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ALH

KABIR Page | 1

SMALL SCALE
RICE
MILLING
Business Plan
Address: Along Bodinga Road Sokoto, Sokoto State.

HASKE PARBOILED RICE (TEL: 08061546926)


Table of Contents
BUSINESS OVERVIEW.............................................................................................................................3
EXECUTIVE SUMMARY...........................................................................................................................5
MY PRODUCTS AND SERVICES...............................................................................................................7 Page | 2
MY VISION STATEMENT.....................................................................................................................7
MY MISSION STATEMENT..................................................................................................................7
MY BUSINESS STRUCTURE.................................................................................................................7
ORGANOGRAM......................................................................................................................................9
ROLES AND RESPONSIBILITIES.............................................................................................................10
SWOT ANALYSIS...................................................................................................................................15
MARKET ANALYSIS...............................................................................................................................17
SALES AND MARKETING STRATEGY.....................................................................................................19
Marketing Strategy and Sales Strategy............................................................................................19
Sources of Income...........................................................................................................................20
Sales Forecast..................................................................................................................................21
FINANCIAL MODEL...............................................................................................................................23
LOAN AMOUNT...................................................................................................................................25
PUBLICITY AND ADVERTISING STRATEGY............................................................................................26
MY PRICING STRATEGY....................................................................................................................27
START – UP EXPENDITURE (BUDGET)..................................................................................................29
GENERATING FUNDING / STARTUP CAPITAL FOR TRICE RICE MILLS...................................................30
SUSTAINABILITY AND EXPANSION STRATEGY......................................................................................31
CONCLUSION.......................................................................................................................................32
Appendix.............................................................................................................................................33

HASKE PARBOILED RICE (TEL: 08061546926)


BUSINESS OVERVIEW

In spite of the oil, agriculture remains the base of the Nigerian economy,
Page | 3

providing the main source of livelihood for most Nigerians. Nigeria is the

continent’s leading consumer of rice, one of the largest producers of rice in

Africa and simultaneously one of the largest rice importers in the world. Rice is

an important food security crop; it is an essential cash crop for its mainly small-

scale producers. Rice generates more income for Nigerian farmers than any

other cash crop in the country. In 2008, Nigeria produced approximately 2

million metric tons of milled rice and imported roughly 3 million metric tons,

including the estimated 800,000 metric tons that is suspected to enter the

country illegally on an annual basis.

Rice milling is a very important process in post-production, as this is

when the husk and bran layers are removed to then produce edible white rice

that is free of impurities. However, milling of the rice is usually dependent on

the preference of the customers, which would invariably affect how many

millings processes the rice would have to go through.

Rice milling businesses have grown over the years and this is due to the

fact that rice is the staple food of most countries of the world and is eaten

almost every day and especially during special occasions. Fortunately, since

HASKE PARBOILED RICE (TEL: 08061546926)


there hasn’t been any alternative to rice, this is a business that would continue

to boom for a long time.

Page | 4
Even though most of the rice consumed in Nigeria is imported, however,

there is large rice farms where rice is harvested locally, thereby ensuring that

the rice can be milled locally.

The milling production is one that can help in employing several hands

that would help boost the economy and also help increase the per capita

income of those employed as Ill as their dependents. Even though this is a

profitable business to go into, it is also very competitive as more entrepreneurs

are seeing the benefit this sort of business poses as a worthwhile investment.

HASKE PARBOILED RICE (TEL: 08061546926)


EXECUTIVE SUMMARY

Alh. Garba Kabiru Parboiled Rice is a farmstead that is legally registered


Page | 5
and licensed in Nigeria. I am duly registered in Nigeria and have also carried

out all the local requirements needed from us.

My business location is at Arkilla Magaji Area Sokoto State.

 The following equipment

o 6 ton/day rice parboiler

o Destoner

o 1 ton/hour combined rice miller (CTNM15B Complete Set

Combined Rice Mill

o 1 Distribution vehicle

The services offered by Alh. Garba Kabiru Parboiled Rice includes

production of paddy rice and milling of paddy rice to produce pure rice grains.

