1.

Executive Summary

Evergreen Agro-Processing is a relatively new medium scale company that is in its start-up
phase. We are on the brink of penetrating a lucrative market in a rapidly-growing economy.
The ongoing Agricultural Reforms policy of the Federal Government (such as the cassavabread initiative) has once again made agriculture and agri-business (especially processing of
agricultural produce) a viable area for both local and foreign investment. Evergreen AgroProcessing seeks to tap into the huge opportunities existing in the agriculture/agribusiness
sector of the Nigerian economy, occasioned by favorable government policies by going into
the processing, packaging and marketing of viable cassava products.
Initial plans are to start with the processing and packaging of cassava into garri. This will be
sold in different sized containers ranging from the 50kg packs to even small 2kg packs that
can be purchased by students. These products will be distributed through an extensive
distribution network. . Our products will be positioned very carefully. They will be of
extremely high quality to ensure customer satisfaction, supported by impeccable service to
our customers. Our primary goal will be to establish and strengthen our license to trade. Our
products will be produced in a hygienic environment with strict quality control, so that our
products will easily appeal to the consumer.
Market analyses shows that the market potential for these products is very huge, given the
heavy consumption of garri as a staple food among Nigerians and customers would prefer
neatly packaged food products with quality assurance as against the current method in which
garri is sold. Financial analysis shows that the company will have both a positive cash flow
and profit in the first year. Our marketing plan is to initially focus on the southwest region in
the first year of operation and then spread out to other regions of the federation through
factory expansion and aggressive marketing. We intend to implement a market penetration
strategy that will ensure that we are well known and respected in our respective industry. We
will ensure that our products' prices take into consideration customers budgets and that these
people appreciate the product and know that it exists, including where to find it. However
these prices will also take into consideration the cost of production and distribution so as to
ensure that we remain viable and operational. The marketing effort will convey the sense of
quality and satisfaction in every picture, every promotion, and every publication.
Evergreen Agro-processing Industries intends to provide the customer with more than just
traditional crops products. We intend to provide quality products that will not only be used to
their industrial production, but also encourage agricultural production and agro-processing
industrialization. Our customers are assured of products that have been produced using the
highest quality standards.

2.0

Background and History

Before the discovery of oil, agriculture was the main stay of the Nigerian economy. But with
the advent of crude oil on the Nigerian economic scene, the fortunes of the agricultural sector
steadily dwindled, and almost went into oblivion. However, agriculture still remains the
largest employer of labour in Nigeria, and accounts for about 32% of our GDP. The ongoing
Agricultural Reforms policy of the Federal Government has once again made agriculture and
agri-business (especially processing of agricultural produce) a viable investment area for both
local and foreign investment. One commodity that received major attention particularly from
government is Cassava which is produced all over the country and is a major staple food,
consumed as garri and fufu. The recent cassava bread initiative of the Federal Government,
which seeks to introduce a minimum of 10% cassava flour into bread making certainly
throws up new opportunities in the cultivation and processing of cassava tubers.
Nigeria today ranks as the worlds largest producer of cassava tubers, producing about 41
million tonnes annually. Cassava is produced all over the country, but more abundantly in the
southern and middle belt parts of the country and is widely consumed as garri and fufu.
3.0

Product Description

Our company will initially focus on the production and packaging of garri for local
consumption, with long term plans to diversify into other cassava products. Garri is a creamywhite or yellow granular flour with a slightly fermented flavour and sometimes sour taste. It
is made from fermented, gelatinised fresh cassava tubers. Garri is a staple food largely eaten
in Nigeria and other West African countries. People eat this popular staple food with different
delicious African soups. The soaked version of garri flour taken with coconut, bean cakes
(akara), beans pudding (moin-moin), groundnuts, or smoked fish, is another interesting
delicacy for many people, especially when taken with cold water and during hot periods.
Some even prefer to add evaporated milk and sugar to enjoy their soaked garri. Presently,
garri is produced in the rural areas (where cassava is grown) by the local women who still use
traditional methods. But this method is stressful and unhygienic which yields a toxic variant
of garri (with high cyanide content). This has reduced its acceptability and consumption
among the upper middle class and high class of society.
Our company will set up a modern processing plant for garri production, using new
processing technologies. This will eliminate the stress and drudgery in production, currently
experienced with traditional methods. Thus producing hygienic and healthier brands of
products that will appeal to all classes of consumers, and available at competitive prices.

