A COMPREHENSIVE FEASIBILITY

STUDY ON THE
PRODUCTION OF FRESH FRUIT
JUICE,TOMATO PASTE,SARDINE
&CORNED BEEF PRODUCTION
AT AKANRAN, IBADAN

COMMISSIONED BY:
GLOBAL FOODBASKET GOLDEN INVESTMENT LTD
109, LANLEHIN COMPOUND, AKANRAN, IBADAN,
OYO STATE
TEL: 08073022405, 08027752568, 012139642
E-MAIL: segun.globalfoodbasket@gmail.com
globalfoodbasketenterprises@ymail.com
PREPARED BY:
RESERCH AND PROJECT DEVELOPMENT UNIT,
SOLUTION GALORE NIG LIMITED
NO 9, OLADEINDE AVENUE
ABA ALAMU, APATA, IBADAN. OYO STATE NIGERIA.
TEL: 08066242201, 08032227436, 08128798022
E-MAIL: transintru@yahoo.com.

AUGUST 2012
TABLE OF CONTENTS
PART I

Introduction and general information

1-5

A.

Introduction of the Project

B.

General Information on the Project

C.

Name of Firm/Scope and Objectives

D.

Location of Head Office/Factory

E.

History and Ownership of the Project

F.

Purpose and Scope of this feasibility Study

G.

Organizational Structure and Management

PART II

MARKETING SURVEY

6-8

A.

Introduction

B.

Trend of Supply and Demand of Fruit Juice

For the past five years

C.

Prospects of supply and Demand of Table water & 7

Yogurt In the next five years

D.

Competition for supply - Current and Prospective

E.

Marketing Programmes

7-8

F.

Annual Level of Output and Revenue from Sales

Projection.

PART III

TECHNICAL STUDY

A.

Description of Products and their uses

10

B.

Manufacturing Process

10

C.

Plant, Machinery and Equipment

- Requirements and costs

11

D.

Plant size and production schedules

12

E.

Factors favouring Plant Location

13

F.

Factory Building, Facilities and Costs

13

G.

Raw Materials- Descriptions, Current and prospective

Available and costs.

H.

Utilities

I.

PRODUCTION COSTS

14

(i)

Projected cost of Raw Materials inputs for 5years

14

(ii)

Projected Labour Requirements and Costs

15

(iii)

Projected factory and administrative overhead

16

(iv)

Insurance Cost

16

(v)

Evaluation of Depreciation Projected for 5years

16

PART IV

14

FINANCIAL STUDY

A.

Total Project Cost and Financing Arrangement

17

B.

Medium - Term Loan and Amortization Plan

17

C.

Manufacturing, Trading, Profit and Loss Account Projection

18

D.

Cash Flow N 000 Projection

19

E.

Balance Sheet Projection

20

F.

Profitability, Activity and Liquidity Ratio Projection

21

PART V OBSERVATION, CONCLUSION AND RECOMMENDATIONS

PART 1
A.

22

INTRODUCTION AND GENERAL INFORMATION

INTRODUCING THE PROJECT.

In the last decade, for health and religious reasons, there is a sharp shift from the

consumption of alcohol among the Nigerian populace to soft drinks, especially fruit juice of
every brand. As a result of well researched studies and detailed reports on the situation of the
nations agricultural products and their uses, the management of this project has resolved to set
up a tetra-park fruit juice and bottled water factory at Akanran area of Ibadan that is noted for
growing different type of fruits, Already, 54 acres of land has been acquired for factory site and
fruits farmland. Also contacts have been made with farmers for regular supplies of their fruit
products to the factory site when it is established.