Other products and services that are offered by us include the sale of the

rice hull, bran layers, rice germ as Ill as fine broken which are all by products

gotten from milling the rice.

HASKE PARBOILED RICE (TEL: 08061546926)


Due to the fact that the market is not only profitable but competitive as

Ill, I strive to always give quality service to My customers, this I do by listening

to their requirements and also passing along advices and tips that might best Page | 6

make them become better, while also listening for suggestions to improve My

business as Ill. My rice mill production business premise is at a location that is

convenient for My suppliers, customers as Ill as My employees to get to us.

I constantly seek for ways, by which My services can be improved, from

My milling machines and storage facilities to My customer services and even

My price rates. I also do not compromise on integrity as I adhere strictly to the

corporate culture at Alh. Garba Kabiru Parboiled Rice.

In increasing My customer retention, I are fully aware of the importance

of loyal customers and how they help grow the bottom line of a business. I

have several strategies in place for My loyal customers especially those who

help refer new customers to Alh. Garba Kabiru Parboiled Rice.

My customers will also be constantly informed of changes carried out as

Ill as receive tips from us as I plan on seriously engaging them.

HASKE PARBOILED RICE (TEL: 08061546926)


MY PRODUCTS AND SERVICES

Alh. Garba Kabiru Parboiled Rice is a business that aims to minimize cost
Page | 7
while maximizing profit and output.

The products and services that will be made available to customers include;

6 tons daily Rice Milling

Sale of Milled Rice

Production of Rice Bran as raw material for feed processing plant and

food supplements.

MY VISION STATEMENT

My vision is to become a dependable rice milling production plant in Nigeria.

MY MISSION STATEMENT

My mission is to deploy the best milling techniques in ensuring that My

customers get the best service from us.

MY BUSINESS STRUCTURE

I know how important My customers are, and so while I develop other

important strategies aimed at moving the farm forward, I will put My

customers first by ensuring that I provide a quality customer service that is

second to none.

HASKE PARBOILED RICE (TEL: 08061546926)


I intend to employ those with the right skill set and understanding of My

policies into these positions;

Page | 8
Rice Mill Production Manager

Accountant/Cashier

Quality Inspector

Machine Operators

Marketing/Store Manager

Security Guard

HASKE PARBOILED RICE (TEL: 08061546926)


ORGANOGRAM

Page | 9

Managing
Director/Owner

Rice Mill Production


Manager

Marketing /Store
Floor Supervisor manager

Security Guard

Quality Inspector Machine operators Cashier/Accountant

HASKE PARBOILED RICE (TEL: 08061546926)


ROLES AND RESPONSIBILITIES

Managing Director (Owners):

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 See to the day-to-day management of the business, which includes

direction, supervision and human resMyce issues; while carefully

contributing to the interest of the business.

 Responsible for ensuring that contracts with business partners and

clients are negotiated in favor of the business.

 Ensuring that the agreements and obligations of the duly monitored and

fulfilled according to the practice of the business

 Responsible in ensuring that bills, payroll taxes and salaries are paid

accordingly

 Responsible in ensuring the farm remains afloat with a healthy bottom

line

 Investment of cash assets that are short-term in nature with low credit

loss risk

 Responsible in ensuring that the financial affairs as Ill as the accounts of

the farm are up-to-date and accurate.

HASKE PARBOILED RICE (TEL: 08061546926)


 Responsible for the creation of farm policies, structure, vision, goals and

objectives as Ill as farm culture

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 Draft strategies that would move the farm forward and also remove or

modify strategies that aren’t working Ill

Rice Mill Production Manager:

 Oversees the staff and ensure that they follow farm guidelines and

policies

 Responsible for leaves and vacations

 Responsible for resolving complaints and issuing off queries

 Reports directly to the managing directors especially in matters that are

above his jurisdiction

 Responsible for ensuring that the mill runs efficiently

 Comprehends directives from the Managing Directors and translate

them to those below him as Ill as staff

 Evaluate employees based on their performance and progress from time

to time and now those bound for promotion

 Ensure that quality control is maintained

HASKE PARBOILED RICE (TEL: 08061546926)


