Groundnut Oil Business Plan

Executive Summary

Overview

PATILAD Groundnut Oil is a start-up groundnut oil production and processing farm that is involved in sales and distribution of quality and affordable groundnut oil (varieties), groundnut cake, and other groundnut oil derivatives targeting consumers in the Northern Nigeria and also the international market. We are located in Barnawa Kaduna State.

The Company

PATILAD Groundnut Oil is established as a limited liability company owned by Dayo Adetiloye, Adebayo Tijani, and other investors.  The farm is managed and directed by Dayo Adetiloye, a veteran in the Agric. industry with 8 years’ experience and Adebayo Tijani, an experienced Agro-allied specialist with over 15 years’ experience.

Products and Services

PATILAD Groundnut Oil will sell groundnut oil products, including groundnut cake. We’ll also be offering hiring services of equipment to other business. We produce, process and package to meet standard organization of Nigeria and international standard. We are concerned about providing products that suit the many use of groundnut oil either for edible or industrial uses.

The Market

According to United State Department of Agriculture, the groundnut oil production in Nigeria is 920,000 metric tonnes (MT) (2012), which is far below 1,315 MMT domestic demands in 2012, within the period a deficit of 470,000 were imported the same year to supplement the domestic production. This large deficit is definitely a huge market potential for small and medium scale local groundnut oil. What is more interesting about this fact is that the groundnut oil processed locally are cheaper and of higher quality provided the right condition are ensured.

Competition

Competitors for PATILAD Groundnut Oil are Sharada Oil Mills, Starlex oil and Agon Bello Global Services. PATILAD Groundnut Oil’s competitive edge includes the use of modern milling equipment which turns out high quality products, excellent customer service, the expertise of its founders, unique branding and penetrative marketing etc. 

Financial Considerations

PATILAD Groundnut Oil seeks N10 million in long-term financing to cover start-up costs, equipment, building expenses, and working capital. Funding for the launch of the business is provided primarily by equity from the partners and investors. 

The business will reach positive cash flow in its 10th month of operation, allowing for expedited repayment of its loan obligations, as well as for dividends to be paid to the owners.  Revenue will top N174,880,000  with gross margin of 31% in the 1^st year of operation.

INTRODUCTION

Groundnut is one of the most important oilseed crops in the world. It contains 48-50% oil, 26-28% protein and 11-27% carbon hydrates, mineral and vitamins. Groundnut is either cultivated sole or mixed with other crops (mixed cropping) like maize, sorghum, cotton, Ben-seed (sesame) sunflower etc. 55%of the groundnuts producer in Nigeria practiced mixed cropping. Groundnut is grown on 26.4 million hectares worldwide, with the total production of 37.1 million metric tons and average production of 1.4 metric tons per hectare (FAO, 2011). Groundnut is the 13th most important food crop and 4th in oilseed crop of the world. Groundnut seeds (kernels) contain 40-50% of fats, 20-50% and 10-20% carbohydrates (FAO 2009). Groundnut seeds or nuts are nutritional source of vitamin E, Niacin, Falacin, calcium, phosphorous, magnesium, zinc, iron, riboflavin, this amino and potassium (FAO, 2009). Groundnuts (peanut) are consumed directly raw, roasted or boiled. The extracted oils are