The thrust of the production lines of the project, therefore are Orange juice, Mango juice,
Pineapple juice, Pearl apple juice, Guava fruit juice, Papaya pulp juice, Tomato Paste, Sardine
Sauce, Corned Beef and bottled water Sardine, Corned Beef . Apart from bottled water, these
products are extracted fresh fruits as well as natural fruit flavors, rich in taste, truly refreshing as
they are full of varing minerals and vitamins. In the processing of these products of which
advanced homogenization, batch preparation and pasteurization machines, plant and equipment
would be installed, excellent quality standards while maintaining their natural nutritional value
at the name time would be guaranteed.
This project is not planned in a narrow, short-visioned perspectives. Pre-operational
arrangements that would make it endure and break-even at a good time have been put in place.
For instance, as the utilized capacity of the plant has been scheduled high from the take-off of
the project, far-reaching arrangements have been concluded with fruits growing farmers in the
area of location and environ of the project for regular current and prospective supply of fruits as
raw materials to attain an uninterrupted flow of production. Besides, thousands of acres of
farmland for leaving by the company have been made. Also, arrangements have been made with
identified areas in Oyo state noted for fruits growing for regular supply.
The management is desirous to pursue dynamic policies thereby inculcating the sense of
belonging and commitment in workers. The management is conscious that every development
on human resources is of high dividend.
B.

GENERAL INFORMATION ON THE PROJECT.

From our interview of the chief sponsor and promotes of this project in the person of
engineer Adebayo to collect some vital information relating to the tectino cum socioeconomic reasons prompting the proposal of this project, we are able to draw these
salient facts:

(i)

Engineer Adebayo is highly committed to the success of the project, drawing his hingesight of experience from his employment with Coca-cola as an engineer for many years.
He no doubt has a good grasp of what the production of fruit juice entails and he has
done his home-work dutifully.

(ii)

This project is to be sited at Akanran in the Ona-ara Local Government area where
agriculture, especially fruit growing, is the vibrant mainstay of her economy. This factor
in essence guarantees the projects proximity to raw materials.
Already about 54 acres of land has been acquired for sited the factory as well as
establishing a model fruit farmland for local farmers to increase their fruits yields.
Arrangements are also in place with local farmers for cross-fertilization of ideas on fruit
growing sustained regular supply of fruits to the factory.

(iii)

Efficient and tested plant, machinery and equipment have been identified and their
manufacturers contacted for competitive price quotation, having reached an agreement
with them on the supervision of the installation of machines and the initial production
schedule.

(iv)

It is very evident that the proposed project would make some appreciable impact on
both the Oyo State and Federal Government of Nigerias industrial policy and objectives,
especially in the following areas:

(a)

In order to redness the distorted economy of the nation arising from the mono-cultural
exporting oil base, the Federal Government as a policy is interested in the growth of
domestic resource base for export and intermediate good, industries both for local and
export consumption. In this direction, this project is posed to market its fruit juice in the
neighboring ECOWAS countries.

(b)

This project stands as a channel for creating economics linkages among citizens, with
small and large industries, as well as creating employment opportunities.

(c)

This project is posed to promote and fulfill the import-substitution and value-added policy
of the Government and also the policy of rural integration and development.

(d)

It would assist to curb urbanization and its associated evil problems.

(e)

The project will increase marginally the real income of the residents of the local
Government, and the Oyo State in particular and average citizen of Nigeria as a whole in
general.

(f)

This project is in line with the government industrial policy of industrial backward
integration of our human and material resources through their effective and optimal use as
over 90% of raw materials for use are locally sourced.

(g) The project would help to maintain socio-economic order by reducing crimes arising from
the high rate of employment in the country.
C.

NAME OF FIRM, SCOPE AND OBJECTIVES.

Global Foodbasket Golden Investment Ltd has been duly registered with the Corporate
Affairs Commission, an agency of the Federal Government of Nigeria purposefully for
this project of fruits juice manufacture with registration No Rc 1041272 on the 14th day
of June 2012 with paid up shared capital of N1,000,000.00 at N1.00 per share.
One of the corporate objectives of the company is to embark on manufacturing activities
The company will also embark on their socio-economic activities highlighted in the
memorandum and Article of association whenever found feasible to do so.

D.

LOCATION: HEAD OFFICE/FACTORY.

The Head office and factory site of Global Foodbasket Golden Investment Ltd are both
located at Akanran, in the Local Government area of Ona-Ara.

