• Tuesday, April 23, 2024
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How to invest in tissue paper manufacturing business

Investment opportunities: Setting up tissue paper manufacturing business

Nigeria, Africa’s largest economy, with a GDP of $477.38 billion in 2023, with a population of over 225 million people is struggling with economic development, unemployment, and various setbacks that stem partly from its slow move towards a well-diverse economy.

The country’s economy is mostly driven by oil exports, rendering it sensitive to global oil price changes.

Since the public sector has failed in that regard, the responsibility falls in the hands of the local entrepreneurs to create the wealth that will grow the economy.

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One of the ways Nigerian entrepreneurs can achieve this goal is to invest in industries with large markets but low local production costs. An example of such industries is the tissue paper production business.

Market prospects

In 2004, tissue papers were placed on the list of banned items to encourage local production and supply. It worked to an extent, but then, the few tissue paper manufacturers in the country could not keep up with the local rising demands.

The Nigerian toilet paper market is predicted to reach $15.9 million by 2023. There is a huge gap between tissue paper demand and supply which is a great business opportunity.

In Nigeria, the consumption rate is over 1 billion units monthly; yet, production rates are less than 150 million. Before taking advantage of what this venture has to offer, knowing the right steps to take to start a tissue paper production business in Nigeria is key.

Raw materials

The raw materials for the production of toilet papers are various quantities of whitened wood pulps or recycled papers which are processed into soft, bulky, and absorbent disposable paper. The production process involves either manual or automated machines.

Equipment needed

Some of the equipment and materials for a tissue paper production business are;

Embossing machine, tissue paper folding machine, high-speed toilet paper machine, perforating machine, industrial roll rewinding and slitting machine, bandsaw cutter, pulp and waste paper recycling jumbo roll machines and core making machine.

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Production process

The production process begins with the processing and grating of the raw materials, which is mainly cassava (other raw materials like maize, sorghum, and potato are also available but more costly). This is followed by sieving and filtration to obtain starch.

The starch is pre-cooled in a reactor and treated with various chemicals, water, hydrolysing, neutralising, and decolouring agents depending on the class or purity level required. Water is thereafter evaporated from the mass to facilitate setting and drying as required.

Distribution/marketing options

The envisaged plant can set up its own sales/marketing team to engage in a sustained one-on-one sales drive. Advertising options could be based on the usage of flyers and referrals.

Manpower requirement

A total of eight staff is required in the short-term operations of the plant. They are a skilled worker-one, semi-skilled workers-two, salesmen-one, driver-cum-salesman-one, and security operative–one.

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The plant can begin on a small and medium scale with total setup costs starting from between N7 million, and N15 million excluding land.

Estimated start-up cost (small scale):- N10, 500,000 – N15,500, 000.00

Potential net profit:- N6,500,000 – N9,000,000.00 per annum

Estimated start-up cost (medium scale):- N35, 500,000 -N165,500, 000.00

Potential net profit:- N24,000,000 -N53,000,000.00 per annum

This profile, or any similar one, can be developed into a bankable proposal for any interested investor.

For further clarification, do contact our offices in the address stated below. [email protected]