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Process Systems

Cassava Industrialization Project:

(Preliminary Proposal)
3 Million Litres per Year Ethanol Plant
(And)
18,000 Tons per Year Cassava Flour
In Ogun State, Nigeria.

TYPICAL ETHANOL PLANT and FLOUR PROCESSING PLANT.

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EXECUTIVE SUMMARY

1.1

OVERVIEW AND PROJECT OBJECTIVE.

This proposal is being submitted in Ogun state as a

Private Sector Initiative for the establishment of an Integrated Cassava

Processing Plant primarily for the production of 3,000,000 Litres of
Ethanol Per Year (3 Million Litres Per Year) and 18,000 Tons per Year of
high quality cassava flour.

1.2

PROMOTERS.
It is being packaged by Sino - US Energy & Technology Inc., a Chinese

Foreign Investment Firm under the Chinese Government Foreign Investment

Authority in conjunction with the Consortium of Process Systems and American
Procurement & Export Company LLC for the primary purpose of taking
advantage of the Federal Government of Nigeria economic reforms among which
are increase in the Agricultural productive base, reduction of poverty through
employment generation and the diversification of Nigerias export earnings.

1.3

PROJECT

COST,

REQUIREMENTS

and

EMPLOYMENT

GENERATION.
The Project, with an estimated cost of US$ 16,389,260 will require
about 5,000 hectares of arable Farm land for the continuous supply of 75, 000
Tons of fresh Cassava tubers from direct production, out growers and/or
suppliers all year round. This will generate over 1,000 direct and 4,000
indirect jobs in the rural areas, reduce poverty and create wealth.
The processing plant will employ about 120 people with an average

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Annual income of Naira 350,000 per person; serve as a source of technology

transfer, improve the quality of life for the workers and add to the
industrial base of the State.

1.4 ESTIMATED TAXES.

The various tiers of Government will benefit from an anticipated annual
company tax payment of over USD 900,000 apart from individual personal
income tax.

1.5 MARKET ORIENTATION.

The planned plants products are primarily targeted at the increasing demand
of cassava products:
Ethanol will partly satisfy the increasing National and Worldwide demand for
bio fuels, increase and diversify Nigerias export earnings, and conserve Nigerias
Crude Oil reserves.
Export of the product (Ethanol) will also increase the export earnings of
the country and create other linkage effect in haulage and shipping sectors of
the economy.
Cassava flour, on the other hand, is geared towards satisfying part of the local
demand of the product by the Flour Milling Companies in Nigeria in compliance
with the Federal Government of Nigeria directive for 10% cassava flour inclusion in

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their wheat flour. Milling Companies requirements of Cassava flour is estimated at

300,000 tons annually.

2,

PROJECT COST.
The proposed plant, with a total investment cost of about US$ 16,389,260 is made

up of various components as follows:

Table 1.1: Estimated Project Cost.

S/N Project Component Description

1

Estimated
Cost US$

Land Acquisition, Development etc

1,875,000

Civil Works and Buildings

Plant, Machinery and Equipment

Auxiliary and Ancillary Facilities

2,230,200
4,494,600
1,250,000
5

Engineering Fees

Owner Expenses

1,149,460
1,740,000
9

Farm Land and Farm Operations

10

Working capital

2,675,000
1,000,000
11
12
Total

16,389,260

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3, FINANCING.
The above requirement will be funded by a combination of investors from Nigeria
and abroad. The structure is made up as follows:
Foreign
US$
Equity

7,090,160

Local
US$
4,425,000

Foreign Technical Partners

4,559.960
African Development Bank
2,530.200
Private /Local Banks and Investor

4,425.000

Long Term Loans

2,824,100

BoI
NACB

Total
US$
11,515,160

2,824,100

1,249.100
1,575.000

Medium Term Loans

Short Term Loans
Bank 1
Bank 2
Total

4,

2,050.00
1,000.000
1,050,000
7,090,160

9,299,100

2,050,000

16,389,280

PRIVATE COMPANY FACILITATION

The COMPANY as equity participation (as part of the local equity

contribution) is expected to be in the form of services relating to its role as the
FACILITATOR OF THE PROJECT in the provision of the following:
Land acquisition, clearing, development and preparation. Other land matters,
Occupancy rights and rights of way.
Securing the loans for procurement of the Plant and Machinery and overdraft
from the participating financial partners.