HISTORY AND OWNERSHIP OF THE PROJECT

Engineer S. M. Adebayo is the main sponsor of this project under Messrs Foodbasket
Global Golden Investment Limited. In fact he is the visioneer of the project, and he has
many fulfillable dreams on the project.
Engineer S. M Adebayo is blessed with a wealth of experience in many fields.
On his completion of Mechanical Engineering Studies at the Federal Polytechnic Bida in
1992 and University of Ibadan in 1995, he was employed by the Leventis Group of
companies, starting with Nigeria Bottling Company-the producer of 5Alive from 1995-

2001 as Transport officer, reporting to the Transport Manager/Engineer Manager. From

here he was promoted to Assistant Engineer from 2001-2003.
Assistant Engineer.

Maintenance of all Machinery, technical equipment, plant and other machines as

instructed and under the supervision of an Engineer Manager.

Efficient repair work to fittings, structure which includes, fabrication, welding, burning.

Any other duties as required by the chief Engineer.

Assist with the maintenance and lubrication of all Machinery, technical equipment, Plant
as required by an Chief Engineer.

Engineer Manager. 2005

Ensure thorough maintenance of standard terms of execution, preventive of all machines

and Equipments.

Conduct mechanical diagnosis of bearing deterioration, poor gear assembling, kiln

adjustment/Alignment motor alignment.

Prepare start up for new equipment, monitor maintenance and integrate safety into all
maintenance.

Experience of liquid manufacturing operation day today trouble shooting/Preventive,

application of fail safe mechanism, through knowledge of spare part management and
facility and equipment validation along with utility validation and maintenance of
HYAC, Water system, Bioler etc.

Ability to mentor, motivate, educate and interact with people at all levels within the
organization

Experience in the application of both electrical and mechanical tools effective delivery

Knowledge of and experience in, all Health and safety requirements.

He eventually left paid employment to self-employment, engaging majorly in Agriculture. He is

an executive member of various Farmers Associations from where he caught vision of this
project, reflecting on his hindsight of his varied experiences in Nigeria Bottling Company (coca
cola).

Engineer Adebayo is a man of many parts. He is an agriculturist, an engineer, marketing

icon, an entrepreneurs.

F.

PURPOSE AND SCOPE OF THIS FEASIBILITY.

The purpose of this feasibility study is principally to highlight the profitability potentials

of establishing a modern, highly technology fresh fruits processing juice factory in the ready,
large and ever-growing market situation in Nigeria. It is also to examine the scope of viability
for its establishment from the scratch.
To achieve this, the study is to determine the profitability and the basis of viability of the
project investigating and analyzing the marketing, technical, managerial and financial aspects.
The management aspects relate to selecting the appropriate form of product processing
and business organization, designing the internal and the necessary skill and allotting
authorities, powers and methods of communication.
The Marketing aspects is ascertaining the current and prospective total demand for the
products, establishing the annual which it may sell, estimating the future selling prices and
designing the market programme for the project.
Technical aspects relate to selecting the type of production processes, plant rated
capacities, machinery design, plant location and other operating requirements.
It further aims to determine
(a)

fixed investment required

(b)

Manufacturing costs and expenses

(c)

Startup costs and expenses

(d)

Necessary structures and costs to be put in place.

The financial aspects highlight the financial analysis, quantifying the data derived

in both the marketing analysis and technical analysis into Proforma and projected financial
statements:- Statements of total project cost and possible funding arrangement, Amortization
plan for loan raised, manufacturing, Trading profit and loss account projection, Cashflows
relative to the projected time table, balance sheet, depreciation and insurance evaluation.

These statements serve as the basis for analysis and evaluation of the projecting terms of
its commercial profitability to make sufficient returns on investment, and cash generation to
service debts and protect creditors.

