• Tuesday, February 27, 2024
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BusinessDay

Investing in integrated rice processing project

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Justification

With the planned ban on rice importation into Nigeria, supply of rice definitely will be lower than demand.  To meet our requirements, we must produce a minimum of 4 million metric tonnes.  The present level of local supply is less than 500,000 metric tonnes.  The short fall in supply is about 3.5 million metric tones.  This short fall must be produced if we are to feed adequately.

Rice can be grown conveniently in Nigeria , thee climate is good.  It can be grown both in the forest and Savannah areas of Nigeria .  The project is, therefore, technically feasible.

The project is highly profitable.  Price of rice in the market is very good for the producers, hence the project’s economic viability.  The potentials in investment in Rice production in Nigeria cannot bee over-estimated.  This is why both indigenous and foreign investors are seriously going into it. It has also been found out that out local rice (ofada for example) is more nutritious than the imported ones.

Productioin Technology

The whole idea about this project is to make it an integrated one.  The raw materials (rice paddy) will be grown and processed by the prospective investors. The target is to produce 4,000 metric tonnes of finished (polished) rice per annum.  Requirements are land (about 1,000 hectares), plant and machinery, Buildings, farm inputs (seeds, fertilizer, herbicides and insecticides) and packaging materials.  Rice cultivation process includes land preparation, planting/distribution, herbicides and fertilizer application, harvesting and freshing.  The harvested rice will later be processed in the factory.  Rice processing includes parboiling, drying, de-stoning, dehauling, winnioing, polishing, and packaging.

Financing implicaion

The project has been estimated to cost N100 million broken known ass follows:

Profitability

Estimated revenue realizable by the project is about N400 million annually.  Annual production costs have been put at N270 million.  Annual profit of N130 million is guaranteed.  This project is therefore recommended for funding serious minded investors can be assisted in terms in packaging to attract bank financing, project establishment and management.

Author’s contact:  08023058045, [email protected]

OLUMAKINDE ONI