 Ensure that the services are meeting up to customer needs and

requirements

Page | 12
Accountant/Cashier:

 Responsible for ensuring that invoices are booked into the right account

 Responsible for reconciliation of both cash and bank statements by

month end

 Ensures on-time payment of all invoices

 Ensures that cash is kept in a safe place and know the minimum and

maximum level

 Carries out accounting operations that relate to cash handling

 Ensures that the correct taxes are deducted and paid

Quality Inspector:

 Responsible for final inspection

 Corrects whatever faults are found during the milling process and

ensuring that the customer has a better finished product according to

the stated requirements

HASKE PARBOILED RICE (TEL: 08061546926)


 Works with manager and floor supervisor to ensure that the customers

are satisfied always

Page | 13
Machine Operators:

 Prepares the machine before each procedure

 Runs the machine according to standard production procedures

 Responsible for trouble shooting light tasks such as machine breakdown

that might occur during production

 Responsible for cleaning the machines and ensuring that they are

recalibrated for the next task

 Ensures optimum efficiency of machine by monitoring the machine

during procedure

 Ensures that regular maintenance is carried out

 Provides relevant information regarding machine to floor supervisor

Marketing/Store Manager:

 Carries out store operational requirements

 Responsible for store staff by disciplining, coaching, monitoring as Ill as

appraising work ethics

HASKE PARBOILED RICE (TEL: 08061546926)


 Markets the products to customers

 Works hand in hand with the Manager


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 Ensures that store is Ill ventilated and clean

Security Guard:

 Ensures the facility is secure at all times

 Scrutinizes incoming and outgoing vehicles

 Submits security report regularly

HASKE PARBOILED RICE (TEL: 08061546926)


SWOT ANALYSIS

A rice mill production business is a capital and labor-intensive business,

and so require huge sums. My awareness of this fact has created in us a Page | 15

resolve to ensure that the business becomes profitable and breaks even in its

second or third year. This is where My experience comes to bear and separates

us from newbie entrepreneurs that have no knowledge of the business.

The SWOT analysis conducted with input from an external consultant for

My Alh. Garba Kabiru Parboiled Rice Business is as follows;

Strength:

Alh. Garba Kabiru Parboiled Rice is strategically located close to several

large rice farms in Sokoto State; the location is regarded as strength because of

the convenience to several strategic customers. My location is right in the

town of Sokoto Metropolis at Arkilla Magaji Area which is also another strong

advantage over My competitors as this gives us a direct link to My customers

and suppliers.

Weakness:

My perceived weakness stems from the fact that I will be operating

regionally, and it could take a while for us to be seen as a national business

instead of a regional business.

HASKE PARBOILED RICE (TEL: 08061546926)


Opportunities:
Page | 16
I have very good rapport with the local rice farmers who will be the

major suppliers of the raw material for My milling plant.

Threat:

There are several threats that face every business and this is the

downturn of the economy as Ill as the arrival of close competitors to the

market.

HASKE PARBOILED RICE (TEL: 08061546926)


MARKET ANALYSIS

Market Trends
Page | 17
The fact that more rice farms are springing up locally, mostly due to the

special interest that the Nigerian government has in local rice production; has

seen more rice mills spring up all over the country to be able to meet the

demands of the rice farm owners. This has made the business become more

competitive as rice mills strive to leverage on every competitive advantage

chief of which is offering additional but related services as well as continually

improving on its customer service.

My Target Market

In carrying out a thorough research, I was able to site My business in

Sokoto due to the various rice farms in the state. The location also brings us in

close proximity to other states within the region where there are several rice

farms.

My Competitive Advantage

Due to the profit viability of this business, several rice mill production

businesses have sprung up not only in Sokoto but in other regions that are

close to offer a stiff competition as well. Sokoto has various rice milling

production plants as Ill as several others in other states that are close to it.

HASKE PARBOILED RICE (TEL: 08061546926)


One of My competitive advantages is in ensuring that I am strategically

located.

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Another competitive advantage I have is my vast experience.

Asides, from offering additional but related services; I tend to employ

only the best hands to help run the business.