BOARD OF DIRECTORS FOR POLICY FORMULATION

Production
Manager 1

Administrative
Manager 1

Sales Manager I

Accountant I

Foreman 4
Company
Secretary
Machine Operators
30per 8 hrs shift
Maintenance

Salesmen

Store keepers 2

Nurse 1
Assistant 2
Store Clerks 4
Purchases Clerks 2

Clerks 4

Factory Labourers
10per 8 hrs shift of 2
Drivers 12
Farm workers 10
Permanent 150 Casuals

Messenger 2 Cleaners 2
Gardeners 2 Security Guards 8

PART II MARKETING SURVEY.

A.

Introduction.
Marketing is perhaps one of the most neglected aspects of management,

especially among Nigerian indigenous firms. The importance of marketing is hardly

appreciated which accounts for the common failures after recorded by these firms.
Marketing in its new conception is ably propagated by katler, levit, Drunker, to
mention a few, as an all organizational effort to determine the needs of the customer, meet
these needs at a price he can afford, and ensure the delivery of these needs to him, all at a
reasonable profit to the organization.
The important role of marketing as the first determining factor in the study of the
viability of a project is recognized in this survey by first appraising the trend of supply and
demand of fruit juices for the past five years, the market targets are established to assess the
market share- current and prospective of this project in its area of market dispensation, the
prospect of aggregate demands and supply for the next five years through analyzing
statistical data available from the Federal office of statistics, personal observation of socioeconomic activities as initiated by the government and response from interviews conducted.
B.

Trend of Supply and Demand of Fruit Juice for the past 5 years.
In the last decade which has firmly established civil rule, the dividend of

democracy is truly taking place whereby the standard of living of the average Nigerian is
improving. The consciousness of eating and drinking things that are resistant to any form of
disease is being heightened. Thus, since this time we witness companies producing fresh
fruit juices springing up. For instance in Ibadan alone we have 5 Alive, Funman Fresh Juices
adorning dinning tables of average high income earners throughout Nigeria, especially in the
cities like Lagos, Abuja, Kaduna, Portharcourt, Enugu, Onitcha, Kano and a host of other
cities in all the geo-political spread of Nigeria.

Before this time, the bulk of fresh Fruit juices in the country come through
importation and they were patronized principally by the cream of elites in the society, The
wind of change is now blowing, an average Nigerian, for improved health reasons is
desirous to patronize fresh fruit juices of any brand, if not at all times, but at any times he
can afford it. An average income earner in Nigeria takes joy in sharing the large pact of
fresh, fruit juice with members of his nucleus family.
The drinking of fresh fruit Juice by an average income earner has come to stay as a
welcome habit in Nigeria and it is prone to be sustained through thick and thin.
C.

Prospects of supply and Demand of Fruit Juice for the next 5 years
The momentum of an average Nigerian to patronize only made in Nigeria fresh

Fruit Juice of a brand has started and cannot be halted. Many people that can still not afford
this comfort, for health reasons are aspiring to reorder their choice of priorities to
accommodate what many now are considering the necessity of life the drinking of Fresh
Fruit Juice to promote good health. Perhaps except for the high rich Nigerians, imported
fruit juice is hardly known. This means in the foreseeable future, the Nigeria Market will be
ready to accommodate new made in Nigeria fresh fruit drinks while importation fresh fruit
drinks will fade off the market except for those few that have obnoxious taste.
With a high probability of many climbing the ladder of higher income class in the
improved socio-economics democratic climate. Demand for fresh fruit juice is set to rise
significantly. This new project is posed to have good share of the rise in demand as the
quality envisioned for its products are very high, rivaling the existing brands.
D.

Competition for Supply Current and prospective.

In Nigeria today, talking about Fresh Fruit Juices that have made their marks,

5alive, Chi vita, Fumman have become house-hold named. This project has been prepared
and geared towards beating the standard of these worthy competitors or at worst be at pared
with them. This accounts for the reason why very highly efficient and modern technological
plant, machinery and equipment have been selected for this project. For instance as one of
the special features of the machinery proposed for use is that all the cycles (Pasteurization,
Sterilization, drying, checking, controlling, cleaning) are fully computerized.

E.

