CHAPTER ONE

INTRODUCTION
1.1 DESCRIPTION The Federal Institute of Industrial Research, Oshodi (FIIRO) is a parastatal research institute founded by the Federal Government of Nigeria in 1956. It is a semi-autonomous institute under the aegis of the Federal Ministry of Science and Technology. The foundation of the Institute dated back to 1953 when an economic mission was that industrial research activities in Nigeria were diffused and uncoordinated with no definite direction. Consequently, a decision was reached to set up The Institute of Applied Technical Research The minister of the then Federal Ministry of Commerce and Industry inaugurated it in 1956. In February 1958, the institute name was changed to Federal Institute of Industrial Research. The objectives of the Institute are majorly to being our local technology to the small scale industries which mostly depend on exporting of technologies of developed countries of the world. Some of the objectives of FIIRO are to assist in accelerating the industrialization of Nigeria through funding industrial utilization for the countrys raw materials and upgrading of indigenous production technique. The property occupies a fairly rectangular parcel of land with frontage facing the road (Blind Centre Road) linking the Agege
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motor road. The whole premises are surrounded by block wall fence except the frontage where the block wall is intercepted with perforated block wall. This covered with two leaved iron gates. The pilot plant is a function of FIIRO The type of activities carried out includes processing of cassava tubers to its products and processing of bottled palm wine. 1.2 LOCATION

The property is located along Blind Centre road linking to Cappa bus stop, which is an off shoot of Agege motor road, Lagos State. It can be accessed either through Oshodi or Mushin. The following sketches shows Fig 1: Fig 2: Location plan of the property Block layout of the institute, within which is

located the pilot plant. It shows the admin block, Analytical/Food research block, Security post, power house. The pilot plant is adjacent to the Admin block.

Fig 1:

Location Plan of Property

Fig. 2: 1.3 PURPOSE

Layout of Pilot Plant Section

The purpose of this report is to determine the current market value of the property for financial purpose. 1.4 SCOPE

This report cover properties at the pilot plant section of the institute only. The condition of the assets and standard of repairs and maintenance work done to keep the plant and machinery in good operating condition is considered. However, the valuation does not include spare parts, stock of raw materials, finished goods and good will. There is no consideration for services which are general to the entire establishment.

CHAPTER TWO
THE PILOT PLANT As stated earlier, the section is committed in the research, development and processing of cassava tubers to its primary products, such as the production of fufu flour, gari, cassava starch etc and bottling of palm wine. A separate room is given for the production of the latter. Different equipment such as (mixer, pasteurizer, grater, pulping device, granulator etc) are engaged for the activity. The equipment are arranged and centralized in the large room with exclusion of mixer, pasteurizer, corker, centralized at the palm wine production room. For instance, in the case of processing of detoxified cassava flour used as 10% composite cassava flour for baking of bread and other confectionaries. The operation starts from sorting of the cassava roots and ends with the packaging of mill-sieved flour. 2.1 Sorting:- The sorting is done by visual assessment, good roots separated from bad ones. It is done on open floor of the plant by group of technical staff. 2.2 Weighing:Avery heavy duty measuring scale

centralized weighing the

in the plant is used to carryout the activity of accepted tubers.

2.3

Peeling:- It is carried out by group of technical staff. They engaged in manual peeling of the tubers on open floor.

2.4 for

Grating:- A grater strategically located in the plant is used this activity. The essence is to reduce the sizes of the roots to ease further production processes.

2.5

Detoxifying:-

A detoxifier located in the plant is used to

remove the hydrogen cyanide content of the grated tubers. 2.6 Dewatering:- The process is accomplished by either the screw press or the hydraulic press strategically located in the plant. The essence is to remove the water present into an appreciable level prior to drying. 2.7 in 2.8 are Granulating:- A granulator is employed to increase the surface area of the cake thus aiding rapid heat-transfer rate subsequent operation. Drying:- A rotary dryer centralized in the plant is used for this operation. The wet granules of detoxified cassava cake dried to reduce the moisture content for the purpose of not creating room for spoilage of the product. 2.9 Milling:- A FOBA Universal hammer mill is used for this purpose. It also located in the plant. The essence is to mill the product to meet the requirements for blending with wheat flour.

2.10 Sieving:- A 200 250 microns mesh is used to separate fibres from the flour. 2.11 Packaging:The activity is carried out manually. The

sieved flour is collected and packaged in bags. 2.12 Construction The pilot plant building construction is of solid concrete block wall rendered smooth and painted both internally and externally. The flooring is of mass concrete with cement screed finished trowelled smooth. The windows are of double leaf panel and the roof to the building is of corrugated iron sheets nailed to timber trusses.

CHAPTER THREE
VALUATION OF PLANTS MACHINERY AND MOTOR VEHICLE 3.1 CONDITION

Most of the equipment and the building are generally in good state of repair and maintenance. However, a structural survey of the buildings nor the wood work/steel work and other parts of the building were considered. Most of the plants and machinery are being well serviced to keep them in state of good repairs for optimum performance as the date of inspection. 3.2 SERVICES

Electricity and water are important requirement for continuous operation of the pilot plant. While power generating sets are installed to supplement supply from the public mains. Boreholes are sunk complete with ancillary fittings for storage and easy distribution. Soil and waste water drain into the septic tank and soak away pit are located within the premises. 3.3 BASIS OF VALUATION

The basis of valuation is the open market value of the assets in their existing use determined by the Depreciated Replacement Cost Approach.

3.4

COMPUTATION

The current existing (EUV) user value was determined for each of the equipment and the depreciation model employed was the straight line method. For instance, SCOTMEC Grating Machine Year of Purchase Useful Life (UL) Scrap Value (Sv) Gross Replacement Cost (GRC) Depreciation = = GRC Sv UL N40,000/yr = 20%/yr. = = = = = 1990 Nil 20 years N800,000 800,000 0 20

Depreciation rate up to no of years used (Dk) Dk = = N40,000 x 15 years of use N600,000 = GRC Dk

Depreciated Replacement Cost = = Hence, DRC = EUV = N200,000

N(800,000 600,000) N200,000

Due to the depreciation in the exchange rate of Naira to Dollar, therefore the current value = = N340,000 N200,00 x 1.7

Similar computations were done for the rest of the items.

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CHAPTER FOUR
RESULT AND DISCUSSION I am of the opinion that the open market value of the assets of Federal Institute of Industrial Research was at the region of N89,341,516.50 (Eighty-Nine Million, Three Hundred and FortyNine Thousand Five Hundred and Sixteen Naira Fifty Kobo). The value of the plants and machinery was in the order of N8,312,953 (Eight Million, Three Hundred and Twelve Thousand Nine Hundred and Fifty-Three Naira) and the vehicle was in the order of N1,830,400 (One Million Eight Hundred and Thirty Thousand Four Hundred naira) as at the date of the valuation. Valuation was based on the following assumptions.

That the property was vacant and to let as at the date of valuation. That the plants and machineries were put in the market for sale in their present condition as at the date of valuation.

The table below shows the inventory of the plant and machinery, equipment and motor vehicle with the inclusion of their useful life, existing use value as calculated under the computation.

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CHAPTER FIVE
CONCLUSION AND RECOMMENDATION Base on the estimation of data gotten from the market value of the business, it can be deduce that the Federal Institute of Industrial Oshodi (FIIRO) has a very good financial statue and that with adequate and regular maintenance culture if continually adopted will keep the machinery in the best optimum condition at every point in time.

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