4.0

Market Description

Current estimates suggests that about 7.7 million tonnes of garri is consumed annually in
Nigeria, which is equivalent to about 30.7 million tonnes of produced cassava. Current
demand for garri could be up to 12 million tonnes annually, but this amount cannot be
accomplished because of the stress and drudgery involved in traditional production. Using a
conservative price estimate of 100 per Kilogram of garri, the market for garri is presently
worth over 700 billion naira annually
4.1

Target Market

As garri is a major staple food in Nigeria (and West Africa), it is consumed by almost
everyone. From the rural areas to the urban towns and cities all over Nigeria. About 75% of
our population of over 160 million fall into the demand bracket for garri. Our target market
includes everyone, men, women, workers, students and so on. However, our products will be
packaged in different sizes to fit the purchasing power of our diverse consumers. This will
range from the 50kg packs to small 2kg packs that can be purchased by students.
4.2

Competition

The garri market is dominated by small retailers who buy directly from the local producers,
and sell in the open market. The strength of these retailers are their large market share and
relatively cheap prices. Their weakness however, is that the garri is usually contaminated
with dirt due to the crude production process and open air exposure in the market, leading to
poor quality products being sold. As there is presently no recognized brand of processed and
packaged garri in the market, entry into this market segment will give us an edge over the
traditional retailers and allow us to set the benchmark in the market.

4.3

Marketing Strategy

Our marketing strategy is to initially concentrate on the South-West region and immediate
environs in the first year of operation. This would allow us to test the market and make
necessary adjustment in any area of our operations before launching out nationwide. We
would create an extensive distribution network that will ensure that the product is available to
the consumer wherever and whenever he wants it. Our promotional strategy will involve
integrating advertising, events, personal selling, public relations and direct marketing.
Our strategy calls for the development of good working relationships with suppliers,
distributors and retailers to support our business. This will ensure that we are meeting their
expectations and also help them to meet ours.
We shall position ourselves as a quality manufacturer that strives to provide industrial
materials, agricultural promotion, agro processing reliability and a good image. We intend to
establish a good rapport with all the relevant stakeholders.
With time we intend to establish our presence on the World Wide Web, and take advantage of
the increasing social media awareness in the country, which will increase the knowledge of
3

our products to the various market segments we shall be targeting. Web presence is a natural
objective in reaching the appropriate potential customers. Well-done brochures, company
profiles and business cards often have a triggering effect on clients contemplating on ordering
our products. Hence this will undoubtedly generate increased sales of our products.

5.0

SWOT Analysis

We are in a highly lucrative market in a rapidly growing economy. We foresee our strengths
as the ability to respond quickly to what the market dictates and to provide quality products in
a growing market. In addition, through aggressive marketing and quality management we
intend to become a well-respected and known entity in our industry as time goes on.
Strengths

We are offering higher quality products produced with better processes and
technology as against what is presently in the market.
An aggressive and focused marketing campaign with clear goals and strategies
Our company shall have a professional, passionate, focused, goal-driven, and wellmotivated management team

Weaknesses

Lack of a reputation

A limited start-up financial base

Lack of clear-cut channels of distribution

Opportunities

Favourable government policy on agriculture and agri-business particularly cassava

production and processing.
A very large population with huge demand for cassava products especially garri.
Presence of export opportunities such as ECOWAS Free Trade Zone, and US
governments Africa Growth and Opportunities Act (AGOA)
Availability of cheap manpower and fertile land for cassava production locally

Threats

6.0

A change of government may lead to change in policy, which may adversely affect
the sector.
Inadequate infrastructure especially power supply would make business operations
difficult and increase cost of doing business
The present security challenge in the country would make market penetration
difficult.