Marketing Programmes.
Marketing programs are basically meant, the overall marketing strategy for

achieving the organizations marketing objectives. It consists of selection of market targets and
the development of appropriate marketing mix.
Marketing mix can be defined as that combination of elements which must be linked or mixed
together in a unique manner in evoking marketing strategy.
The elements of the marketing mix are product, promotion, price, place and service.
The components of each of these sub-marketing mix are as follows.
Product mix: has to do with quality, quantity, models, range, size, packaging and branding.
-

The Quality: The management of this project is set to adhere strictly to the standard set

by NAFDAC, International Standard Organization (ISO), Standard Organization Nigeria (SON)

and other regulatory bodies by making sure that quality fresh juice drinks are produce with
value, and that would be affordable by great number of people, than the product of competitors.
Special attention shall be paid to hygiene during processing in order to meet and surpass the
standard set by other competitors like 5Alive, Chivita, Fumman.
There is a plan to build a state-of-the-arts Laboratory where the suitability of all products
before and after processing would be ascertained.
-

Range and Size

The range and size of the drinks are mainly two-small and big sizes the small sizes are parked in
a carton 20%, the big one 10.
-

Branding, Labeling and Packaging.

Brand names for the fruit juices have been chosen but yet to be registered with the Federal
Government. The brand names are Vanilla Natural Orange Juice, Alphonso Mango Juice, Litchi
Pineapple Juice, Peal Apple Juice, Guava Fruit Juice, Papaya Pulp Juice and Crystal Bottled
Water.

Colour printing of labels to be designed here and put on cartoons.

Packaging: Brick-shaped carton, made of paper/AL/PE Laminated materials
Price Mix: This has to do with allowance and deals, distributors/wholesalers and retailers markups, discount, structures and price to adopt. For this project two grades of distributors would be
attached to grade A. Classification into these grades would be dependent on the volume of
purchases/distribution required, market size, amount of deposit paid, the level of facilities for
distribution and the available channels of distribution. Remuneration for services rendered
would be on agreed percentage of commission payable on total sales.
Place Mix: Ideally, the whole of Nigeria would be regarded as the area of market dispensation
and therefore, distributors from all parts of Nigeria would be welcome irrespective of their
geographical location through granting of increased selling prices in accordance to the worked
out distance from the factory site.
Promotion Mix: This involves advertising, sales promotion, personal selling and public
relations, Vigorous advert would be place on popular and widely circulated national dailies,
economics and business magazines, state-owned T.Vs and N.T.A. Stations in some States. The
distributors too would be encouraged to advertise on local T.V.s and news papers in their areas
of operation. Part of such expenses would be borne by the company through deductions from
sales returns.
Sales promotion would be enhanced through participation in well organized Trade favis
throughout the country and the company will in addition engage in product launching
occasionally.
Service Mix: Involves delivery and education in use. While the company would earmark some
vehicle for conveyance of raw materials and finished goods encouragements would be given for
self-delivery of products by purchasers.

Production capacities and Revenue projection

for 5years.

Table Page 9

PART III

TECHNICAL STUDY

DESCRIPTION OF PRODUCTS FOR MANUFACTURE AND THEIR USES.

The company is coming up into the market with six fresh brands of fruit juice drunks
Tomato paste, Sardine and Corned Beef namely: Vanilla Natural Orange Juice, Alphonso
Mango Juice, Litchi Pineapple Juice, Apple Juice, Guava Juice, Papaya Pulp Juice Tomato
paste, Sardine &corned beef production . These are drunks that are extracted and packed fresh,
retaining natural taste, nutritional value, rich in minerals and all form of vitamins which make
them highly medicinal to maintain good health.
These are drinks that adorn dining tables for every average income earner as consumer
see no health hazard in drinking them unlike some soft drinks which are perceived as harbingers
of some diseases sort of in view of some contents of sugar that are added. Such conceptions
range from pile, diabetes to hypertension. In fact medical prescriptions in many occasions place
restriction on the in-take of such drinks. Consumer prefer fresh fruit Juice in social gatherings.
The market cuts across all classes- lower, middle and upper but more in the middle and upper
segment of the society for affordability reasons.
Another line of production is bottled pure water, branded Crystal. The demand for
water is insatiable as it is in the priority need of everybody.
B.

