Business Plan on Cassava Processing (updated)

Cassava is one of the most important crops farmed in Nigeria. It has a well-developed system of farming and production, hence, producing up to 59 million tons. As a result, Nigeria is the largest producer of cassava in the world.

Cassava processing is a means of converting cassava tubers into starch, garri, or fufu. Cassava processing can be done locally or by using a mechanized system.

In Nigeria, cassava processing methods involve the use of fermentation, cooking, or drying. The method used depends on the product you want to produce.

• What is IFERROR Function in Excel: Mastering Error Handling in Excel
• How to Design An Automated Client Reporting Software with Nested INDEX and MATCH Functions in Excel

Garri, fufu, and starch production can be done using local equipment which involves pealing, grinding, drying, and frying. During local cassava processing, the wastewater is allowed to rest in order to extract local starch.

Note that due to the high food inflation rate in Nigeria today, prices used are far lower than present prices. Change the prices to the current market price.

Though most people who produce cassava process them using the local methods, to sustain the business mechanization is advised. A mechanized cassava processing plant will generate better revenue for the owner as well as create employment.

This business plan is created in order to assist you in establishing a profitable cassava processing plant. Kindly use it as a guide and make necessary adjustments.

Executive Summary

Company_Name is an establishment whose area of business involves the cassava processing, packaging, and marketing of highly nutritious gari and cassava flour. This business plan on cassava processing will cover the processing, packaging, and marketing of cassava products.

It’s a known fact that Cassava is God’s gift to the tropics because it can grow in poor soil with inadequate rainfall. The starchy roots of cassava are a major source of food for more than 700 million people all over the world. It ranks third in order of staple food crops in developing countries after rice and maize. It has universal applications. Company_Name intends to contribute its quota in closing the large demand-supply gap in the production and distribution of cassava products.

The expression project which is estimated to cost the sum of ten million naira (N10,000,000.00) is expected to return a profit of (N3,500,000) in the first year, and break even of all its invested capital within the first three years of operation. The innovative features of the business lie mainly in the production process. Instead of the usual manual production process, everything thing will be mechanized. Company_Name will mechanize the production process from peeling of the cassava to the frying of the garri or drying of the chips for flour. By this, our cassava processing plant will be hygienic. Our product is consumed at all seasons by all manner of people due to its nutritional value.

With the maintenance of adequate sanitation and environmental hygiene, we believe that our products and factory would be approved by NAFDAC and SON within the first 12 months of operation. On the other hand, the new invention in cassava processing includes preservation, packaging and the use of cassava peels as animal food or as organic manure has paved way for more profitability. We have strong connection of success in this business because of experience of successful friends already in the business, who will be our key partners and we are so willing to invest more time in research and development to explore other advance techniques to make the business even more profitable.

Overview of Cassava Processing Business

1.1      Description of Business

This business plan on cassava processing involves processing cassava into garri and flour using modern technology. These technological tools make cassava processing plants to be hygienic and profitable.

Problem Statement & Solution

This business plan on cassava processing is designed to meet the need for food for the populace and flour to bakery industries.

A mechanized production system will enable mass production of garri for the feeding of the teeming population.

The Cassava flour will help close the gap in supply of cassava flour to bakery companies as recommended by government

The contribution of NRCRI would improve yields with improved breeds and reduce production costs.

Vision and Mission Statement

Vision: To produce the best quality garri and flour in the Nigerian marketplace in the next five years.

Mission: Innovative production of high-quality cassava products at affordable prices.

Business Objectives

1. Production and packaging of high-quality cassava products.
2. Creation of employment for the youths within the business environment.
3. Market leadership position in innovation, quality, and pricing of cassava products.
4. Breeding customer satisfaction at all levels of our product(s) demand.

Current Status of Business

 The business is a startup.

Marketing Plan

Market

1. The following are our expected customers and how we will attract them.
2. Bakeries and confectioneries – online marketing, direct sales, product launch, and advertisement
3. Umuahia industrial market traders – direct sales, product launch, and advertisement
4. Hotels and fast food joints – online marketing, direct sales, product launch, and advertisement
5. Wedding, traditional marriage, etc ceremonies

Market Size, Structure & Growth

Research has shown that the rate at which the flour market is growing in the past two years has been doubling on monthly basis. Within our locality, from January to September this year we observed that monthly demand for garri has increased rapidly. Therefore, creating a gap between demand and supply for garri and flour. This high demand-supply gap is what we want to bridge. Therefore venturing into cassava processing will help bridge this gap.