HASKE PARBOILED RICE (TEL: 08061546926)


SALES AND MARKETING STRATEGY

Marketing Strategy and Sales Strategy


Page | 19
My marketing strategy would be hinged on providing standard milling

production services as well as additional but related services to My customers.

I intend to cultivate a loyal customer base where I will not only increase My

customer retention but also attract new customers to patronize My services.

I intend to use My loyal customers to get new customers by deploying a

referral system that would see the customer get a discount or

recognition in return for referring new customers to us.

Other strategies I intend to adopt is in ensuring that I engage existing

and potential customers on My social media platforms, and also from

time to time give out tips and suggestions that will ensure that the

businesses of My clients improve.

I also intend to engage in massive publicity.

Introduce My business officially to rice farmers and large dealers in the

rice business both in Sokoto.

Ensure I open as many storage facilities as possible spread across several

strategic locations.

HASKE PARBOILED RICE (TEL: 08061546926)


Meeting and exceeding the expectations of My clients and through this

improving the performance of My brand.

Page | 20
Use attractive billboards and banners to ensure that potential customers

are aware of My services

Create awareness by passing out handbills and fliers and pasting same in

strategic areas

Ensure that I deploy the direct marketing approach

Make use of word of mouth marketing to increase awareness of My

existence and invariably My products and services

Sources of Income

Like every other business, Alh. Garba Kabiru Parboiled Rice was

established with the intention of making profit, in the agro-allied industry. This

means that generation of income via several sources is My top priority:

I intend to generate income by offering the following services listed below;

Rice Milling

Sale of milled rice by-products such as rice hull, bran layers, rice germ

and fine broken

HASKE PARBOILED RICE (TEL: 08061546926)


Sales Forecast

I know that having more customers translates to an increase in

generation of revenue. Page | 21

Asides having a good location, I intend to ensure that My machines and

other facilities especially that of storage is not only up to standard but also

continually revised and inspected by My external inspectors so that My

customers can continue to have faith in My business.

In critically analyzing the agro-allied and processing industry, and after

several researches and feasibility study, I have confidently come up with a

sales forecast that I feel isn’t extravagant and will moderately serve as a model

for us and My stakeholders. My several years of experience Ire brought to bear

in the sales projection as I am entitled to several information that is not

necessarily available to greenhorn entrepreneurs.

Below are the Net Profit projections for Alh. Garba Kabiru Parboiled Rice

that is based on several factors that relates to small and medium scale

enterprises in the rice milling sector in Nigeria;

First Fiscal Year-: =N=23,660,000.00

Second Fiscal Year-: =N=31,810,000.00

Third Fiscal Year-: =N=31,810,000.00

HASKE PARBOILED RICE (TEL: 08061546926)


The projection done above is strictly based on all factors being equal

such as stable economic growth and lack of strong competitors offering same

services and products with same location. My sales forecast is averagely Page | 22

moderate with a 20% expansion rate per consecutive year and stakeholders

must be warned that depending on how factors change, projections might

increase or decrease.

HASKE PARBOILED RICE (TEL: 08061546926)


FINANCIAL MODEL

PARTICULARS 1st Year 2nd Year 3rd Year 4th Year 5th Year Total (N)

Production in 50kg bags of 9 9 9, 48000


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rice 9,600 ,600 9,600 ,600 600

           
-
Packaging bags
9,600 9,600 9,600 9,600 9,600 48,000
             
             
REVENUE            

Sale of each bag of rice @ ₦134,400,000.00 ₦134,400,000.00 ₦134,400,000.00 ₦134,400,000.00 ₦134,400,000.00 ₦672,000,000.00
N14,000
  ₦ ₦ ₦ ₦ ₦ ₦
- - - - - -
TOTAL REVENUE ₦134,400,000.00 ₦134,400,000.00 ₦134,400,000.00 ₦134,400,000.0 ₦134,400,000.00 ₦672,000,000.00
0
             