Manufacturing Process
Fruit

Brush Washer

Scrape Hoiseter

Pulper M/c

Juice Tank

Grinder

Juice Tank

Screw Pump

Enzime Destroyer

Colloid

Screw Pump

Mix Tanks (2 pes)

Vacuum Degassing

Finished Tank

Aseptic Filling

Sterilization

Packaging machine (Tetra Pack in 250ml

standard, 250ml slim 200ml slim, 1lt) Packaging is brick-shaped carton, made of
paper/A1/PE Laminated Materials. Cartoon here is the unit pack of each type of drink.
This is a general processing flow for fruit juice extraction which can be varied with minor
addition or subtraction depending on the type of fruit. For instance, in the case of concentrated
mango Juice, and additional equipment of a concentrated pot must go with it.

The processing is automatic from one stage to the other. The machine operator will undertake
training to grasp the working of the machines
C.

PLANT, MACHINERY, EQUIPMENTS AND COSTS.

Sr

Description of pant, Machinery and

No

Equipment.

No Rqd

Unit Price

Proposed

Equivalence.

1
1
1
1
2
2
3
3
3
1
1
1
5
1
1
1
1
1
2
1
1
2
1
3
1
1
1

10,850.00
4,950.00
10,750.00
21,650.00
5,600.00
2,000.00
7,900.00
5,700.00
1,200.00
7,900.00
11,240.00
4,600.00
1,200.00
10,900.00
4,500.00
11,750.00
10,650.00
39,500.00
1,400.00
10,780.00
10,650.00
4,050.00
7,500.00
1,800.00
13,900.00
5,460.00

10,850.00
4,950.00
10,750.00
21,650.00
11,200.00
4,000.00
23,700.00
17,100.00
3,600.00
7,900.00
11,240.00
4,600.00
6,000.00
10.900.00
4,500.00
11,750.00
10,650.00
39,500.00
2,800.00
10,780.00
10,650.00
8,100.00
7,500.00
5,400.00
13,900.00
5,460.00
99,800.00

1,759,700.00
801,900.00
1,741,500.00
3,507,300.00
1,814,400.00
972,000.00
3,839,400.00
2,770,200.00
583,200.00
1,279,800.00
1,820,880.00
745,200.00
972,000.00
1,765,800.00
729,000.00
1,903,500.00
1,725,300.00
6,399,000.00
453,600.00
1,746,360.00
1,725,300.00
1,312,200.00
1,215,000.00
874,800.00
2,251,800.00
884,520.00
16,167,600.00

28

Invoice attached.
Tetra Pack/Packing m/c Model

141,700.00

141,700.00

22,955,400.00

29
30

BDLD 3600W
Complete set of filling M/C
Generating sets 500KVA

1
2

67,600.00
61,728.00

67,600.00
123,456.00

10,951,200.00
19,999,872.00

Apple, peal kiwi Processing Plant

and pineapple processing Plant

1.
2.
3.
4.
5.
6.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Surf Washer Conveyor

Crusher
Pulpier Machine
Screw Extractor
Feeding Pump
Juice Tank
Filter Machine
Buffer Tank
Screw Pump
Vacuum Degassing
Enzime Destroyer
Colloid Grinder
Centrifuge Pump
UHT Sterilization
Finished Tank
Brusher Washer
Scrape Hoister
Belt press
Juice Tank
Hammer Crusher
Enzime Destroyer
Mixture Tank
Caccum Degassing
Screw Pump
UHT Sterilization
Finished Tank
Complete set of Plant, Machinery
for processing Mango Juice see

31

(caterpillar)
Contingencies

C (B)

617,28.00
765076.00

10,000,000.00
123,942,432.00

Vehicle, Forklift, Trucks Requirements and cost.

Sr No

Description of Vehicles, E.T.C

No Qqd

Unit Price

Total Price N

1.

Cars

2,500,000:00

10,000,000.00

2.