Value Proposition

We shall offer our customers, high-quality cassava products with vitamin A to enhance the good health of young and elderly people in society.

Competitive Advantage

1. Closeness to NRCRI, Umudike guarantees the use of improved breeds in the production
2. Closeness to supply/availability of raw material guarantees lower product costs
3. Closeness to rural area and market reduces the final cost of products

Business Model on Cassava Processing

Cassava processing is an interesting adventure that involves buying the tubers, peeling, grating, drying, and frying as the case may be. We need to model our business plan on cassava processing using BMC.

In Company_Name we will specialize in the production of garri and flour. Research shows that it is advantageous to build brand loyalty by producing products with our brand name.

Business Model Canvas (BMC)

We shall use the BMC business model illustrated in the table below.

SWOT Analysis

Strength

These are internal factors that can affect the business.

Patents: With our proposed quality and method of production, we are sure of maintaining our proposed quality in the long run. With this quality in view, over time, we shall ensure that our products are certified by the Standard Organization of Nigeria (SON) as a mark of quality.

Strong brand: One of our major marketing strategies is to brand our products. With this, we believe we shall maintain a substantial market share which would overtake the market as we build our brand as a household name.

Customers Service:  We shall ensure that we listen frequently to our customers complains, since customers are king. With good trained staff and quality product, including after sales service, as the need may be, we are sure of keeping and growing our customer’s database.

Cost Advantage: With economies of large scale production, we shall ensure that our prices are highly competitive in the market. Also, we shall use bargaining power and good relationship with our vendors to drive down costs of production.

Opportunities

These are business external environmental factors that may affect the growth of our business.

Unsatisfied customers: With the quality of our products and size, we shall be open to takeover customers from other businesses who feel unsatisfied. It is certain that day after day, customers are being dissatisfied from their clients, with our good customer service and good relationship established, we shall take over from other businesses.

Government Policies: Nigerian government wants the number of local producers to increase before placing a ban on importation of food products.

Weaknesses

Our major weakness is size, if we shall get the required capital, we shall come out even stronger and better.

Threats

Some of the threats normally encountered are as follows

1. Poor power supply (This may affect pricing of products). To overcome, we shall use power generating set to power most of our machines. Though majority uses petrol (gas or fuel).

Operations

Operating Plan:

The business operation has already been listed in the business model under key activities. The following are involved in the operation of Company_Name:

• Director
• Production manager
• Quality control officer (QCO)
• Operational Attendants
• Marketer/sales rep
• Clerk/account clerk

Organizational Chart

• DIRECTOR:  Will be responsible for procurement of feed and overseeing of the business. The production manager and QCO will take instructions from him/her as well as report to him/her.
• PRODUCTION MANAGER: – He/she is the one in charge of the production management of the production process as well as maintain product quality. s/he is responsible for day to day management of the processing plants, gives instruction to other staff as well as reports to the director.
• QUALITY CONTROL OFFICER: – The quality control officer is the one in charge of ensuring that products meet with standards. s/he will always test the quality of tubers before and after production.
• CLEANERS/ATTENDANTS: – They are the once in charge of daily cleaning and running of the production processes.
• MARKETER/SALES REP: – The marketer is the one in charge of selling of the products
• CLERK/ACCOUNT CLERK: – S/he is the one in charge of day to day financial record of the business.

Production Equipment and Budget

Marketing and Growth Plan

Marketing Growth

The rate at which demand for cassava products is growing has been quite interesting in that the demand is almost doubling every year. People are finding alternative nutritive food to minimize the cost of living.

Pricing Strategy

We shall attempt to be price leaders by maintaining a pricing policy that will give a 3% discount to all our customers from the market price. We shall also give a 5% discount for bulk purchases, which shall be determined by management from time to time.

Target Market

Our target market includes 40% sales to businesses and institutions such as hotels, restaurants, and households and 60% sales to households and market agents.

Promotion Strategy

We shall use WhatsApp, Instagram, Facebook, and bulk SMS to create awareness of our product as well as maintain customer interaction. We shall also use billboards, fliers, and low-cost radio adverts to create awareness during the festive periods.

Marketing Channels

Our marketing channels are as follows

1. Through agents
2. Through retail outlets
3. Through direct sale.