DIRECT PRODUCTION            
EXPENSES

Cost of obtaining and ₦ 96,000,000.00 ₦ 96,000,000.00 ₦ 96,000,000.00 ₦ 96,000,000.00 ₦ 96,000,000.00 ₦ 480,000,000.00


processing raw material
(rice) @ N10,000 / bag
Cost of packaging (bag, ₦ 4,800,000.00 ₦ 4,800,000.00 ₦ 4,800,000.00 ₦ 4,800,000.00 ₦ 4,800,000.00 ₦ 24,000,000.00
lamination and sealing) @

HASKE PARBOILED RICE (TEL: 08061546926)


N500/bag
            ₦ 0.00
TOTAL ₦100,800,000.00 ₦100,800,000.00 ₦100,800,000.00 ₦100,800,000.0 ₦100,800,000.00 ₦0.00
0
             
OPERATIONAL/RECURRENT           Page
  | 24
EXPENSES

Distribution vehicle 900,000 350,000 350,000 350,000 350,000 2,300,000


6 Staff Salary 1,440,000 1,440,000 1,440,000 1,440,000 1,440,000 7,200,000
(20,000/head/month)
CTNM15B Combined rice mill 1,500,000          
(1 ton/hr Combined Rice
Mill)
Locally Constructed 6 4,580,000          
Tons/day rice parboiler
Destoner 920,000          
Miscelaneous / Running 600,000 600,000
Expenses - - - -
Loan Servicing per annum 1,988,000  
1,988,000 1,988,000 1,988,000 1,988,000
TOTAL 9,940,000 1,790,000 1,790,000 1,790,000 1,790,000 17,100,000
             
EXPENDITURE/ ₦110,740,000.00 ₦102,590,000.00 ₦102,590,000.00 ₦102,590,000.00 ₦102,590,000.00 ₦521,100,000.00
PRODUCTION COST

NET PROFITS ₦23,660,000.00 ₦31,810,000.00 ₦31,810,000.00 ₦31,810,000.00 ₦31,810,000.00 ₦150,900,000.00

HASKE PARBOILED RICE (TEL: 08061546926)


Monthly loan ₦
payment is 165,666.67
calculated
thus:
ASSUMPTIONS: 1. That the plant 2. That the plant 3. That a bag of 4. That
works only 5 works only 4 days rice depreciates production was Page | 25
hours a day. a week to allow to #14,000 per not increased or
for days of raw bag. expanded for the
material shortages first 5 years.
or holidays)

LOAN AMOUNT

The total amount required for the full implementation of this business plan is highlighted in green

in the table containing the financial model above and it amounts to a total of about N9,940,000.00

(nine million, nine hundred and forty thousand naira only).

HASKE PARBOILED RICE (TEL: 08061546926)


PUBLICITY AND ADVERTISING STRATEGY

I have several strategies in place that is aimed at increasing the


Page | 26
awareness of My rice mill production farm in the minds of my customers. I

intend to use conventional and non-conventional means of promoting Alh.

Garba Kabiru Parboiled Rice.

I know how important it is for my immediate customers to accept my

rice mill and then ensure it is the preferred go-to mill for their rice products.

While I intend to carry out some of the publicity strategies myself, I

realize that to be able to fully put in my best efforts into the business, I would

likely hire a consultant that would help us come up with and deploy the

strategies that have been deemed effective.

Some of the publicity and advertising strategies that I intend to deploy

for My Alh. Garba Kabiru Parboiled Rice include;

Create awareness amongst rice farmers by visiting rice farms

Using My social media platformsto educate the public on the benefit of

milled rice and the various stages involved

Engage in community related programs especially those that would

target the youths

HASKE PARBOILED RICE (TEL: 08061546926)


Distribute My fliers in target areas and paste My handbills in

conspicuous strategic locations

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Ensure that I place billboards in and around strategic points in Sokoto.

MY PRICING STRATEGY

My pricing rates will not be done in isolation, as I would check what is

being offered by my nearest competitors and ensure that I peg my prices

around what is obtainable especially if the pricing is fair, this way I would not

unnecessarily create a price war.

Finally, my pricing will also take into account what my cost of production

as well as overhead is; this is so that I do not run the business at a loss. I

however, would strive to ensure that I minimize cost.

Payment Options

I intend to adopt a payment policy that will cater to all the classes of

customers that will patronize us at Alh. Garba Kabiru Parboiled Rice.