Trucks 25 tons capacity

12,000,000:00

48,000,000:00

3.

Mitsubishi Canter - Pick-up

10

5,000,000:00

50,000,000:00

4.

Tractors- Styer

5,000,000,00

50,000,000:00

5.

Forklift- Caterpillar

7,000,000:00

14,000,000:00

Total

Dp

127,000,000:00

Plant size and Production Schedules

For the take off of this factory, it is scheduled to run 2 working shifts of 8 hours each for 300
working days in a year, allowing for Sundays and public holidays.
The Plant capacity of chosen machinery, plants and equipment is rated 3,600w filled containers
of fruit Juice per hour X 8hrs per shift and 16hrs per 2 shifts in a day one day. That is 28,800
containers per shift of 8hrs and 57,600 per 2 shifts in a day.
Please find in the table below the production schedule for the 6 fruit juice slated production.
Table 1

Projected Production Schedule of Vanilla Natural Orange Juice.

YEARS OF OPERATION EACH ESTIMATED AT 300 DAYS.

Details
1. Max. Annual Rated

1st Year
2nd Year
28,800,000 28,800,000

3rd Year
28,800.000

4th year
28,800,000

5th year
28,800,000

24,480,000 25,920.000

27,360,000

27,360,000

27,360,000

81,600

86,400

91,200

91,200

91,200

85%

90%

95%

95%

95%

Capacity in containers
250ml Standard,
250ml Slim and 200ml
Slim
2. Annual Utilized
Capacity
3. Daily Utilized
Capacity
4. % of Utilization

NB.

The same Operational capacity is scheduled for the other fruit Juices Alphonso

Mango Juice, Litchi Pineapple Juice, Pear Apple Juice, Guava Fruit Pulp Juice and Papaya Pulp
Juice.
Table II Projected Production Schedule of Crystal Bottled Water.
Details

1st year

2nd Year

20,000,000

3rd year

4th Year

5th Year

20,000,000 20,000,000

20,000,000

20,000,000

17,000,000 18,000,000

18,000,000

18,000,000

1. Max. Annual Rated

Capacity in container of
75ml
2. Annual Utilized Capacity
16,000,000

3. Dialy Utilized Capacity

4% of Utilization

60,000

60,000

60,000

85%

90%

90%

90%

53,330

80%

E.

56,660

Factors Favoring the Location of the Factory at Akanran, Ibadan.

These factors include the following:

(i)

Proximity to the source of raw materials - fruits. There is also available a vast expanse of
land to grow fruits of any type as well as encouraging farmers and potential ones,
especially the secondary school leavers to grow fruits for the companys ready purchase.

(ii)

Availability of Market: With above average income earners abundant in Ibadan, they will
avail themselves to these rich nutritive products and Ibadan is close to Lagos, Osogbo,
Ilorin and a host of other cities for marketing these products.

(iii)

Nearness to efficient and Qualitative labour. Highly skilled workers, especially

researchers that will keep the quality of these products at peak forms are available in the
many institutions of higher learning existting in Ibadan.

(iv)

The lack of efficient utilities in Akanran has been noted and provided for in the planning
of this plant.

F.

Factory Building, Facilities and costs

Already a 22 acre piece of land has been acquired by the sponsors to site the factory.
Also another 32 acres have been set aside as a pilot farmland. The cost of the 22 acres of land is
valued at about $7million and the 32 acres for plot farmland at $5million.
A factory building and all necessary facilities for administration, warehousing,
maintenance, site access and car packing requirements have been planned for and to cost $
12million-above) when fully completed. The building is expected to be constructed in such a
way that it will be durable, economical and functional and to include protection systems from
forklift and truck operations. The building is to have very flat, durable concrete floors for
different use of high-reach forklifts a fully piled up foundation system, an in-rack aspiration
smoke detection system, a 100% standby power facility, a self-sufficient treated water supply
from an onsite deep bole-hole installation and stored in an underground reservoir, and a capacity
for future extension as the market dictates.

G.