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The secured foreign loans will be offered to the public as shares after two years
of production
Provision of Cassava seedlings and fertilizer for the cassava farm project take
Off
Facilitating the issuance and granting of regulatory permits and approvals for
the establishment of the plant. .
Facilitating the issuance of expatriate quotas for the officials and personnel
of the Foreign Technical Partners.
Facilitating the approval for the remittance of due portion of all foreign loans
and interests, salaries and wages of the Foreign Technical Partners Officers
and Personnel, as well as earned profits of the Foreign Equity holders.
5. REVENUE, EXPENDITURE, PROFIT and TAXES.
5.1 REVENUE: An estimated annual revenue of US $ 14,460,000 is expected
from the export sale of Ethanol and local sale of Cassava Flour.
5.2 EXPENDITURE: A total expenditure of US$ 9,060,000 is projected which
covers all raw material costs, overheads, marketing and interest payments
5.3 GROSS PROFIT: A gross profit of US$ 5,400,000 is estimated
5.4 ESTIMATED TAX: An estimated tax of US$ 800,000 is projected to all tiers
of Government.

RETURN ON INVESTMENT.
The establishment of the project is economically viable with a Return On

Investment (ROI) of about 30% and a pay back period of four years.

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7, CUSTODIAN

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OF THE PROJECT.

The custodian of the project is proposed for the materialization and operation
of the project as follows:

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American Procurement & Export Company LLC
Sino Energy & Technology , USA
Promoters

Federal/ Ogun State Government of Nigeria

supporter

African Development Bank (AfDB)

Private Local Investors
Equity Partners

Nigerian Agricultural Credit Bank (NACB)

Flour Millers Association of Nigeria (FMAN)
Bank of Industry (BoI)
Commercial Banks.
Finance Partners ( Loans)

Custodian Of the
Integrated
Cassava Project
(the company)

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8, SITE AND LOCATION

The proposed sites will be easily accessible by a network of good roads and other
infrastructural facilities. No difficulties will be encountered either during the
construction period for the delivery of Machinery/Equipment/Materials and during
the normal operation of the plant.

9,

PROJECT SCHEDULE.
The implementation of the project is expected to be completed within 2 years after

all necessary Governmental and Regulatory approvals have been obtained and
Memorandum of Understanding (MOU) signed.

10,

POLICY THRUST SUPPORTING THIS INDUSTRIAL PROPOSAL

National and Worldwide Government support and Policies for increased Ethanol

production to reduce Green house emissions through the blending of Ethanol with
Petrol is a major economic and industrial thrust for investment in this area.
Locally, the policy thrusts supporting this initiative are centred on the following:
a) Increasing the life span of Nigerias Oil reserves through blending of Ethanol with
Petrol.
b) Improvement of the rural economy through increased agricultural production and
in this case, Cassava tubers, as raw materials for the plant.
c) Achieving a strong diversified economy able to generate employment.
d) Sustain incomes for the citizens.

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e) Diversifying export earnings. Presently Oil accounts for over 90 % of total export
earnings while agriculture accounts for less than one percent (1) .
f) Provide gainful employment for the teeming population thereby reducing poverty.
Currently unemployment rate stands at 10%.

