
– To run farming as a profitable business.
– Our Mission
To exceed the customers’ expectations in every sense by providing quality produce in a sustainable way.
In Nigeria, the market opportunity for producing tomato paste and other processed tomatoes for domestic consumption alone is immense.
Despite being sub-Saharan Africa’s largest producer of tomatoes, the country spends over $360 million annually to import over 300,000 metric tons of tomato paste.
Tomato paste has become highly integrated into the Nigerian diet. The regional opportunity is even larger. In 2011, Sub-Saharan Africa imported 550,000 metric tons of tomato paste, and, for seven years prior, consumption had been growing at 13% annually.
Capturing portions of the tomato paste market domestically and regionally could offer large returns.
Annually, 40-60% of Nigeria’s tomato harvest is wasted. Without domestic manufacturers buying, processing, and thus preserving tomatoes that otherwise quickly rot, farmers have no market for their produce. Excess farm production already exists that could be profitably absorbed by a processing business.
Nigeria’s government has made a commitment to produce more of its finished and raw agricultural products domestically, and plans to cut imports by more than $10 billion annually. In the past, Nigeria’s commitments to increasing domestic production have translated into its government actively protecting infant industries and by increasing availability of Central Bank financing.
We will produce quality canned Tomato paste, Tomato Ketchup and orange juice for local consumption and for export.
Listed below are the products we wish to provide at PATILAD; Tomato Paste
Tomato juice and sauce
The benefits of my products and services are
- Large scale production of different types and forms of High Quality tomato pastes
- Affordable prices
- Our products are packaged with high quality pack
- Longer shelf life
The enterprise will be managed by the owner/manager Mr Dayo Adetiloye who has over 15 years’ experience in farming. He started from child hood following my father to farm. From this he has learnt some success secrets of a successful farming business.
He has bachelor of Agriculture from Obafemi Awolowo University Ile ife) with focus on Soil Science.
Rotimi Sholanke – (B Agric, MBA): He has over 15 years’ experience in the industry. He has bachelor of Agriculture with specialization soil science. He has masters in business administration and he is a project management professional. He is our business development strategist and a strategic partner.
Femi Akinyemi – He has over 10 years’ experience in the farming business. He is a food scientist and nutrition officer. He is in charge of our production unit.
Kemi Ayanwale – she is a microbiologist with proficiency in production and packaging. She is in charge of our packaging unit with over 7 years’ experience.
The business benefit from Large Scale production, Export opportunities, Training opportunities.
We manage the business to generate cashflow for profitability and expansion.
Our experience in the industry brings competence and credibility
My staff and I will bring operational skills, processing skills, packaging skills, and marketing skills and customer service to the business.
Financial Plan and Projections
The promoter’s business plan requires an amount of 10 million to start PATILAD and make our processing plant ready to serve the needs of our customers. The money will be invested in capital equipment and operational cost. Here also are the few equipment we believe are necessary in starting PATILAD:
- TOMATO processing lines
- Equipment for tomato paste production
- Machinery for whole peeled tomatoes production
- Equipment for diced/pulp production
- Machinery for pasta/tomato sauces production
- Equipment for ketchup production
- Machinery for drinkable tomato juice production
- Twist spiral solutions
- FLUID and Spiral Freezing solutions
- Jam, Marmalade, Candying/ Blending and Formulating
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