Raw Materials Description and specification, current and prospective

availability & costs
The following raw materials, mainly fresh fruits have been identified as needful in

abundance: Orange, Pineapple, Mango, pear apple, Guava, Pawpaw. Of all these, only apple and
Fish will be imported. A pilot farmland to demonstrate to local farmers the preferred breed of
fruit required is already in the offing to take off on a 32 acres of land already acquired. In the
local environment of the factory, farmers, especially school leavers would be encouraged by all
means to grow fruits and sell to the factory. Delivery trucks will be made available by the
company to visit fruit-growing farmlands, near and far for fresh fruit purchases.

The quantity of input of raw materials is as follows: Pineapple 3333.3kg/hr, Guava

2450kg/hr, mango 3333.3kg/hr, pawpaw 3333.3kg/hr, apple 2450kg/hr (to be imported). That is
3333.3kg/hr x 16 per day; 2450kg/hr x 16 per day (for 2 shifts.)

H
1.

Utilities

Electricity: 28 Poles costing N30,000.00 each, that is N840,000.00 will be requied to link
energy from a suitable sport to the factory site. Armored cables of 2000 meters costing
2, 800, 00 per meter = 5,600,000.00
Transformer 500KVA with power input 33KV at N2, 500, 000.00
Electricity variable cost is estimated @ N10, 000 per month X 12 = N120,000 per annum
Total Fixed Cost = #8,940.000.00

II

Water: The variable cost of water is put at N5, 000.00 per month or N 60, 000. 00 per annum.
The Fixed Asset costing.
5 boreholes (industrial) @ N2,500,000.00 each

N14,500.000.00

Plus pipes and tanks

Summery of utility N000
A-Electricity:
28 Poles

N
840, 000.00

2000 Meters of cables @ N 2,800 per meter

5,600,000.00

One 500KVA transformer

2,500,000.00
8,940,000.00

Variable cost @ N10, 000.00 per month

N120.000.00 per annum

5 Borehole (Industrial) @ N 2.5m each

14,500.000.00

Underground Reservoir (5 million lire capacity

4,000,000.00

B. Water:

Contingencies
Total
Total A + B

200,000.00
18,700,000:00
=27,640.000.00

OBSERVATION, CONCLUSION AND RECOMMENDATION.

Throughout this report, we have been able to appraise critically the data collected,
observation made and information obtained, we have been able to observe the following point:
(i)

There is evidence of good current and prospective market for fresh fruit juice in Nigeria
and the neighboring ECOWA countries. The market is insatiable.

(ii)

The project is taking off at an ambitious level of plant capacity of 80%.Of more
ambitious still is the kick-off with 2, 8hrs shift per day. This level of capacity utilization

requires a tireless, visionary, dynamic, creative and cooperative team of management to

execute successfully. The beauty of the project is that if it would be necessary to reduce
the utilized capacity and reducing the labour force, it will still yield a high level of
profitability.
(iii)

The imported technology employed for production process is high, modern and
attractive for filling and packing and stands out high when compared with the competing
existing ones. The project is posed to have a landable sizeable share of the market.

(iv)

With regular and efficient maintenance culture of management for plant, machinery and
equipment, going into 3shifting would be with a relative ease of accomplishment.
For the achievement of good results on this project, the following are recommended:

(i)

An efficient and effective inventory strategy and system should be developed as part of
purchasing and store keeping management efforts.

(ii)

As the Managing Director has resolved to locate the project in his local area of
influence, he should not be sentimental in who he employs. He should endeavor to fit the
right people to the right job.

(iii)

The Management should pursue a dynamic, progressive and forward-looking policies by

inculcating in workers the sense of belonging and loyalty to the company so as to
enhance group cohesion and productivity in the company.

(iv)

As the products for processing are drinkable items, the security system should be
strengthened, empowered and encouraged to stop pilfering and stealing. Through
searching of workers at the gate should be introduced.

(v)

The Management of this project should liaise with the Research and Development unit
of the solution Galore Ltd in taking their Managerial, Marketing, Production,
Accounting and Manpower Development Problems.