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Feasibility Study for Groundnut Oil Production Business

Pan in Ethiopia by Suleman Mossa

Project Profile on Groundnut Oil Production Feasibility

Study Business Pan in Ethiopia.
This profile envisages the establishment of a plant for the production of groundnut oil with
a capacity of 500 tonnes per annum. The plant will also produce 500 tonnes of expeller
cake per annum that can be used for animal feed as by product.

The basic raw material required is dried groundnut, which is found locally.

The present demand for the proposed product is estimated at 1,972 tonnes per annum.
The demand is expected to reach at 5,084 tonnes by the year 2022.

The plant will create employment opportunities for 32 persons.

Investment
The total investment requirement is estimated at Birr 10.57 million, out of which Birr 3
million is required for plant and machinery.

The project is financially viable with an internal rate of return (IRR) of 17.01% and a net
present value (NPV) of Birr 8.60 million, discounted at 8.5%.

The plant will have a backward linkage effect with the agricultural sector. The
establishment of such factory will have a foreign exchange saving effect to the country by
substituting the current imports.

Product Description and Application

Ground nut kernel contains 50-55% of oil. The oil obtained from the kernel is yellow to
greenish yellow in colour with chief constituents of glycerides of oleic and linoleic acids
with lesser amounts of the glycerides of palmitic, stearic, arachidic, behenic, and
lignoceric acid. The oil is used as a substitute for olive oil and other edible oils, soaps,
salad and cooking oil, mayonnaise and margarine. The meal is an important component of
feeds for poultry and cattle.

Plant Capacity
Based on the market study the annual processing capacity of the envisaged plant is 500
tonnes (546,488 lt.) of edible oil assuming that the plant covers 20% of the market share
of year 2012(Two years construction period and three years full capacity attainment
period), based on 300 working days and a single shift of 8 hours per day.

Production Program
At the initial stage of the production period, the plant would require some years to
penetrate into the market and develop production skill. Therefore, in the first, second and
third year of production, the capacity utilization rate will be 70%, 85% and 95%,
respectively. In the fourth year and thereafter, full capacity (100%) production shall be
attained. Table 3.3 shows the production programme of the project.

Production Process

Edible oil technology can be grouped into two: mechanical pressing and solvent
extraction. Sometimes the latter compliments the former. For oilseeds with high oil content
such as ground nut, first mechanical pressing will be applied and over 85% of the oil will
be extracted. The remaining oil in the expeller cake will then be extracted with solvent. For
some other oilseed with low oil content, solvent extraction is generally considered as the
best alternative. However, the initial investment cost of solvent extraction is much higher
than mechanical pressing. In addition, solvent extraction is more appropriate for large
scale processing than small scale edible oil plants. Therefore, in this study the mechanical
pressing technology has been selected.

Ground nut oil production process, based on mechanical pressing technology, can be
grouped into three stages: seed preparation, pressing and crude oil refining.

The seed requires undergoing a thorough cleaning process to remove sand, stalk, plant
debris and any other foreign matters by rotary or table sieve. Usually, the screening
process is

assisted by air aspiration unit. After cleaning, the seeds have to be prepared for efficient
oil recovery by pressing. The stages involved are size reduction of the seeds by breaking
them and then conditioning the seeds by adjusting their moisture content and
temperature, while keeping the seeds hot (say 90-95ºc) for a period of 30-60 minute. Then
the prepared seed shall be conveyed to the screw pressing machine where it is pressed
by the action of worm and outer shell. The crude oil so obtained from the pressing will be
first clarified in a settling tank and then shall be pumped through the filter press.

The filtered crude ground nut oil will be pumped to the refinery where it shall pass through
three stages of refining: neutralization, bleaching and deodorization.

To reduce the level of free fatty acid (FFA) in the oil, caustic soda will be mixed with the
crude oil. The neutralized oil may have trace of soap which is a by-product of the
neutralization process. Therefore, the oil will be washed with water. It will then be pumped
to the bleacher in which it will be mixed with bleaching earth to improve the color of oil by
the process called adsorption. The bleached oil, after being filtered, will be pumped to the
deodorizer to avoid substances which are responsible for the odor of edible oil. In some
very small plant the three stages of refining crude oil shall be executed in a single vessel.
The plant requires a containment vessel for the collection and treatment of wastes to be
generated in the process.