Manufacturing Plans

We intend to set up our manufacturing plant in Ogun State. This decision is strategic because
Ogun State is the largest producer of cassava in the country, which gives us easy access to
raw materials. There is also a large pool of skilled and semi-skilled manpower that we can tap
from. There is also a well-established presence of food processing companies in Ogun State.
4

For a start, we intend to process up to 200 tons of garri annually (equivalent to 450 tons of
fresh cassava converted at 45% yield). Production will be 10 months in one year.

7.0

Future Plans

As the business grows, we intend to increase capacity by a minimum of 10% per annum or
higher, depending on demand. We will introduces new varieties of garri products (e.g. yellow
garri) to satisfy the taste of the consumer. We plan to introduce more nutritious, premium
variant of garri that is fortified with vitamin A.
We will examine the viability of other cassava products such as starch, ethanol etc., and
adjust our
As our sales increases, we plan to maximize the export potential of our products by taking
advantage of the ECOWAS Free Trade Zone and the US governments Africa Growth and
Opportunities Act (AGOA).

8.0

Financial Projections

The plan requires an investment of a little over 3 million. The initial fixed capital includes
factory construction, machinery and equipment, project vehicle, generator, office furniture
and equipment and a borehole for water supply.
8.1
General Assumptions
The financial evaluation of the business covers a only the first year of operations. The
calculations on production and finances in the report are based on the general assumptions
stated below:
-

8.2

8.3

Production will be 10 months in a year.

Revenue, raw material costs, transport, labour costs, packaging material costs and
utilities are projected over the years by 20%.
Other costs are projected at 15% annually.
Normal losses of 1% are assumed for high quality cassava flour Marketing/Distribution expenses are equivalent to 2% of sales.

Profitability Indicators
Return on Investment (Year 1) 54.7%
Return on Equity (Year 1) 136. 7%
Net Profit to Sales 11%
Gross Profit to Sales 15.7%
Profitability Index 2.3
Breakeven Point (Year 1) 49%
Payback Period 1.3 Years
INVESTMENT SCHEDULE
5

A. FIXED ASSETS:
Item

Quantity
1

Value ()
250,000

(b) Hammer mill/plate attrition

250,000

(c) Fermentation racks with press jacks

120,000

(d) De-watering racks with mechanical press

jacks

120,000

(e) Stainless Steel granulator with 7.5hp

electric motor

120,000

180,000

200,000

100,000

150,000

(a) Building

(f) Grinding machine with 7.5hp electric motor

(g) Stainless steel Garri Roasting Pot with 2hp
electric motor, fiberglass insulation, exhaust
pipes and stainless steel paddles. It can be
heated with gas, charcoal, firewood, palm
kennel shelves etc.
(h) Bagging machine
(i) 6.5KVA generator
(j) Project vehicle

Sub Total

1,100,000
2,590,000

B. Working Capital
Raw materials, labour, utilities, etc.

500,000
3,090,000

GRAND TOTAL
8.4 WORKING CAPITAL (DETAILS) MONTH
Item
Raw Materials
Labour
Administrative Expenses
Utilities
Transport
Packaging Material
Insurance
Repair and Maintenance

Total
Cost/Month
200,000
100,000
40,000
40,000
40,000
40,000
10,000
10,000

TOTAL

8.5

500,000

ESTIMATED REVENUE
Item

High Quality garri

Unit
Price/ Ton
( )
100,000

Quantity/
Month
200 tons

Less 2% Sales Expenses

20,000,000
1,200,000

Less 1% Flour Losses

600,000

Net Annual Revenue

8.6

Revenue
( )

18,200,000

PROJECTED CASH FLOW STATEMENT IN YEAR 1

Net Sales
Less: Cost of Goods Sold

18,200,000
2,912,000

Gross Income

15,288,000

Operating Expenses
Salary
and
labour

1,200,000

Utilities

750,000.00

Insurance

120,000.00

Sales Promotion

750,000.00

Delivery and Transportation

550,000.00
7

Miscellaneous
Total Expenses

Net Income Before Taxes

Less: Income Taxes
Net Income After Taxes

9.0

300,000.00
3,670,000

11,618,000.00
2,904,500.00
8,713,500.00

Conclusion

The above analysis clearly shows that the business is highly profitable and is worthy of
investment. Revenue projections will continue to increase as long as business fundamentals
continue to remain positive.