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PRIMARY EQUIPMENT

Distil and dehydrate Equipment in China

Ferment Equipment

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Process Systems

WASTE WATER TREATMENT

Waste water treatment technology
Original sewage
Biogas
Bar
PH
Suction

PH adjusting

Sedimentation

Conditioning

Water
sealer
UASB
Reactor

Sedimentation
tank

SBR
Reactor
discharge

Suction

Sludge
tank

Recycl
e

sewage

Sludge

Biogas

First Phase Processor For Water Treatment

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Second Phase Processor For Water Treatment

Biogas Course Jar

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SEWAGE FIREDAMP USE

()

Biogas Soppy Jar

Biogas Arid

Jar

Biogas Processor Room

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THE POWER PLANT FROM BIOGAS

THE PLAN OF POWER HOUSE

1. ( Gas turbine )

2. ( Generator )
3. ( Clutch )
4. ( Steam turbine )
5. ( Condenser )
6. ( HRSG )
7. ( Air intake block )
8. ( Rotor air coolers)
9. ( Stack )
10. ( Auxiliary Block GT
)
11. ( Control valve block )
12. ( Generator Bus bar )
13. ( Generator Beaker
module )
14. ( CW-Pipe )
15. ( NOx water injection
)

block

16. ( Fuel oil block )

17. ( Fuel gas block )
18. ( Main transformer )
19. ( Auxiliary transformer )
20. ( Lube oil ST )
21. ( Condenser pump )
22. ( Feed water tank )
23. ( Electrical & control
module )

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THE PLAN OF POWER HOUSE

6GTLB Dynamo

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Process Systems

JM316GS-B Dynamo

Boiler

Boiler

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THE WATER FLOW OF POWER HOUSE

CHINESE TRANSLATION IN ENGLISH

1.
2.
3.
4.

Dynamos Combination ---- .

5. Water Out ---- .
Hot Water Cistern ---- .
6. Water Return ---- .
Condensation Boiler ---- .
7. Condensate ---- .
Low Temperature ---- .

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PROJECT SUMMARY
1.0 PROJECT TITLE: CASSAVA INDUSTRIALIZATION PROJECT
2.0 PROMOTERS/TECHNICAL PARTNERS: SINO US ENERGY & TECHNOLOGY INC.
3.0 FACILITATOR(S) :THE PROPOSED COMPANY
4.0 LOCATION

: OGUN STATE , NIGERIA.

5.0 PLANT PRODUCTS/CAPACITY:

5.1 ETHANOL
: 3 MILLION LITRES PER YEAR
5.2 FLOUR
: 18,000 TONS PER YEAR.
6.0 RAW MATERIALS : 75,000 TONS OF FRESH CASSAVA TUBERS.
7.0 MARKET ORIENTATION:
7.1 ETHANOL
: EXPORT ORIENTED (CHINA and US)
7.2 FLOUR
: LOCAL MARKET ORIENTED (FLOUR MIILING COMPANIES)
8.0 TOTAL INVESTMENT COST: US$ 16,389,280.
9.0 FINANCING:
9.1 EQUITY:
US$ 11,515,160
9.1.1 PROMOTERS/TECHNICAL PARTNERS:
US$4,559,960
{ Plant, Equipment & Machinery; Factory inputs, Eng and Owner Exps. etc}
9.1.2 AFRICAN DEVELOPMENT BANK {ADB}: US$ 2,530,200
{ Civil Works, Buildings & Engineering Fees}
9.1.3 THE PROPOSED COMPANY-:
US$4,425,000
{Land Matters, Facilitation, Owner Expenses, Seedlings and Fertilizer}
US$ 4,874,100

9.2 LOANS:
10.0 SALES (REVENUE)

US$ 14,460,000

11.0 EXPENDITURE

US$ 9,060,000

12.0 PROFITS BEFORE TAX :

13.0 ESTIMATED TAXES

14.0 PROFITS AFTER TAX

US$ 5,400,000
US$

800,000

US$ 4,600,000

15.0 EMPLOYMENT GENERATION:

FARM OPERATIONS :
DIRECT: 1,400
INDIRECT: 4,000
PROCESSING PLANT :
150 {Average Annual Salary per Person: Naira 350,000}
15.0 RETURN ON INVESTMENT: Average 30%
16.0 PAYBACK PERIOD

4 YEARS.