Machinery and Equipment

The list of machinery and equipment of the project is indicated in Table 5.1. The total cost
of machinery and equipment is estimated at Birr 3 million, out of which Birr 2.55 million is
required in foreign currency.

.............................................................#######....................................................
.......................

Need Customized Feasibility Study or Business Plan for Bank Loan?

Ask for FREE project related details with our consultant/industry expert.

Our realistic project reports for bank Loan accompanied by a detailed financial plan
can make all the difference to get the funding you need.

Our consulting firm can prepare successful and standard project reports for
commercial agriculture, agro-processing, manufacturing and service enterprises as
per National Bank Standards.

Al lProject Feasibility Studies| Business Plans will be prepared by experienced certified

consultants and the market research and analysis are supported by computerized data
bank.

Standard Project Report - Map of National Bank of Ethiopia

A Standard project report for new business ventures is quite important in getting the
project itself off the ground. Therefore the project Feasibility Study report should be
prepared as per National Bank Standards.

The project report covers all the aspects of business; from analyzing the market,
confirming availability of various necessities such as plant & machinery, raw materials to
forecasting the financial requirements. The project also provides sectoral information, brief
on Government policies and international scenario, which have some bearing on the
project itself.

The scope of the report includes assessing market potential and investment decision
making. in a very planned manner by formulating detailed manufacturing techniques and
forecasting financial aspects by estimating the cost of raw material, formulating the cash
flow statement, projecting the balance sheet etc.

A SWOT analysis is often carried out in the initial reports. This helps to identify the
strengths, weaknesses, opportunities and threats of the business or a project.

The project so formulated considering the below-mentioned aspects and submitting

to any bank for availing credit facility for establishment of the project. The bank will
then examine the project for its technical feasibility, financial viability and
bankability.

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Auditing Financial Statements

Preparation of Successful Business Plans | Feasibility Study,
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PROJECT REPORT TABLE INDEX.

Each ‘Haqiqa Business Solution’ MARKET OVERVIEW CUM DETAILED TECHNO
ECONOMIC FEASIBILITY REPORT (Complete Report) tentatively covers.

1. Executive Summary
2. Product Description and Application
3. Market Study

Present Demand and Supply

Export & Import Statistics Data
Projected Demand
Names and Addresses of Existing Units (Present Manufactures)
Pricing and Distribution

1. Technical Study

Plant Capacity and Production Program

Availability and Source of Raw and Auxiliary materials
Material Requirement and Cost
Electrification, Electric Load and Water
Location and Site

1. Technology and Engineering

TECHNOLOGY
Production Process
Machinery and Equipment
ENGINEERING
Construction Process
Civil Engineering Cost
Plant Layout

1. Human Resource and Training Requirement

Human Resource.
Training Requirement

1. Economic and Social Benefit and Justification

Profit Generation
Import Substitution and Foreign Exchange Saving
Employment and Income Generation
Environmental Impact

Financial Analysis details as under:

10. Underlying Assumption

11. Initial Investment Cost
12. Production Cost
13. Sources of Finance
14. Financial Evaluation:
Break-Even Analysis and profitability analysis
Simple Rate of Return
Internal Rate of Return/IRR and Net Present Value/NPV
Sensitivity Analysis

Annexure-Financial Statements will be for 5 to 10 Years:

Annexure:: Net Working Capital

Annexure:: Projected Cash Flow
Annexure:: Discounted Cash Flow
Annexure:: Projected Income Statement
Annexure:: Projected Balance Sheet
Annexure:: Loan Amortization Schedule
Annexure:: Project Implementation Schedule

____________________________________________________________
___________________________________________________

You should not miss:-

Feasibility Study

Get In Touch//

Suleman Mossa General Manager

Mobile = +251 944-22-82-55

WhatApp, Telegram, imo and Messanger Contact = +251 944-22-82-55

Piazza, Kelifa Business Center Office No.507 Addis Ababa, Ethiopia

E-mail: haqiqa2000@gmail.com

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Suleman Mossa | June 14, 2021 at 10:23 pm | Categories: Feasibility Study | Business Plan and Project
Profiles | URL: https://wp.me/pcw0UU-sX

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