SheaButter Production and Processing Business Plan

50,000.00 20,000.00

INTRODUCTION

Shea butter is a fat extracted from the nut of the African shea tree by crushing and boiling. It is widely used in cosmetics as a moisturizer and salve. Shea nuts are primarily grown in West and Central Africa in the semi-arid Sahel, referred to by traders as the “Shea Belt”. It is usually yellow in color when raw, but ivory or white when refined. Sometimes, the chocolate industry uses shea butter mixed with other oils as a substitute for cocoa butter, even though the taste is noticeably different.

Shea butter is mostly used in the cosmetics and beauty care industry for skin and hair-related products (lip gloss, skin moisturizers, and hair conditioners). It is also used by soap manufacturing companies, but in small amounts (5–7 percent of the oils in the recipe).

The demand for domestic and industrial application of Shea Butter has continued to increase. Shea butter processing company is classified under the cosmetic production industry and as a matter of fact, unpredictable incomes do not really affect cosmetics. The revenue generated in this industry has increased steadily in recent years as some of the industry’s largest export partners began to experience post – recessionary growth. Going forward, the industry’s diverse product lines and commitment to research and development will keep revenue growth stable. Shea nut butter extraction involves procurement of dried nuts from suppliers. The nuts are fed into the machine to remove the fats. The fats are then collected and stored in appropriate containers. Shea nut cake (SNC), the residue that remains after the extraction of shea butter, serves as excellent fuel. It is a good ingredient for livestock feed formulation as well as for the treatment of skin diseases. The cake is also ideal for use as manure and fertilizer production. The cake is also packed in bags ready for sale to the feed millers.

As a business, Shea Butter production and processing offers an opportunity for Shea Butter millers to earn steady income and also provide employment opportunities for countless number of men and women.

PATILAD Shea Butter local customers in Nigeria are pharmaceutical, chocolate and cosmetics industries. It is used as an important raw material for the manufacture of both laundry and bath soaps, jelly, candles and cosmetics. Shea butter is mainly used as cooking oil, in the making of chocolate and candle and as moisturizers in the cosmetic industry. It is used in the treatment of skin disorders like eczema, burns, rashes, stretch marks, acne, wrinkles, skin discolorations, itching and other skin problems. It also provides natural protection from the sun’s UV rays. It is also an excellent agent for softening skin. It can also be used to maintain hair moisturization especially in dry hair.

Nigeria has comparative advantage in the cultivation, processing and export of crude Shea butter in Africa over her counterparts due to the large arable land available for production and the conducive climatic condition. The high demand for locally made crude Shea Butter and its associate products has led to an increase in Shea Butter mills springing up in many parts of the country. This however is still a far cry from the ever increasing local demand for the product. Hence starting a Shea Butter mill of your own either on a large, small or medium scale is indeed a very wise decision as this will bring you immense financial benefit both in the short and long term.

Business Description

PATILAD Shea Butter is a start-up firm involved in the production, processing, and distribution of quality and affordable Shea Butter, shea butter cake and other Shea Butter derivatives targeting consumers in the south-west and also the international market. We are located in Saki, Oyo State.

PATILAD Shea Butter is a new enterprise and is about to start registration process with Corporate Affairs Commission of Nigeria.

 

Form of business:      Limited Liability Company

Owners of business:   Dayo Adetiloye, Adebayo Tijani, and other investors.

 

State of business:       The business is a new business

Opening days:             9am -6pm, Monday to Friday.        

Business Development

Consultant:                  Leye  Adebisi (MBA)

Hundred and Five Academy

Legal Adviser:             Barrister Adejoke Chambers.

Board of Directors:     Dayo Adetiloye, Adebayo Tijani, Olufemi Ayodeji 

VISION

To be among the first 3 largest Shea Butter producer/distributor in south-west Nigeria by 2020.

MISSION

  • To give our customer the very best products and provide excellent customer service so that we may earn your trust and ensure continued business transaction.
  • To make sure Shea butter penetrates into all cosmetics, food and pharmaceutical companies in Nigeria and beyond.

OBJECTIVES

  • Increase revenue from the sales of crude Shea Butter to N30,000,000 over 2 years.
  • To maintain profit margins at 20-25% through close attention to expenses and cost of Shea Butter production.
  • To establish our brand in the heart of major cities via our branded mobile partnerships with pharmaceutical, food and cosmetics companies.
  • To initiate a relationship with bulk purchasers or dealers to reach far places in Nigeria

KEYS TO SUCCESS

  1. High quality Shea butter
  2. Low operating cost and efficient processing techniques.
  3. Modern solution and technology.
  4. Maintenance of Hygienic, safe and human friendly processing facility.
  5. Professional and experienced staffs.
  6. Offer consistently quality processed products.
  7. Outstanding customer service and faster processing duration.

 

Products and Services

PATILAD Shea Butter specializes in the production, processing and sales of Shea butter and other related products. It is our hope to provide excellent customer service for our customers and suppliers. Below are the products we wish to provide:

  • Shea Butter
  • Shea Nut Cake (SNC)
  • Export Services
  • Delivery Services
  • Training

PATILAD Shea Butter also offers hiring services of our equipment and technical expertise to other Shea Butter and producers.

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Table of content

Page

Executive Summary3
Business Description4
Products and Services6
Market Analysis7
Competitor Analysis8

Sales and Marketing Plan9
Operational Plan12
Management Plan 13
Financial Plan and Projections14

Executive Summary

Overview

PATILAD Shea Butter is a start-up Shea Butter production and processing farm that is involved in production, sales and distribution of quality and affordable Shea Butter and other derivatives targeting consumers in the local and international market. We also involve in export services of Shea products to countries outside Nigeria. We have unique method of packaging, brand and permanent label to promote our products to meet international standard. PATILAD Shea Butter also organizes unique periodic training programs on Shea value, processing and quality improvement skills for women cooperatives within our local communities.

We are located in Saki, Oyo State.

The Company

PATILAD Shea Butter 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 Shea Butter specializes in the production, processing and sales of shea butter and other related products like shea nut cake, shea butter cream and others. We will also offer hiring services of equipment to other Shea Butter millers.  We also have a standard processing plant as a modern technique for producing and processing our shea butter.

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 Shea Butter either for edible or industrial uses.

The Market

The Shea butter industry in Nigeria is dominated by small scale with production capacity of less than 0.1 tons per day. The production plants are usually found in south western part of Nigeria, where there is a large market for the product. Nigeria, the leading producer of Shea butter in the world with a production capacity of about 500,000 metric tons produced mainly from the use of crude implements is yet to fully realize her potentials in the processing and export of Shea butter owning to a number of reasons. Nigeria, currently exports about 50,000 tons of shea butter annually, is believed to account for almost 60 per cent of the world’s supply of shea butter and allied derivatives valued at about $3.8 billion every year.

Competition

Competitors for PATILAD Shea Butter are Dokun Global Resources Limited, Sokaiko shea butter farm, Shea Butter Ventures, etc.

PATILAD Shea Butter’s competitive edge includes the use of modern equipment and techniques which turns out high quality products, excellent customer service, the expertise of its founders, etc. 

Financial Considerations

PATILAD Shea Butter seeks N5 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 N14,500,000 and profit will reach about N3,843,950 in the 1st year of operation.

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