Greenhope Agro Resources Ltd

Contract Farmers, Aquaculturist, Processors and Exporters RC: 667147

165 Akowonjo Road Dopemu Lagos (Suite 25B)
Phone: 08020394888
Email: businessreportng@yahoo.com

Date: 02-08-2016

Business Proposal: Cultivation of high yield improved cassava variety in Ekiti

State for sales and industrial uses.

Cassava is one of the most popular and widely consumed food crops in Africa. Because it is such
an important food in the region and an extremely versatile crop, it is commonly referred to as
cornerstone of food security in Africa. The competing needs for cassava cut across both human
and animal consumption. It is fast becoming a popular raw material in industrial production and
is now a preferred material for making biofuels.
Gari (also Garri or tapioca) is the most widely traded processed cassava product. It is estimated
that more than 75 percent of the cassava produced in Africa is processed into gari. As a result,
gari prices are often a reliable indication of the demand and supply of cassava.
However, the price of cassava and its derivatives have increased sharply in the past few years.
The population explosion in Africa has made it difficult to produce enough cassava to feed many
common Africans. In addition, the raging economic growth of China has made it the largest
buyer of African cassava, which it uses to feed livestock (cattle, pigs etc.). China is currently
responsible for more than 60 percent of global cassava consumption, and is still buying more
from Africa (especially Nigeria)! Combine the growing profile and demand for cassava as a
source of biofuels and it becomes very evident that the future demand and prices for cassava is
headed for the skies.
The estimated value of the global cassava trade is in excess of US$100 billion annually.
However, Thailand, Brazil and Indonesia dominate the international trade in cassava. Despite its
favourable climate, fertile soils and cheap manpower, Africa is yet to fully exploit the huge
returns from the global cassava trade.
The Nigerian cassava is better when compared with those from Asian countries. Nigerian cassava
has higher starch content with better quality in terms of colour, the moisture content is lower than
others, and these are the features that endeared our cassava chips to the Chinese and the world
market. The Chinese are willing to bring as many empty ships to clear our stock and they are
ready and willing to undertake FOB arrangement.
As a matter of fact, from available projections, cassava based product will form the bedrock of
Nigeria's industrialization, if the current Federal Government initiative on cassava is sustained
and carried to its logical conclusion.

MARKET
Market abounds locally and internationally for the consumption of cassava produce, with an
estimated world-wide annual revenue of more than USD $100bn and with an annual growth rate
of between 5-6 percent earning from cassava and its by-products, which includes Millennium
Gel Fuel, is set to displace that of oil revenue.
1. Starch Consumption Survey
A National consumption of about 480,000 tons per annum valued at $26 billion per year with
industry spread as follows
1. Textile 140,000 tons Native/Modified Starch
1. Soft Drinks 170,000 tons HFSS (modified)
2. Food 80,000 tons MSG (modified) Nature
3. Packaging 51,000 tons Dextrin.
Products Made From Cassava
Cassava roots are also processed into:
==> Cassava flakes popularly referred to as Garri
==> Cassava flour can be eaten as Elubo Lafun or used in the bakery industry for the production
of bread.
==> Starch for industrial and pharmaceutical use
==> Glues and adhesives
==> Chips, ethanol and glucose syrup.

ETHANOL GRADE FLOUR DEMAND

CURRENT DEMAND
1. Industrial/Potable 450,000 tons
FUTURE DEMAND
2 Gel Cooking fuel 9,125,000 tons
3. Fuel Grade 4,750,000 tons
2. Cassava Flour
In line with the Federal government's Fiscal Policy during Obasanjo cassava commercialization
that makes Blending of 10% cassava flour with wheat flour mandatory from January 1, 2005 and

late last year, President Goodluck Administration increased the blending of cassava flour with
wheat flour to 40% saving Nigeria government N200 billion naira in less than one year on wheat
import and this is another huge market for cassava.

COMPETITIONS
Presently, there is very little cassava process industry in Nigeria apart from the usual Gari
industry; this makes it a good point for entering into the business.
In order to control reasonable size of the market, the enterprises shall engage in competitive
pricing and shall also establish a strong distribution network that will ensure the efficient
distribution of its products ahead of that of its competitors.
POSSIBILITY OF SUCCESS
Giving the large market, existing enterprise product and excess demand in the cassava industry it
is hoped that the enterprise will prove a sounding success.
THE CUSTOMER
The customers of the business are mainly small and big business or corporate bodies. Thus the
target market of the enterprises shall be corporate bodies and small business.
TARGET MARKET SPECIFIED
Flour Mills
Biscuits & Confectionaries
Pharmaceutical Industries
Ethanol Distilleries etc.
Export Market
High Local Demand for Garri
MARKET GROWTH
Current estimated market size for Nigeria alone is $2.8bn annually. This market is estimated to
grow at between 5 8% annually and because of the sudden high demand on cassava for
industrial purposes , the effect have reflected on garri because processors hardly get enough
tubers to produce garri at cheaper price and farmers prefer to sell to factories or export for
foreign exchange gains.

Feasibility Study and Cost Estimate per hectare (15 plots)

(a)

Preparation of Land

1.

Leasing per hectare for cassava

N 5,500

2.

Use of chemical for weed control

e.g. herbicide (4 liters per hectare at N2,500 per liter)

N10,000

3.

Labour for spraying herbicide

N 5,000

4.

Ploughing

N 6,000

5.

Harrowing

N 5,000

6.

Rigding

N 5,000

7.

30 liters for each farm operation e.g. plough, harrow and ridge
=

N20,900

at N500 per bundle

N30,000

9.

Transportation from (IITA-Ibadan) to Ado Ekiti

N15, 000

10.

Labour for planting one hectare

N 6,000

11.

Second herbicide after planting

(4 liters per hectare at N2, 500 per liter)

N10, 000

12.

Labour for spraying of herbicide

N 5,000

13.

Application of fertilizer (4 bags per hectare at N5, 000 per bag)

N20, 000

14.

Transportation of fertilizer

N 3,000

15.

Labour for applying fertilizer

N 6,000

16.

Hand weeding after 3 months

N20, 000

17.

Final Hand weeding after 5 months

N20, 000

18.

Miscellaneous/logistics

N 7,400

is 90 liters at N230 per liter

(b)
8.

Planting
60 bundles of improved stem from IITA Ibadan per hectare

Total Cost

N200, 000

Product Expectation /Profit Analysis.

Production yield

= between 30-40 tons per hectare in 10 months

Sales

= Between N20, 000 N25, 000 per ton

Break even = 40 tons x N20, 000

= N800, 000 (Eight Hundred thousand naira per hectare)

Net Profit = N800, 000 N200, 000 = N600, 000

The profit margin per hectare is N600, 000 minus cost of production per hectare and the higher
the hectares the higher the profit margin.

Andy Ochumba
CEO Greenhope Agro Resources Ltd
08020394888