Listed below are the payment options that Alh. Garba Kabiru Parboiled Rice

will make available to its customers;

 Cash payment

 Point of Sale (POS) Machine payment option

HASKE PARBOILED RICE (TEL: 08061546926)


 Payment via bank transfer

 Payment via check


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 Payment via online bank transfer

The banks with whom I have partnered with for My rice mill production

business is one that will ensure that customers have a smooth time during

payment without unnecessary stress. My bank accounts will be available on

request.

HASKE PARBOILED RICE (TEL: 08061546926)


START – UP EXPENDITURE (BUDGET)

My start-up expenditure cannot then be compared to those who intend


Page | 29
to start on a large scale, having a large facility and several machines and also

employing several hands.

Costs of the machine and tools to be used are usually the same with few

cost difference in-betweens which would depend on where the machine would

be coming in from (foreign country) or locally.

This does not mean that I cannot get the machine for fairly used from

other rice mill production plants; however, ensure that the machine is in a

good condition so that I don’t end up spending more to fix it up. Regardless of

all the above listed factors, there are several basic requirements that I would

need to fulfill to start my own rice mill production business;

From the above requirements, a description of the required capital is

illustrated in the financial model section of this business plan with detailed

implementation plan for the capital that would be needed in order to

successfully set up a standard small scale rice mill production plant in Sokoto

State. The amount also includes the salaries of all employees for the first year

of operations even though the business is estimated to be able to start paying

its staffs by the third month of operation from business proceedings.

HASKE PARBOILED RICE (TEL: 08061546926)


GENERATING FUNDING / STARTUP CAPITAL FOR TRICE

RICE MILLS

I have the sufficient experience to know how important finance is to any Page | 30

business either profit or non-profit. Without finance, an idea remains an idea,

and every entrepreneur worth his salt knows that to make an idea become a

reality, funds have to be sourced for.

Alh. Garba Kabiru Parboiled Rice is a business that would rather intend

to lend a huge amount of the equity instead.

Some of the major areas where I intend to source for loans include;

Generating a certain amount from personal savings

Applying for loan from a commercial bank

Approaching willing investors

HASKE PARBOILED RICE (TEL: 08061546926)


SUSTAINABILITY AND EXPANSION STRATEGY

I have several sustainability strategies in place to ensure that My

business lasts as long as I want it to. My sustainability strategy is in ensuring Page | 31

that the right corporate structure and foundation are in place as this will

provide a guide to what I intend to achieve.

I know that happy employees lead to more growth and productivity of

any business and so I will ensure that the welfare of my employees remain

paramount. I intend to ensure that employees are rewarded based on

performance and I also intend to share a certain amount of profit with My

management team.

I also intend to ensure that my customer retention strategy is high as I

know that my bottom line can only remain healthy if my loyal customers are

retained at a 90% rate. Asides, my customers, I also intend to ensure I invest in

the business continually and moderate My expansion so that I do not grow and

spiral out of control.

Once the above factors are put in place, I am sure to be able to not only

sustain and grow My business effortlessly but also expand the business as at

when due.

HASKE PARBOILED RICE (TEL: 08061546926)


CONCLUSION

The potential of full-auto Rice Milling Production Process is very high.

The physical location, proximity to market, closeness and good relationship Page | 32

with suppliers are good advantages necessary for an efficient conduction of

business. Based on My experience on Rice Milling, I therefore recommend the

following:

1. The Mill should be fully automated with the procurement of the

equipment listed in the financial model for efficient full utilization of the

Mill.

2. The rehabilitation of the Mill and associated structures is necessary to

establish full functionality of the Mill.

3. The establishment of an isolated power system separate from the

centralized power grid of the entire farm stead is necessary to

judiciously utilize the proceedings from the rice processing section and

to avoid wastage of resources.

All these guarantees sharp increase in productivity and quick returns on

investment.

HASKE PARBOILED RICE (TEL: 08061546926)


Appendix

CTNM15B COMBINED RICE MILLING MACHINE


Page | 33

HASKE PARBOILED RICE (TEL: 08061546926)

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